Eminent domain traditionally has been used by governments to condemn land for building roads, schools, goverment buildings, and the like. The right of eminent domain may also be assigned to public and private corporations engaged in activities regarded as benefiting the public, such as the development of port facilities, the building of a canal or railroad, or the redevelopment of a blighted area. In 2005 the U.S. Supreme Court, in Kelo v. the City of New London, ruled that the Connecticut city had the right to condemn unblighted private property and transfer it to another private owner for development even if the only public benefit might be increased employment and tax revenues. Public outcry over the decision subsequently led most states to adopt legislation or constitutional amendments that limited, in varying degrees, the ability of state and local governments to use eminent domain to condemn private property for use by a private corporation. At the same time, some government officials and private developers raised concerns over how the laws and amendments would affect their ability to undertake large-scale development projects.
See also public ownership.
The legal doctrine of eminent domain, like the doctrine of seizure of contraband, allows expropriation of property within the existing system of law. Otherwise, expropriation may imply either a criminal or a revolutionary act.
The term "condemnation" is used to describe the formal act of the exercise of the power of eminent domain to transfer title to the property from its private owner to the government. This use of the word should not be confused with its sense of a declaration that real property, generally a building, has become so dilapidated as to be legally unfit for human habitation due to its physical defects. This type of condemnation of buildings (on grounds of health and safety hazards or gross zoning violation) usually does not deprive the owners of the title to the property condemned but requires them to rectify the offending situation or have the government do it for the owner at the latter's expense.
Condemnation via eminent domain indicates the government is taking ownership of the property or a lesser interest in it, such as an easement. In most cases the only thing that remains to be decided when a condemnation action is filed is the amount of just compensation, although in some cases the right to take may be challenged by the property owner on the grounds that the attempted taking is not for a public use, or has not been authorized by the legislature, or because the condemnor has not followed the proper procedure required by law.
The exercise of eminent domain is not limited to real property. Governments may also condemn personal property, such as supplies for the military in wartime, franchises; this includes intangible property such as contract rights, patents, trade secrets, and copyrights.
The practice of condemnation was transplanted into the American colonies. In the early years, unimproved land could be taken without compensation; this practice was accepted because land was so abundant that it could be cheaply replaced. When it came time to draft the United States Constitution, differing views on eminent domain were voiced. Thomas Jefferson favored eliminating all remnants of feudalism, and pushed for allodial ownership. James Madison, who wrote the Fifth Amendment to the United States Constitution, had a more moderate view, and struck a compromise that sought to at least protect property rights somewhat by explicitly mandating compensation and using the term "public use" rather than "public purpose," "public interest," or "public benefit.
At the time the United States was created, it and the several states continued to use the British common law, including the principle of eminent domain. The term "eminent domain" was taken from the mid-19th century from the legal treatise, De Jure Belli et Pacis, written by the Dutch jurist Hugo Grotius in 1625, who used the term dominium eminens (Latin for supreme lordship) and described the power as follows:
"... the property of subjects is under the eminent domain of the state, so that the state or he who acts for it may use and even alienate and destroy such property, not only in the case of extreme necessity, in which even private persons have a right over the property of others, but for ends of public utility, to which ends those who founded civil society must be supposed to have intended that private ends should give way. But it is to be added that when this is done the state is bound to make good the loss to those who lose their property."Some U.S. states, including New York and Louisiana use the term appropriation as a synonym for the exercising of eminent domain powers.
The term compulsory purchase, also originating in the mid-19th century, is used primarily in England and Wales (see compulsory purchase order), and some other jurisdictions that follow the elements of English law. Originally, the power of eminent domain was assumed to arise from natural law as an inherent power of the sovereign.
In the United States and other democratic republics, the people are the sovereign and delegate the power to exercise sovereign powers to their representatives in government. As in English law, what private parties own is not the land itself, but an interest in the property, and it is that interest for which they are entitled to compensation if the government exercises its eminent domain power.
The U.S. Supreme Court has consistently upheld the rights of states to make their own definitions of public use. For instance, in 1832 the Supreme Court ruled that eminent domain could be used to allow a mill owner to expand his dam and operations by flooding an upstream neighbor. The court opinion stated that a public use does not have to mean public occupation of the land; it can mean a public benefit. In Clark vs. Nash (1905), the Supreme Court acknowledged that different parts of the country have unique circumstances and the definition of public use thus varied with the facts of the case. It ruled a farmer could expand his right-of-way (here an irrigation ditch from a river) on another farmer's land (with compensation), because that farmer was entitled to the "the flow of the waters of the said Fort Canyon Creek... and the uses of the said waters... [is] a public use." Here in recognizing the arid climate and geography of Utah, the Court indicated the farmer not adjacent to the river had as much right as the farmer who was, to access the waters. However, until the 14th Amendment was ratified in 1868, the limitations on eminent domain specified in the Fifth Amendment applied only to the federal government and did not to the states. That view ended in 1896 when in the Chicago B. & Q. Railroad v. Chicago case the court held that the eminent domain provisions of the Fifth Amendment were incorporated in the Due Process Clause of the Fourteenth Amendment and thus were now binding on the states. This was the beginning of what is known as the "selective incorporation" doctrine.
An expansive interpretation of eminent domain was reaffirmed in Berman v. Parker (1954), in which the U.S. Supreme Court reviewed an effort by the District of Columbia to take and raze structures that were primarily--but not entirely--blighted, in order to eliminate slums in the Southwest Washington area. After the taking, held the court, the taken and razed land could be transferred to private redevelopers who would construct condos, private office buildings and a shopping center. The Supreme Court ruled against the owners of non-blighted properties within the area on the grounds that the project should be judged on its plans as a whole, not on a parcel by parcel basis. In Hawaii Housing Authority v. Midkiff (1984), the Supreme Court approved the use of eminent domain to transfer a land lessor's title to its tenants who owned and occupied homes built on the leased land. The court's justification was to break up a housing oligopoly, and thereby lower or stabilize home prices.
The Supreme Court's decision in Kelo v. City of New London, 545 U.S. 469 (2005) affirmed New London’s authority to take non-blighted private property by eminent domain, and then sell the property to a private developer solely for the purpose of increasing municipal revenues. This 5-4 decision received heavy press coverage because the Court sided with the city's argument that this sort of taking and private redevelopment was a public benefit. Kelo inspired a public outcry that eminent domain powers were too broad. This resulted in several states enacting or considering state legislation that would further define and restrict the state's own power of eminent domain. The Supreme Courts of Illinois, Michigan (County of Wayne v. Hathcock(2004)) and Ohio (Norwood, Ohio v. Horney(2006)) have recently ruled to disallow such takings under their state constitutions.
The redevelopment in New London, that was the subject of the Kelo decision, proved to be a failure and as of the summer of 2008 (three years after the court's decision) the redeveloper has not been able to obtain financing for the project and nothing has been built on the taken land in spite of the expenditure of some $80 million in public funds.
American libertarians argue that eminent domain is unnecessary. Bruce L. Benson notes that utilities, for instance, have a variety of methods at their disposal, such as option contracts and dummy buyers, to obtain the contiguous parcels of land needed to build pipelines, roads, and so forth. These methods are routinely used to acquire land needed for shopping malls and other large developments. Defending the Undefendable argues that the problem of recalcitrant landowners (i.e. "the curmudgeon") who refuse reasonable offers for the sale of their land is solved in the long term by the fact that their failure to accumulate wealth through such trades will give them a relative disadvantage in attempting to accumulate more land. Thus, the vast majority of land will tend to ultimately end up in the control of those who are willing to make profitable exchanges.
For the purposes of section 51, subsection xxxi, money is not property which may be compulsorily acquired; the Commonwealth must also derive some benefit from the property acquired and not merely seek to extinguish the previous owner's title (Mutual Pools and Staff Pty Ltd v Commissioner of Taxation (1992) 173 CLR 450). A statutory right to sue has been considered "property" under this section (Smith v ANL Ltd (2000) 176 ALR 449).
The term resumption is a reflection of the fact that all land was owned by the crown in 1788, and that the crown is resuming ownership.
The provisions relating to the right to property were changed a number of times. The 44th amendment act of 1978 deleted the right to property from the list of Fundamental Rights. A new article, Article 300-A, was added to the constitution which provided that "no person shall be deprived of his property save by authority of law". Thus, if a legislature makes a law depriving a person of his property, there would be no obligation on the part of the State to pay anything as compensation. The aggrieved person shall have no right to move the court under Article 32. Thus, the right to property is no longer a fundamental right, though it is still a constitutional right. If the government appears to have acted unfairly, the action can be challenged in a court of law by citizens.
with the Liberalization of the economy and govt's initiative to setup special economic zones has led to many protest by farmers and have thrown the fundamental right to private property reinstatement.
The vast majority of expropriated owners accept the amount of the indemnification, which usually is in line with real estate market values.
There are other countries such as the People's Republic of China that practice eminent domain whenever it is convenient to make space for new communities and government structures. Singapore practices eminent domain under the Land Acquisitions Act which allows it to carry out its Selective En bloc Redevelopment Scheme for urban renewal. The Amendments to the Land Titles Act allowed property to be purchased for purposes of urban renewal against an owner sharing a collective title if the majority of the other owners wishes to sell and the minority did not. Thus, eminent domain often invokes concerns of majoritarianism.