Emminent Domain

Eminent Domain

Business Law – LA674

May 19, 2010

Introduction:

A big part of “The American Dream” is owning your own home or starting your own business, and once you own property, no one can take it away from you…not in America…right? Wrong! The doctrine of eminent domain allows exactly that and it’s written into the US Constitution.

In its simplest form, eminent domain is defined as the right of the government to appropriate private property for public use, with fair compensation to the owner. The eminent domain clause, in the 5th Amendment to the US Constitution, says that the government cannot take away anyone’s private property for public use without giving them just compensation in return. This clause is also known as the “takings” clause, because it allows the government to take private property away from a landowner. (Reference 5)

If a business is taken by the government, the owner will be compensated primarily for the value of the real estate on which it sits plus the fixtures inside. It is unlikely that the value of assets such as licenses, goodwill, location, customers, or other intangibles will be considered. If a home is taken, the owner will receive the value of the home at the time of condemnation, and possibly moving expenses. A homeowner will not be compensated for the subjective (emotional or sentimental) value of the home. (Reference 4)

Origins and Evolution:

The concept that the government has the power of eminent domain goes back in English history to the Magna Carta in 1215. This was the first time that the idea was written into law. The Magna Carta was the first official document in English history that required the monarch to obey the written laws of the government. Article 39 of the Magna Carta says:

“No freemen shall be taken or imprisoned or disseised or exiled or in any way destroyed, nor will we go upon him nor send upon him, except by the lawful judgment of his peers or by the law of the land”.

The word...