Iowa's Eminent Domain Laws and Property Rights

The following responses are intended to provide general information about eminent domain laws in the featured state. Such information does not constitute legal advice. Anyone interested in learning more about eminent domain law and the impact it may have on a given set of facts should consult with an OCA attorney or another attorney experienced in handling eminent domain cases.

• Who Can Exercise Eminent Domain Powers?

  The State of Iowa; certain authorized state agencies; cities; counties; owners of land without access to their lands; cemetery associations; school districts; public and private utilities; soil and water conservations districts; and, railway corporations, all have the right to take private property for a public purpose, public use, or public improvement. These entities are referred to as the “acquiring agency”. See 6A.1; 6A.4; 6A.6; 6A.22 Code of Iowa.

• What Are the Legal Requirements or Pre-Requisites for Exercising the Power?

  All acquiring agencies must make an application (to initiate condemnation proceedings) to the chief judge of the judicial district where the land to be condemned is located. The application must assert the taking is for a public purpose, public use, or public improvement; that only the minimum amount of land necessary to achieve the public purpose is being acquired; and, a summary of the efforts made by the acquiring agency to negotiate in good faith with the owner prior to submitting its application to proceed with condemnation.
  
  In the event the chief judge is satisfied with the application submitted by the acquiring agency, the judge approves the application and a minimum of thirty (30) days notice is given to an owner, contract purchaser, tenant, lienholder or encumbrancer that a six (6) member county compensation commission will be convened. The six (6) member panel takes testimony from the acquiring agency’s valuation expert as well as from the owner representative’s valuation expert on the appropriate amount of compensation to be awarded for the taking of the parcel of land in question. See 6B.3 Code of Iowa.

• What Limitations of Defenses Exist?

  Within thirty (30) days of receiving notice of an impending condemnation hearing, an owner of property, a contract purchaser of record, or a tenant of record may file a petition challenging the acquiring agency’s exercise of its eminent domain authority as well as the procedural steps the agency has followed in initiating the condemnation proceeding.
  
  If an owner challenges the acquiring agency’s authority to initiate an eminent domain proceeding, the burden of proof is on the acquiring agency to prove by a preponderance of the evidence that the public use, public purpose or public improvement being asserted meets the definition of those terms as stated in the code. See 6A.22(2) Code of Iowa.
  
  In the event an owner is successful in its challenge, the acquiring agency is required to pay the owner’s costs, including reasonable attorney fees.
  
  There are other common law remedies available to a property owner such as an injunction; petition for writ of certiorari; mandamus. These remedies may be utilized based upon the specific fact pattern of any particular condemnation proceeding. See 6A.24(1) Code of Iowa.

• What Constitutes a Public Purpose?

  In Iowa, the terms public use, public purpose or public improvement are used interchangeably. Typical uses that constitute a public purpose are roads, parks, schools, public buildings, waterline easements, sanitary sewer easements, public or private utilities, and the elimination of slum or blighted communities. These are uses that serve a public good or a public need.
  
  For many years, Iowa law allowed acquiring agencies to initiate eminent domain proceedings for the sole purpose of stimulating economic development because economic development was considered to be a public use, a public purpose or a public improvement. However, in 2006 the Iowa General Assembly legislatively determined that economic development activities are not public uses, do not serve a public purpose, and may not support a public improvement. This ended the practice of using eminent domain to take an owner’s land in order to give that land to another simply because the alternative user generates more tax revenue or creates more jobs than the previous user. See 6A.22 Code of Iowa.
  

• How is Just Compensation Determined?

  The term “just compensation” (as found in both the U.S. Constitution and in the Iowa Constitution) has no technical or purely legal definition. The Iowa Supreme Court has asserted this term is intended to insure, in the final analysis on the issue of damages, that a property owner be made “whole”. The Iowa Supreme Court also considers the word “damages” to be synonymous with the term “just compensation”.
  
  Damages in a condemnation proceeding in Iowa are determined based upon an analysis of the parcel’s “market value.” Only in those situations where there is no market value for the type of property that has been taken will the “intrinsic” or “actual value” of the property be considered.
  
  If the entire property is taken through eminent domain, then the property’s market value determines the damages an owner has sustained. If only a portion of the property is taken through eminent domain, then the difference between the market value of the property before the taking and the market value after the taking determines the damages an owner has sustained. See Aladdin, Inc. v. Black Hawk County, 562 N.W.2d 608 (Iowa 1997)

• How is Fair Market Value Defined?

  In Iowa, the term most often used is the “fair and reasonable market value”. This means the cash sales price between a voluntary, willing seller who is not forced to sell, and a voluntary, willing buyer who is not forced to buy. It assumes a buyer and seller are bargaining freely in the open market for the purpose and sale of real estate.
  
  The term does not mean a value under circumstances where greater than its fair price could be obtained, nor does it mean the price which the property owner would bring at a forced sale. Also, it does not mean what the property is worth to the Plaintiff nor what the acquiring agency can afford to pay. See
  Iowa Civil Jury Instruction 2500.4

• What About Recovering Damages to Remaining Property?

  When only a portion of an owner’s land is taken, Iowa law allows owners to be compensated not only for the land that has been taken from them, but also for any reduction in value that has occurred to the land that an owner retains after the taking.
  
  In Iowa you cannot be compensated for business loss because the assumption under Iowa law is that the business could relocate to another property. However, if there is a lease in place at the time of taking, both the landlord and the tenant have the right to independently assert damages to their respective interests. An award of damages to one has no impact on the damages to be awarded to the other. In fact, the damages awarded to the landlord and the tenant may exceed the “fee value” of the property because it is the economic advantage each party holds at the time of taking that is analyzed to determine damage. See Chao v. City of Waterloo, 346 N.W.2d 822 (Iowa 1984).

• Is the Landowner Entitled to Recover Reasonable Attorney Fees? Expert Fees? Litigation Costs?

  Yes. Under the following three situations:
  
  1. Compensation Commission. In Iowa all eminent domain matters are first presented to a six (6) member panel known as a county compensation commission (hereafter “commission”). If the commission awards damages to a property owner (hereafter “owner”) that exceeds 110% of the final offer made by the acquiring agency, then the commission has the authority to award reasonable attorney fees and costs and this includes the cost of one (1) appraisal.
  
  2. Appeal and Jury Trial. Either the owner and/or the acquiring agency may appeal the award of the commission to the district court and request a jury trial. In the event a jury awards damages to an owner in excess of the amount actually awarded by the commission, then the presiding district court judge has the authority to award reasonable attorney fees, costs and the cost of one (1) appraisal incurred by the owner at trial.
  
  3. Appeal to Iowa Supreme Court. Either the property owner and/or the acquiring agency may appeal the jury award to the Iowa Supreme Court. The Iowa Supreme Court may either retain the appeal or direct the appeal to its Court of Appeals. If the property owner prevails on appeal (either before the Iowa Supreme Court or the Iowa Court of Appeals), then the case is remanded to the district court for the purpose of awarding reasonable appellate attorney fees to the owner.
  
  See Sec. 6B.33 Code of Iowa; Article I, Sec. 18 Constitution of the State of Iowa.

• Can the Government Take Possession of the Landowner's Property Before Final Compensation is Paid?

  Yes. In Iowa, an acquiring agency may deposit with the county sheriff the amount of damages assessed at a scheduled compensation commission hearing. In those instances where an acquiring agency has deposited the damage award with the sheriff, the acquiring agency may take possession of the property, but to the greatest extent practicable, no person shall be required to move from a dwelling or to move from a person’s business or farm operation without at least ninety (90) days written notice of the date by which the move is required. 6B.25 and 6B.54(4) Code of Iowa.
  
  If the taking is a person’s “homestead”, then a property owner is not required to vacate the property until a final determination of damages has been made. There is one exception to this rule. If the acquiring agency is the Iowa Department of Transportation, then a property owner must vacate the property within 180 days of the condemnation hearing.