Eminent domain is the government’s power to take private land for public use. Recently, the Legislature passed and sent to Governor Schwarzenegger for his signature Senate Bill 1210, which makes several significant procedural changes to California’s eminent domain law. The bill, which was signed into law on September 29, 2006, makes it more difficult, costly, and time-consuming for government agencies to obtain possession of property for public projects before the conclusion of eminent domain lawsuits.
Previously, Code of Civil Procedure sections 1255.410-1255.470 allowed public entities to obtain possession of property relatively quickly and easily after filing an action in eminent domain. The current procedure allows work on a public project to begin prior to the conclusion of the eminent domain action and passage of title. In counties with congested courts, it can be more than 18 months before a case goes to trial. If the public entity had deposited the probable amount of compensation with the State Treasury, it could immediately apply "ex parte" for an Order for Prejudgment Possession. The burden of proof for obtaining such an order was very low and public entities were usually entitled to possession 30 days after serving such orders on owners of unoccupied property and 90 days after serving the owners and occupants of occupied property. In an emergency, a public entity could obtain possession as little as three days after service of the order by establishing an urgent need for the property that outweighed the hardship of such short notice imposed on the owner and occupants.
Property owners and occupants who believed they would suffer substantial hardship from such an Order for Prejudgment Possession could seek to have the order set aside by filing a motion within 30 days after they were served with the order.
The new law, which will take effect January 1, 2007, will radically change the procedures for obtaining Orders for Prejudgment Possession, making it both more difficult and more time consuming to obtain possession before judgment is entered. The new law will also add costs by requiring governments to pay for the property owner to obtain his or her own appraisal.
Instead of the speedy and inexpensive "ex parte" procedure, the new law requires a lengthy noticed motion procedure. For unoccupied property, public agencies will have to serve property owners with a formal motion for possession at least 60 days in advance of a court hearing; 90 days notice of the motion will be required for occupied property. The new law also imposes a significant new burden of proof on agencies bringing such motions.
Under the new procedures, property owners and occupants have 30 days in which to file an opposition to the motion. If the motion is unopposed, the Court may grant possession upon the simple showing by the government that it is entitled to take the property by eminent domain and has deposited an amount meeting “just compensation” requirements. If a defendant opposes the motion, however, the Court may grant possession only if it also finds that the public entity has an overriding need to possess the property, will suffer a substantial hardship if the motion is denied, and that its hardship outweighs the hardship to the property owner of granting the motion.
It is unclear what standards the courts will use to evaluate the relative hardships faced by the condemning agency and the property owners and occupants. As a result, the new law creates scheduling uncertainty for all public projects requiring the use of eminent domain. Agencies unable to obtain an Order for Prejudgment Possession under the new law will have to wait until final judgment is entered to obtain possession. Because of other procedural provisions of California’s eminent domain laws, cases that go to trial proceed to judgment more than one year after a complaint is filed. In counties with clogged courts, this may mean a delay of 18 months or more in getting possession of the property. If the case is appealed, several more years may pass before possession is obtained.
When a public agency does convince a court to issue an Order for Prejudgment Possession, it must serve the order on the property owners 10 days before taking possession of an unoccupied property and must serve it on the owners and occupants 30 days before taking possession of an occupied property. The net effect is that the bill will increase the times required to obtain possession of unoccupied properties to a minimum of 70+ days after filing the complaint, and the time required to obtain possession of occupied properties to at least 120+ days after filing. As a practical matter, because of the time required to file and serve such motions and orders, it will almost always take more than 90 days after filing the complaint to obtain possession of unoccupied properties and at least 140 days to obtain possession of occupied properties.
Utilities facing emergency situations are exempted from these new requirements.
SB 1210 also requires every agency seeking to acquire property to pay the costs of an independent appraisal requested by a property owner, up to $5,000, before the agency can exercise the power of eminent domain.
The new law also prohibits redevelopment agencies from exercising eminent domain powers more than 12 years after the adoption of their redevelopment plan unless they first show that “substantial blight” still exists in the plan area that cannot be eliminated without the use of eminent domain.
Finally, SB 1210 added a conflict-of-interest provision that prevents a public entity’s board member, who also sits on an organization’s board of directors, from voting on an eminent domain matter, if the organization has an interest in the property the public entity seeks to take.
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