Inverse Condemnation-A Short Primer

This Article is written by Owners’ Counsel of America for general informational purposes only. It is intended to assist landowners in understanding some of the basic elements of an inverse condemnation claim. It is not intended to provide legal advice. For a more in depth understanding of inverse condemnation, consultation with an exerienced eminent domain lawyer is advised.

What Is An Inverse Condemnation Taking?

              An airplane flies so low over your home, the walls shake and the windows rattle.

              A city decides to build a sewage treatment plant right next to your residential property.

              An urban renewal authority places a long term blight designation on your property which depreciates its’ value significantly, causes tenants to leave, municipal services to be denied or curtailed, and otherwise results in the overall deterioration of the surrounding neighborhood. 

In none of these situations has the governmental entity sought to take property from you. Nonetheless, there is an undeniable negative impact on your property that causes substantial injury and damage. These are but a few examples of actions that may lead to an inverse condemnation claim on behalf of the affected property owner. In its’ simplest form, an inverse condemnation is an intrusion on an owner’s property or property rights due to the actions of a governmental entity that results in a taking without payment of just compensation.

How Does An Inverse Condemnation Differ From An Eminent Domain Taking?

Both an eminent domain taking and an inverse condemnation originate from the Fifth Amendment to the U.S. Constitution that mandates the payment of just compensation when property is taken for a public use. Some state constitutions may also have provisions that require payment of just compensation not only for the taking of property, but damages to property as well.

A traditional eminent domain case differs from an inverse condemnation action in who initiates the cause of action or lawsuit. In a traditional eminent domain case the governmental body brings the lawsuit because it intends to take the landowner’s property and admits that it must fulfill its obligation to pay just compensation in order to do so. In such situations, the landowner does not have to prove that a taking has occurred because the governmental body has already acknowledged the taking.

In contrast, in an inverse condemnation action the government does not admit that it has taken a landowner’s property. Thus, it is incumbent upon the landowner to bring a court case in order to prove that a taking has occurred without just compensation being paid. Should a court agree with the landowner that the owner’s property has been taken, the owner will then be entitled as a matter of law to receive just compensation. 

How Winnable is an Inverse Condemnation Claim? 

Because a landowner generally has the Burden of Proof that a taking has occurred in an inverse case, a showing which often rests on an intense factual inquiry that must meet certain legal standards, inverse condemnation cases can be difficult to win. Most governmental entities, when faced with an inverse condemnation claim, will seek to mount a strong defense to avoid having to pay compensation to a property owner. This is particularly true if there are other landowners who are suffering a similar taking because the govermental entity will fear that if one taking can be proven, many more taking claims will follow.

This is not to say that an inverse condemnation claim cannot be won, however, and, in fact, there are many examples of cases where landowners have prevailed. But it does mean that the landowner will have to make a strong and compelling case, supported by independent facts and possibly even expert testimony, that a taking has occurred and that the governmental defendant is responsible for the taking. 

Who Decides Whether an Inverse Taking Has Occurred? 

Inverse condemnation trials are typically split into two stages, which can make them more costly to litigate than a typical eminent domain action.  During the first stage, a judge must decide whether a taking has actually occurred by a governmental body. This determination is generally made based on a hearing, where both sides (the landowner and the governmental body) get to present evidence in support of their respective positions. 

If the judge finds that a taking has occurred, the matter will then proceed to the second stage, involving an additional hearing or trial on the amount of just compensation that the government must pay. Depending upon the jurisdiction where the case is being tried, the compensation determination can be made by the judge, a jury, or some other body. 

Must There Be a Physical Intrusion on the Property to Establish an Inverse Taking? 

Not necessarily. Many states recognize that an inverse condemnation action may be asserted in cases where there has been no physical intrusion on the property, but the value of the property has nonetheless suffered significantly due to the actions of a governmental body.

Here’s one example: A governmental entity, typically an urban renewal authority seeking to redevelop a blighted area, may create conditions or engage in activities over an extended period of time that ultimately result in multiple negative impacts on private property within that area.  Such impacts might include: significant value loss, tenant vacancies, the inability to obtain financing for development purposes, a curbing or denial of basic municipal services, deterioration of the neighborhood wherein the property is located, etc. In these situations, if there are prolonged delays in the authority’s decision to condemn the property, an inverse condemnation claim may be a viable legal option.  

Here’s another example: A governmental body adopts certain land use regulations that end up precluding almost all economic use of the property. Although the property has not been physically taken by the governmental body, the result, in terms of its use and enjoyment is the same as if a taking had occurred. Once again, the legal remedy for such impacts may rest with an inverse condemnation claim. This type of impact, from overreaching regulations, is also sometimes called a Regulatory Taking. 

Are There Benefits to Bringing an Inverse Condemnation Claim Over Some Other Cause of Action? 

Possibly. In some jurisdictions, a landowner may be entitled to recover reasonable attorney fees and costs if he or she prevails on an inverse condemnation claim against a governmental body. However, every jurisdiction is different and consultation with an eminent domain lawyer on this issue is strongly advised. 

Are there Limitations on Inverse Condemnation Actions? 

While inverse condemnation is a powerful tool to obtain relief and compensation for an unlawful taking, as stated earlier, such cases can be costly and difficult to win. Additionally, there may be certain legal limitations on a property owner’s ability to bring an inverse claim. For instance, some jurisdictions require that an inverse condemnation claim be filed within a specific time period, also known as a Statute of Limitations. This is just one of several issues that an owner will want to discuss with an OCA lawyer or other attorney experienced in takings litigation.