Mike Faherty completed litigation of a Lehigh County condemnation for a road widening. The Condemnor asserted the commercial property was vacant and offered $63,600. Faherty presented evidence that the former gas station was used as a motor vehicle repair garage and vehicular access was eliminated during construction. The Board awarded $110,000 in property damages plus delay damages and professional fees.
A Third Circuit ruling denied the Tinicum Township challenge to The Philadelphia Airport Expansion. The property acquisitions might now go forward.
A federal appeals court has denied Tinicum Township’s petition for a review of the $6.4 billion planned expansion of Philadelphia International Airport. Tinicum, which adjoins the airport and would lose 72 homes to the expansion, wanted the project halted because of what it said was an inadequate environmental analysis by the Federal Aviation Administration. But three judges of the U.S. Third Circuit Court of Appeals, who heard arguments in the case, rejected that claim. In the opinion written by Judge Anthony Scirica, the court said: “As the lead agency, the FAA has some latitude to determine the level of analytical detail necessary to support an informed decision and to adequately disclose air quality impacts to the public. “The technical errors alleged by Tinicum do not render the FAA’s air quality analysis arbitrary or capricious.” The court released the decision on Friday and it was first reported today by The Legal Intelligencer newspaper. No word yet on whether Tinicum will appeal the decision to the U.S. Supreme Court.
The distance between the city of Philadelphia and US Airways has narrowed, per a Philadelphia Inquirer editorial. The city is reported to have withdrawn its threat of increased rates via ordinance. Lease negotiations could alter the expansion and remove US Airways opposition. Check out the editorial on this issue: http://bit.ly/Ks6KQi
Property owners who’s property is threatened by eminent domain may expect fairness and good faith negotiations. However, condemnors may work hard to deny the constitutionally protected property rights. Owners are well served to learn of the laws which protect owners.
OVERVIEW
This guide is for property owners and business owners whose property and/or business may be taken from them by government through the power of eminent domain. This guide is intended to introduce you to the law applicable to Pennsylvania eminent domain and the rights to which you are entitled.
The United States Constitution provides the power of eminent domain which may result in extreme consequences for property owners:
“No person shall … be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation.”
- United States Constitution, Fifth Amendment
This guide is intended only as an aid for understanding general eminent domain issues. It does not constitute legal advice and should not be relied upon for that purpose. Laws are subject to change at any time and any such change could render the information contained in this guide obsolete. Legal counsel should be contacted for specific advice regarding specific cases. To do so, simply call, fax, mail or email your question to:
Attorney Michael F. Faherty 225 Market Street, Suite 304 P.O. Box 1245,
Harrisburg, PA 17108-1245
Phone: (717) 233-6633 – Fax: (717) 233-7003
email: mfaherty@laverylaw.com
THE POWER OF EMINENT DOMAIN
Questions:
1. What is eminent domain and when can it be used?
Eminent domain is the power of government to acquire property for public use so long as the government pays just compensation. Recognized public uses for which the power of eminent domain may be used include: highways, roads, schools, public buildings, and the elimination of blight. The government can exercise the power of eminent domain to acquire property even if the property owner does not wish to sell the property. Government taking of such property is called a condemnation, or a taking.
2. Can I challenge the government’s right to acquire my property?
Yes. The vast majority of government organizations possess the power of eminent domain. However, the law recognizes that this substantial power must be used in accordance with specific, detailed procedures. A common challenge to the right to take is failure of the government to follow the proper procedural requirements. If the government fails to correctly follow the required procedures, a right to take challenge may succeed, stopping the condemnation. The challenge to the right to take is presented to a court via preliminary objections. Limited time is allowed for preliminary objections. Such objections must be carefully prepared and filed with the court within thirty (30) days after the property owner is served with the condemnation document which is called a declaration of taking.
3. May I challenge the public use?
Yes, but this challenge is difficult to win for the property owner. The Fifth Amendment of the United States Constitution allows private property to be taken by eminent domain only for a public use. A possible challenge to the government’s right to take can be raised where the proposed government use is not an adequate public use. The 2006 changes to the Pennsylvania Eminent Domain Code limited the uses which qualify as valid public use. Elimination of blight through redevelopment projects may be a public benefit which may satisfy the public use requirement. A use which provides a minor public benefit and a large private benefit may also be held to be public use.
4. What if I am successful in challenging the government’s right to take my property?
When a property owner successfully challenges the government’s right to acquire property by eminent domain, Pennsylvania law provides that the eminent domain proceeding may end. The property owner may be entitled to recover expenses, including reasonable appraisal, attorney and engineering fees.
5. If I challenge the right to take and I lose, am I responsible for the government’s costs?
No. When the right to take is challenged and that challenge is unsuccessful, the government may proceed with the acquisition and the property owner is not liable for the government’s costs. In this situation, the property owner continues to have the same right to be paid just compensation for the property condemned.
EMINENT DOMAIN PROCEDURES
Questions:
1. What steps must the government take to acquire my property by eminent domain?
Multiple, specific steps are required in the condemnation process:
(1) Approval of some project or plan by a governmental organization with the power of eminent domain.
(2) Estimation of just compensation.
(3) The governmental organization will usually attempt to buy the property.
(4) The offer to buy may be based upon an appraisal which might be performed by a governmental employee or a private appraiser hired by the governmental organization.
(5) The government takes, or condemns, land by filing a declaration of taking in a court. A valid declaration of taking satisfies a number of specific requirements including:
2. Must the government notify the property owner?
Yes. Within thirty days after the filing of the declaration of taking the condemnor must give written notice of the filing to the condemnee. That written notice must meet detailed specifications of the information required by law.
3. Am I entitled to a copy of an appraisal report which the government may use to form the basis of the amount of an offer for the purchase of the property?
No! The government is required to estimate just compensation, but is not required to provide the written report of an appraiser. However, when value of the property is disputed the government and the property owner usually exchange appraisal reports before any court proceeding.
4. Am I required to accept the amount of the government offer?
No. The property owner is not required to accept the condemning agency’s offer. Instead, the property owner may make a counter-offer and may request a much higher value of the property. A governmental organization, like any organization acquiring property, has an interest in obtaining such property for a relatively low amount.
The value of the property is very subjective. A wide range of values could encompass the figure which is the true just compensation. Property owners, tenants and business owners often receive higher, and in some cases much higher, compensation than the amount of the government’s offer. This is not always the case and an experienced eminent domain attorney should be contacted to evaluate each case on its own merits. The property owners rights deserve full review and protection.
5. When does possession of property transfer from the owner to the government?
Thirty (30) days after the filing of the declaration of taking the government shall be entitled to possession of the property upon payment of, or offer to pay, the amount of just compensation as estimated by the condemnor.
6. What if I disagree with the amount of the government’s estimation of just compensation?
The estimate of the dollar amount of just compensation is recognized as a very subjective estimate. An appraiser working on behalf of the government may provide an estimate of a figure which is much lower than what the property owner expects. Such a government estimation might be extremely low when compared to an estimate of value as determined by a real estate appraiser working on behalf of the property owner.
If a property owner believes that the government’s estimate of compensation is too low, the property owner may apply to court in order to obtain a higher amount. The property owner may seek greater compensation by a legal filing known as a petition for appointment of viewers. Such a petition would lead a court to appoint a Board of Viewers which would hear evidence of the value of the property.
Experienced eminent domain counsel should be contacted to discuss your specific case. Your case would be handled on a contingency fee basis by which the attorney would receive a percentage of any amount obtained over and above the amount of the government’s offer. In other words, the property owner would owe no attorney fee, unless the attorney obtains more money for the property owner.
JUST COMPENSATION
Questions:
1. What is Just Compensation?
Just compensation is the difference between the fair market value of the property owner’s entire property interest immediately before the condemnation and the fair market value of the property interest remaining after the condemnation.
2. What may be considered in evaluating fair market value?
Fair market value takes into account the present use of the property, the highest and best reasonably available use and also machinery, equipment or fixtures which may form part of the real estate. Other factors may also be considered.
3. May the property owner obtain reimbursement for appraisal, attorney or engineering fees?
Yes. As of September 1, 2006 the cap for this recovery was increased to $4,000.00.
4. May a property owner recover interest when payment to the property owner is delayed?
Yes. Delay compensation is provided for in the Pennsylvania Eminent Domain Code.
5. What if only part of my property is taken?
Often the government needs only a portion of a particular property such as a strip of land needed for road widening. Just compensation is then properly determined not only by the value of the part taken, but also by the damage to the remaining property. Such “severance damages” may be minimal or very significant. Estimates of severance damages are particularly subjective and subject to a wide range of values. Experienced eminent domain counsel and experienced real estate appraisers are important in evaluating the potential damages of partial takings.
6. May a property owner be eligible for moving expenses?
Yes. Any displaced person shall be reimbursed for reasonable expenses incurred in moving himself and his family and for the removal, transportation and reinstallation of personal property.
7. Is a business eligible for relocation damages?
Yes, but such damages are capped.
LEGAL SERVICES
The law firm of Lavery Faherty Patterson provides legal services concerning eminent domain law. The Harrisburg law firm provides statewide services on the direction of Attorney Michael F. Faherty.
Attorney Faherty is a senior partner in the law firm and is one of the most experienced in eminent domain attorneys in Pennsylvania. Mr. Faherty is an honors graduate of Lebanon Valley College. He earned a Masters Degree in psychology from the University of Akron. He is a graduate of Rutgers School of Law in Newark. He worked for the Boy Scouts of America in New York City for six years directing training programs and serving as a finance director.
Mr. Faherty eminent domain work began with employment at the Pennsylvania Department of Transportation. He served as an attorney in the right-of-way section of the real property division. He then handled eminent domain issues and cases before various courts. He was then promoted to the position of counsel in charge of the right-of-way section for PennDOT. He then managed the eminent domain litigation of PennDOT.
Mr. Faherty moved into the private practice of law in 1992 and since then has represented property owners throughout the Commonwealth. He recently served as President of the Pennsylvania Defense Institute, the Pennsylvania association of defense attorneys and insurance executives.
He now serves as the representative for Pennsylvania to the Owners’ Counsel of America. This is the leading national association of eminent domain attorneys protecting property rights.
Mr. Faherty is available for eminent domain legal services. Initial, free consultations are available by contacting Mr. Faherty by phone, e-mail, fax, or correspondence.
A recent Patriot News publication titled Here It Comes described the anticipated natural
gas pipeline planned to run from Lycoming County, PA, to Rockville, MD.
The article touted the anticipated lower energy prices in Central Pennsylvania. However,
other unfavorable aspects of the process are also coming to Central Pennsylvania.
The article repeatedly quoted Bill Moler, the Chief Operating Officer of the responsible
company, Inergy Midstream. He described the company’s approach of paying for
property damages in a manner in which the various owners along the route would receive
the same amount of money per foot of the right-of-way acquisition. Unfortunately, this
plan and approach to property rights is in direct conflict with the controlling Pennsylvania
law, the Pennsylvania Eminent Domain Code.
The correct approach to damages, which may be much more costly to Inergy Midstream,
is to pay eminent damages based on the fair market value of the entire property interest
before and after a condemnation. The proper approach would suggest that a peaceful
residential property would have much more significant monetary damages than a vacant
property. Property owners would be wisely cautious in dealing with a company which
seeks to avoid paying fairly for the acquisition of property rights.
Mike Faherty will speak at the Land Use Institute in Philadelphia on Friday, April 20. This institute is a valuable resource for the land use practitioner. Topics will range from legislative updates to stormwater management, site-specific relief, the new PennDOT regulations that take effect in 2012, as well as many more information-packed sessions.
The Institute will be held from 8:30 am to 4:30 pm on Friday, April 20 at the CLE Conference Center, Wanamaker Building, Philadelphia. It will also be simulcast at 20 different locations across Pennsylvania. For more information and registration click here.
This post is in response to the article by Donald Gilliland which appeared in The Patriot-News: UGI’s ‘Commonwealth Pipeline’ would spread shale wealth through Pennsylvania
The planned Commonwealth Pipeline, recently announced, would bring natural gas from Lycoming County through central Pennsylvania to the Baltimore and Washington markets. It would also bring the threat of eminent domain to property owners in central Pennsylvania. Land agents for oil and gas companies recognize that they have an obligation to negotiate with property owners, but do not have any obligation of good faith negotiations. Property owners would be wise to be wary of negotiators on behalf of company designated to build and operate the pipeline – Inergy Mid-stream. That company recently proceeded with eminent domain actions against property owners in the path of the 39-mile MARC1 pipeline in northern Pennsylvania. The company used documentation of appraisals of the strips of land in negotiations and Sullivan County court filings. Those efforts and documents are in conflict with the Pennsylvania Eminent Domain Code protections whereby property owners are protected by the property damage calculation defined as the entire property interest before the taking as compared to the entire property interest after the taking. That approach will need to be considered for the property owners to adequately protect themselves and their constitutional right to just compensation.
Mike Faherty recently began representation of multiple property owners whose land was condemned by an out of state company building a natural gas pipeline in the marcellus shale play in Northern Pennsylvania. Mike argued in Sullivan County that the security was inadequate, based on Central New York Oil & Gas appraisal documents description of what is known as a “strip” appraisal. The Pennsylvania Eminent Domain Code requires before and after appraisals of the owners’ entire property interest.
The following was an editorial posted in The Patriot News by Amanda M. Olejarski. The editorial raises legitimate concerns about the use of eminent domain by private companies. The natural gas pipeline in Lycoming, Sullivan and Bradford Counties is now under construction as authorized by the Federal Energy Regulatory Comission. Property owners should be aware that the out of state oil and gas company has no obligation of good faith negotiations or fair dealings.
In fact, the condemnor submitted to the Sullivan County court misleading appraisal documents which valued only the strips of land condemned. Fortunately, the Eminent Domain Code provides protection for property owners to be paid just compensation based on the reduced value of the entire property interest. The reprehensible tactics of the condemnor compels property owners to obtain the constitutionally guaranteed just compensation.
“Eminent domain” is probably the most- feared phrase that a property owner can hear — besides, of course, foreclosure. But what is eminent domain? It’s also known as a “taking” because eminent domain is the governmental power to take private property.
The U.S. Constitution limits the takings power in the Fifth Amendment: “Nor shall private property be taken for public use, without just compensation.” Here’s the problem: “Public use” hasn’t meant use for a long time. As far back as 1896, the Supreme Court ruled that public use doesn’t mean that the public can use the property after it’s been taken by eminent domain.
Fast-forward to 2005 when the Supreme Court ruled that economic development met the public use requirement of the Constitution in the “Kelo case.” This was the landmark case in which the city of New London, Conn., used eminent domain, in part, to construct a research facility for Pfizer after it came out with Viagra.
For all of the opportunities (and potential problems) that Marcellus Shale brings to Pennsylvania residents, eminent domain is being overlooked. It’s an imminent problem for property owners in the Keystone State. Presently, much of the focus is on laying pipes to transport the shale gas across the state and beyond. Last month, a story surfaced up in Laporte (100 miles north of Harrisburg) about a pipeline operator using eminent domain to gain access, or easement, to 150 properties in Bradford, Lycoming and Sullivan counties.
In Pennsylvania, Title 26 of the state code allows public utility companies to use eminent domain. Public utility companies can then delegate the takings power to pipeline operators. Yes, you read that correctly: Private pipeline operators can be granted the governmental power of eminent domain.
This is just the beginning of a slippery slope. Once those two magic words, “eminent domain,” are said, everyone’s hands are tied. The entity initiating takings proceedings, the pipeline operator, must pay just compensation. Just compensation is based on the market value of the property. But the property owner’s hands are tied, too, because the only recourse is a legal appeal. The bottom line is when eminent domain is invoked, negotiations outside of the court system are over. This is the real problem with the shale gas in Pennsylvania.
It’s a slippery slope to allow partial takings that don’t affect the property owner’s ability to enjoy the full range of benefits of the property, such as in Laporte. Residents there aren’t so much fighting the easement to put in the pipeline, they are fighting for their ability to negotiate in good faith on the compensation they would be paid.
But what’s coming down the slope is allowing complete takings of private property. Negotiating compensation between the property owner and the government (or pipeline operators) is the first step. No one wants to use eminent domain unless property owners aren’t negotiating in good faith. That’s why the government has the power of eminent domain — to ensure that public projects move forward, even when property owners hold out.
Eminent domain is how states and local governments build roads, bridges and schools. It can be an effective tool for governments to use to improve communities. But there is a problem when eminent domain is given to private pipeline operators and other entities in Pennsylvania without governmental protection and oversight.
Private firms aren’t accountable to the public, and citizens can’t vote them out of office. State and local governments are managed by elected officials and professional public administrators whose first responsibility is upholding the public interest. None of that exists with private organizations whose first responsibility is upholding profit.
Eminent domain is a powerful tool — with great power comes great responsibility. Our government is responsible for protecting its property owners.
Amanda M. Olejarski is an assistant professor of public administration at Shippensburg University.
The following is an update concerning the Philadelphia International Airport plan to expand in Philadelphia and neighboring Tinicum Township. I have been advising Tinicum Township owners of the lack of Philadelphia eminent domain power outside of Philadelphia.
The Airport Enhancement Program was approved by the Federal Aviation Administration (FAA) at the end of 2010. Since then, the Airport expansion has been delayed by court challenges and significant opposition. Tinicum Township and a strong community group, Residents Against Airport Expansion in Delco, have effectively fought expansion into Tinicum Township, where the City of Philadelphia does not have the power of eminent domain. These efforts may force an expansion redesign. Such a potential redesign was recognized in the FAA Order approving the project. The more significant challenge to the project has been presented by the airlines, led by the largest airline of the Airport, US Airways. The airlines could be forced to pay most of the estimated $6.4 billion bill. The airlines have strenuously been negotiating against the project. Those negotiations have broken down, as reflected in public statements recently issued.
The airlines have complained about the cost and Rhett Workman, a US Airways spokesperson, has pointed out that the ground construction would not resolve the fundamental problem of air space congestion. In contrast, Rina Coulter, the Philadelphia deputy mayor for transportation, stated the Airport is moving forward and will build an additional runway. The City indicated that if the airlines fail to agree, the City would pass an Ordinance, by July, to allow it to move forward.
I expect that the Airport, after some further delay, will proceed with a modified expansion project. That project could involve the acquisition of the same or even more Philadelphia properties. Property owners should be fully aware of their property rights to combat deceptive negotiation practices.
