EMINENT DOMAIN LANDOWNER GUIDE What Every Wisconsin Landowner Should Know

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1 LIND WEININGER LLC Madison, WI Wisconsin Eminent Domain and Condemnation Lawyers EMINENT DOMAIN LANDOWNER GUIDE What Every Wisconsin Landowner Should Know Spring 2014

2 Wisconsin Eminent Domain and Condemnation Law What Every Landowner Needs to Know! Eminent domain is the power to take private property for public use. The government (local, state and federal) has the power of eminent domain as well as certain public utility companies. Typically, eminent domain is used for roads, highways, airports, government buildings, pipelines and power lines. The exercise of the power of eminent domain continues to expand. The power of eminent domain comes from the 5th Amendment to the U.S. Constitution which states: 2 nor shall private property be taken for public use, without just compensation. W While your property may be taken from you, you are entitled to receive just compensation for your land. This is a constitutional right. Just compensation is typically the fair market value of your property. To help ensure you receive just compensation for your land, Wisconsin law has specific statutory procedures in place to determine fair compensation. However, the law and procedure is complex, with tight deadlines and procedural requirements. TThis Wisconsin Eminent Domain Landowner Guide is written with the Wisconsin property owner in mind to help better explain this complex process. It is in not a substitute for the law or for contacting an attorney. It is simply to give you, the landowner, some things to think about and (hopefully) make the process simpler and clearer.

3 Overview of the Eminent Domain Process At times, the eminent domain process can seem confusing and maybe even overwhelming. Below is a brief overview of how the process works broken down into 5 phases from beginning to end. 1. Early Stages. The government, government agency or other entity with eminent domain power such as a utility company (the acquiring authority ) identifies the need for a project which will affect private property. The acquiring authority must research the impact the project will have on the land, determine what land it will need and identify the landowners who will be affected. 2. Negotiations. The acquiring authority will then contact the landowners who will be affected by the project. The acquiring authority will prepare an appraisal and provide a copy to the landowner. The landowner then has an opportunity to have their own appraisal prepared. The acquiring authority must then negotiate with the landowner and try to work out an agreement. 3. The Taking. If an agreement cannot be worked out, the condemnor has the right to simply take the landowner s property and must pay the landowner what it determined to be the fair market value. A document will be recorded with the register of deeds office to complete the exchange of ownership and the landowner will be paid. 4. Opportunity to Appeal. The landowner then has the opportunity to appeal the amount of compensation they were paid. Even if the landowner voluntarily sold their property, they may have 6 months from the date the document was recorded to appeal the amount of compensation. If the property was taken the landowner may have up to two years to appeal. 5. Appeal Procedure. The appeal must be filed within this timeframe in the circuit court for the county where the property is located. A judge or jury will determine how much the property is worth. However, a majority of cases are settled between the parties out of court prior to a trial. Commonly, the acquiring authority will have to pay the costs and attorney s fees of the landowner. Each side may appeal to the court of appeals and even the supreme court.

4 1Legal Definition of Eminent Domain Eminent domain is the government s ability to take private property for public use. The power of eminent domain is derived from the Fifth Amendment of the United States Constitution. This provision is commonly referred to as the Takings Clause. It states that private property shall not be taken for public use, without just compensation. The Wisconsin Constitution has a similar Takings Clause provision. The Wisconsin Constitution provides that The property of no person shall be taken for public use without just compensation. Article I, section 13 of the Wisconsin Constitution. 3Explanation of Just Compensation You are entitled to just compensation for both the loss of property and damage caused to your remaining property. Just compensation is also referred to as fair market value. There are numerous things to consider in determining what just compensation is for the taking of your property. If the Wisconsin DOT is taking all of your property, you are entitled to compensation for all of your property. This is called a total taking. If the DOT is only taking part of your property, it is called a partial taking. In the case of a partial taking, you are entitled to compensation for not only your lost property, but also any damage to your remaining property. This is known as severance damages. It includes things such as access right and air rights. Eminent domain is a fairly common term. Many people have heard of it and have a general idea of what it is. However, many people are unsure exactly what it is. 4 I ve Heard of Eminent Domain: But What Does It Really Mean? 2How Eminent Domain is Used The government exercises its eminent domain power for a broad range of uses. Commonly, these uses include acquiring land for highway construction (new roadways, expanding existing roadways, roundabouts, frontage roads, airports) and utility projects (power lines, wind turbines, sewer). However, the government continues to expand its use of eminent domain and uses this power to acquire land for things such as schools, airports, government building, public parks or even to redevelop a blighted property. In Wisconsin, eminent domain is commonly used by the Wisconsin Department of Transportation to acquire land for highway projects. In addition, to taking land for Wisconsin highway projects, the Wisconsin Department of Transportation will acquire Temporary Limited Easements to occupy part of your property during construction. They will also acquire easements and right of way. 4Importance of Selecting the Right Appraiser One of the most important steps in the eminent domain process is having your own appraiser determine the value of your land. However, it is not as simple as typing appraiser into Google or looking in the yellow pages. Eminent domain appraising, just like eminent domain law, is a niche area of practice. Not all appraisers are familiar with eminent domain appraising. It is extremely important to choose an experienced eminent domain appraiser who will accurately determine the fair market value of your land. We work with a number of experienced eminent domain appraisers and can help you find the right appraiser for your case. Every appraiser has different strengths and levels of experience. We will review your appraisal and make sure the appraiser we select for your case is a good match for your case.

5 What is Just Compensation? And How Can I be Sure I m Receiving It?..nor shall private property be taken for public use, without just compensation." O 5th Amendment to the United States Constitution Our founding fathers deemed that the government could only take land for public purposes through eminent domain if they paid "just compensation." It sounds fair. It even has a certain patriotic ring to it. But what does it mean? And how do landowners know they are receiving just compensation. Generally, "just compensation" is equal to fair market value ("FMV"). However, that is pretty vague and one person's belief as to FMV might be very different than another person's idea. Therefore, if the landowner and the acquiring authority cannot agree on a price, Wisconsin law sets out rules for determining the value of the land that is going to be taken. The procedure for determining the FMV can be found in Wis. Stat. sec In determining FMV, the property must be evaluated on the basis of "its most advantageous use" also commonly referred to as "highest and best use." The process for determining highest and best use has been explained as follows: It is well established that market value in an eminent-domain proceeding is to be based not necessarily on the use to which the property was being put by its owner at the time of taking but rather on the basis of the highest and best use, present or prospective, for which it is adapted and to which it might in reason be applied. Bembinster v. DOT, 57 Wis. 2d 277, 283, 203 N.W.2d 897 (1973). Therefore, one of the biggest issues in determining FMV is determining what the "highest and best use" of the subject property is. Just because land is currently being used for one purpose does not mean that the highest and best use is not a different (more valuable) purpose. For example, a landowner may currently be using the property as farmland (low value), but it is reasonably foreseeable that the property will be developed for residential purposes (higher value). Similarly, it may be reasonably foreseeable that residential property may be developed for commercial purposes (highest value) in the foreseeable future. Frequently, the acquiring authority will assign the landowner's highest and best use as its current use. This potentially reduces the value of land because it does not take into account what the land can be used for, only what it is currently being used for. This results in the land owner receiving significantly less than their land is worth. 5

6 Prepared by: Lind Weininger LLC 8020 Excelsior Drive Suite 402 Madison, WI (855) toll free 6