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Understanding eminent domain

Many Philadelphia residents are aware of common types of real estate litigation that relate to the buying and selling of property and the contracts and covenants involved. Eminent domain actions are a very different type of real estate litigation however, and one that home and property owners should understand if they want to protect their property interests.

Basically, eminent domain is a legal technique that allows the government to take a person's private property for its own use, even when the owner of that property does not consent. The government attempts to justify these takings by arguing that they are necessary for public uses, such as the construction of public facilities, highways and railroads.

Over time however, the exercise of eminent domain has been approved not only for projects of "public use" but also for the broader standard of "public benefit." This has mostly occurred in the context of economic development, where the government attempts to justify its taking of a property by arguing that the contemplated project will benefit the public in terms of increasing city revenues, creating new jobs and/or revitalizing certain areas.

Although home and property owners are protected by the U.S. Constitution from having their property taken without "just compensation," the acquisition price is generally not determined by a negotiation between the government (or the prospective developer) and the owner. Instead, the government agency is able to set its own prices, a situation which often results in inadequate compensation. For this reason, many property owners object to the exercise of eminent domain because it often results in a loss of property in exchange for a price that is below fair market value.

Source: Columbia University, "What Is Eminent Domain?" accessed Sept. 21, 2014

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