One of the most confusing terms associated with eminent domain actions by governmental agencies is condemnation. If you are like most people, you likely associate condemnation of properties as the legal process to destroy an unsafe, derelict property.
But when addressing the legalities of eminent domain, condemnation has a different meaning and refers to the process of acquisition of property through the right of eminent domain.
Condemnation is typically rarely used
Most eminent domain actions are resolved through the sale of the property. Negotiations begin with the owners and buyers over the value of the property. There is nothing wrong with haggling over the price you will accept, and most real estate professionals advise against accepting the first offer (which may be intentionally low-balled to start the process).
However, sometimes owners are unwilling to sell at any price. The land may have been in one family for generations and has great sentimental value attached to it by its owners. It is often these cases that wind up condemned.
Other reasons for condemnation
In some circumstances, eager buyers with a redevelopment project on the back burner have potential sellers who want to unload their properties but cannot because there is no clear title to it. When this happens, condemnation may be the easiest and quickest way to purchase the property outright.
Condemnation can give sellers a temporary tax break
Condemned properties may be eligible for tax breaks on capital gains. They get a temporary reprieve and can defer the capital gains on the sale for a couple of years. This is important, because savvy home sellers can then reinvest the cash and earn enough to cover the eventual payment once it comes due.
If you have property being seized through eminent domain, make sure that you understand the laws regarding the seizure and sale of your home or land.