What Property Buyers Need to Know About Eminent Domain

27 June 2025

Buying property is an exciting step, whether it’s your dream home, an investment opportunity, or a piece of land for a future project. But imagine purchasing a property, only to find out the government can take it away. Sounds like a nightmare, right? This is where eminent domain comes into play.

If you're planning to buy property, understanding how eminent domain works could save you from an unpleasant surprise down the road. Let’s dive into what this legal power means, how it affects property buyers, and what you can do if it happens to you.

What Is Eminent Domain?

Eminent domain is the legal power of the government (federal, state, or local) to take private property for public use—as long as the property owner is paid fair compensation. This means that if the government believes your land is necessary for a highway, a school, or a public park, they can legally acquire it, even if you don’t want to sell.

How Does It Work?

The process usually follows these steps:

1. Government Decision – Authorities determine that a certain property is needed for a public project.
2. Offer of Compensation – The government assesses the property's value and offers the owner a purchase price.
3. Negotiations – The owner can accept the offer or negotiate for higher compensation.
4. Condemnation Lawsuit – If the owner refuses to sell, the government may file a lawsuit to take the property via eminent domain.
5. Court Decision – A court may decide whether the government’s actions are justified and determine a fair compensation amount.

Now, this may sound concerning if you’re in the market for real estate, so let’s break down how it might impact property buyers.

How Eminent Domain Can Affect Property Buyers

1. You Might Lose Your Property

The most obvious risk is that the government could take your property if it’s in the path of a planned public project. Even if you’ve spent time, effort, and money on making it your dream home, eminent domain can force you to relocate.

2. Property Value Can Be Impacted

If there are rumors of an upcoming government project in the area, property values might fluctuate. Buyers may hesitate to invest, and sellers may struggle to get a good price.

3. Rental Income Could Be Disrupted

For real estate investors, eminent domain could disrupt rental income. If a rental property is seized, tenants may have to move out, and the owner loses a source of revenue.

4. You May Not Get the Full Market Value

While the government is required to pay “just compensation,” it doesn’t always align with what the owner believes their property is worth. Owners may have to negotiate or go to court to receive fair value.

5. Partial Takings Are Possible

Eminent domain doesn’t always mean losing an entire property. Sometimes, only a portion of your land is taken, which could negatively impact usability and overall property value. Imagine losing part of your yard or driveway—it changes the way you use the property!

Can You Avoid Buying a Property at Risk of Eminent Domain?

If you’re in the market for a home or investment property, you’re probably wondering: Can I avoid this issue altogether? While there’s no foolproof way to dodge eminent domain, there are some precautions you can take.

1. Check for Planned Public Projects

Before purchasing, research whether there are any upcoming public developments in the area. Local government websites, city planning meetings, and public records can provide insights into future projects.

2. Work with a Knowledgeable Real Estate Agent

A good real estate agent will have local knowledge and may be aware of properties that could be at risk of being seized. They can help you navigate potential red flags during the buying process.

3. Review the Property’s History

Look into the history of the property and surrounding area. Has land nearby been subject to eminent domain in the past? If so, the chances of something similar happening again might be higher.

4. Consider Title Insurance

While title insurance doesn’t prevent eminent domain, it can protect against legal claims that weren’t disclosed before purchase. This can be useful if complications arise later.

What to Do If Your Property Is Targeted by Eminent Domain

If you already own property and receive notice that the government wants to take it, you’re not entirely powerless. Here’s what you can do:

1. Don’t Panic—Understand Your Rights

First, know that the government must offer fair compensation, and you have the right to challenge the offer in court.

2. Hire a Real Estate Attorney

An experienced eminent domain attorney can help you negotiate for a better deal or challenge the government’s claim. They’ll ensure that you get the compensation you deserve.

3. Get an Independent Appraisal

The government’s valuation of your property might not match its true worth. Consider hiring a private real estate appraiser to assess the fair market value.

4. Fight the Taking (If Possible)

If the government’s project doesn’t genuinely qualify as “public use,” or if they didn’t follow legal procedures, you might have grounds to challenge the eminent domain action in court.

5. Negotiate for More Time

If you do have to vacate, you may be able to negotiate for additional time to find a new property and relocate smoothly.

Final Thoughts

Eminent domain is one of those legal concepts that most property buyers don’t think about—until it directly affects them. While it might not be a deal-breaker when buying property, it’s important to be aware of the risks and take preventative steps when possible.

By staying informed, doing proper research, and working with the right professionals, you can minimize the chances of being blindsided by an eminent domain claim. As always, knowledge is power when it comes to real estate investments!