Any local, or state, government can use their eminent domain authority to use a private property for any public project. These projects normally include widening a highway and constructing a bike path or sidewalk, but there are many other reasons why a property is needed. Most of the time, the private property must be sold to the government. But there are times when only a piece of the land is required.
The government is supposed to compensate the landowner for the private property. The landowner can easily challenge the amount of compensation they are being offered, but most likely won’t get a higher amount. They can also file an inverse condemnation, or takings claim, if the government takes any part of their property without paying for it. There are multiple variations of takings claims in the state of New Hampshire.
How Penn Central is Applied to Takings Claims
Every court in New Hampshire applies Penn Central factors to all partial takings. A partial taking is when the value of the property is diminished by less than the full amount of the original property value. Instead of using a strict formula, Penn Central looks at specific circumstances of each individual case to see if compensation is necessary.
The most common Penn Central factors considered include:
- The character of the government action
- The regulation’s economic impact for the landowner
- The extent of which the regulation interferes with the investment backed expectations
The Character of the Government Action
A taking is commonly characterized when it is a physical invasion of any piece of property. Sometimes, the government may want more of one piece of property than all of the others. And yet, they may only be offering the same compensation, despite the larger piece of land. The ruling would be different if it offered better benefits for the general public, as well as the affected landowners.
The Economic Impact for the Landowner
The fair market value of a property can change drastically when a taking occurs. Courts can easily compare the value of the property prior to the taking to what the value of the property is after the taking. The difference must be substantial if a takings claim is going to be approved.
While a 50% difference may seem substantial to a landowner, takings claims for 75% diminished property values have been denied in the past. Therefore, the property value must really be lowered by much more if a landowner wants to win their takings claim. Of course, each scenario is different and the Penn Central factors may result in a lower diminished property value being considered as a major economic impact for a landowner.
Investment Backed Expectations
Some property owners have investment backed expectations for the land they purchased. Those landowners may have purchased a piece of property to develop it, but then the government may have changed the zoning laws after the fact. In those cases, the landowner has an excellent case for a takings claim.
However, if the landowner purchased the property knowing they would need to change local land usage laws, they would not have much of a takings claim case.
Takings claims can be difficult to win, because a specific landowner, or a group of specific landowners, must bear the burden of the new regulation. Thankfully, they are made slightly easier with the Penn Central factors that are used.
If you are in a situation where you are considering filing a takings claim, contact our office today.