In a previous blog posts, we discussed the government’s power to take land through eminent domain and inverse condemnation.
Today we’ll take a closer look at the government’s eminent domain power and how it differs from the government’s police powers.
Police Powers or Eminent Domain: Why Does it Matter?
Understanding the difference between the government’s police powers and its power of eminent domain is important.
Because, generally speaking, when the government acts under its police powers, any impact that may have on property is not compensable. But, when the government acts under its eminent domain power, any impact to private property is compensable.
As a result, it is important to determine at the outset whether the government’s action constitutes a “taking” of private property or whether it is simply the “regulation” of property.
Eminent Domain vs. Police Power
Although the government may take private property from you – including your house – there are specific requirements and limitations to its power of eminent domain.
One critical factor that defines the power of eminent domain is that the government cannot take property from you (either literally or by way of damaging or devaluing it) without paying you “just compensation.”
What constitutes “just” compensation is the subject of much debate and considerable case law and legal analysis. However, for purposes of this post, suffice it to say that if the government’s action constitutes a “taking” of property, it must pay the property owner.
The second most important factor applicable to the eminent domain power is that the government may not take private property unless it is for a public purpose. Unless the government takes private property for a public purpose, its exercise of the power is not valid.
Thus, under its eminent domain powers, the government may take private property as long it is for a public purpose and just compensation is paid for the taking.
In contrast, the government’s police powers allow it to regulate property for the benefit of the public without paying the property owner compensation.
What this means is that the government can prevent a property owner from doing certain things with his or her property. The most common examples of this are zoning and land use restrictions, and environmental or health code regulations.
So, when the government acts through its police powers – properly and without overstepping those powers – it generally does not have to pay the property owner compensation.
The argument is that because regulation of private property does not displace the property owner and does not take away his ability to use the property in a productive way, the government need not pay compensation for the property.
Can regulation of real property rise to the level of a “taking,” then?
It all depends.
As with most legal concepts, the difference between whether the government is acting under its police powers or pursuant to eminent domain is one of degree and depends upon the facts.
Eminent domain is a complex area of law. If you need more information or have questions, consult with experienced real property counsel.
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