Public entities are often faced with the challenging issue of acquiring property for construction projects. Acquiring property can be a lengthy process depending on property owners’ disposition with regard to selling property. 

Some property owners may outright refuse to sell property, while others see a public entity seeking property and see big dollar signs. When a property owner is not inclined to sell its property, or intends to extract as much money out of a public entity as possible, it is important for a public entity to be prepared to follow the statutory eminent domain process. Even when the initial interactions with a property owner look promising, property owners can change their minds well into the negotiation process. 

The eminent domain process has many steps and time periods to consider when you are planning to acquire specific property. Acquiring property for a construction project is certainly not an issue a public entity should wait until the last minute to address. Initiating the process to acquire property is one of the first issues that needs to be addressed, and addressed as early in the planning process as possible.

This article will not dive into details specific to each type of public entity in Ohio. There are, however, many steps in the statutory eminent domain process that are common for all public entities.

Authorization to acquire property

The Ohio Constitution, Article I, Section 19 provides, in part, that “[p]rivate property shall ever be held inviolate, but subservient to the public welfare.” Emphasis added. This is strong language, but this is not a license for a public entity to take property whenever it feels the desire to do so. There are many limitations on a public entity when appropriating property. 

A public entity’s express authorization to acquire property is provided by the legislature through the Ohio Revised Code, and can be unique to each public entity. For example, the Ohio Revised Code gives school district boards of education the ability to acquire property through appropriation when determined to be necessary to “procure or enlarge … any site for a building to be used for public school purposes whether as classrooms, auditorium, or for technical training, administrative, storage, or other educational purposes” among other more unique situations. Identifying a public entity’s express statutory authorization to acquire property is important to justify the need to acquire property and to defend your actions when faced with a challenge to a public entity’s right to appropriate property.  

Valuation

Once a public entity identifies the need and the authority to appropriate property, it needs to determine what that property is worth. A public entity does not typically obtain property for free. The Ohio Constitution, Article I, Section 19 also provides, in part, that “a compensation therefor shall first be made in money, or first secured by a deposit of money; and such compensation shall be assessed by a jury, without deduction for benefits to any property of the owner.” This compensation will be the fair market value of the property as determined through appraisal, and by negotiation or by a decision from a jury, if the acquisition gets to that point. 

A public entity has a statutory right of entry to enter the property for the purpose of appraising, surveying, or examining the property after providing the property owner at least 48 hours (but no more than 30 days) notice. After examining the property to determine the suitability of the site for the intended public purpose and having the property appraised, the public entity will determine if it is still interested in acquiring the property.

Notice to property owner

Once the appraisal is complete and the public entity determines to move forward with the acquisition, the public entity presents the property owner with a notice of intent to acquire that must be in a form provided by statute. This notice may also include the required written good faith offer, which will generally include the full appraisal unless the fair market cost of the property is less than $10,000, in which case only a summary of the appraisal needs to be provided. 

At this time, the property owner either accepts or rejects the good faith offer. Negotiations may certainly continue; but, depending on the public entity’s schedule for the planning and construction of its construction project, the public entity may need to look to the court to complete the acquisition. 

Petition to appropriate property

If the property owner refuses to accept a good faith offer or negotiate the purchase of the property, the public entity should prepare to file a petition with the court to appropriate the property. The petition must be filed and served to the property owner more than 30 days after the public entity provides the property owner with the notice of intent to acquire property. 

The property owner has 28 days after service of the petition to file an answer. If the property owner does not file an answer and the matter is not settled, the public entity can file a motion with the court to determine the value of the property and damages to any part of the property not being appropriated. Or, if the public entity does not file such a motion, the court will set a time to determine such compensation within 20 days of the date the answer was required to be filed.

In most cases, if the property owner does file an answer, it will either deny that the public entity has the right to acquire the property, deny that the public entity and property owner disagree on the acquisition, or deny that there is a necessity for the appropriation. In any of these situations, the court will hold a hearing within 5 to 15 days of the property owner filing its answer. If the public entity prevails at this hearing, the court will set a jury trial for within 60 days to determine the compensation to the property owner. If the property owner files an answer, but does not make the above denials, a jury trial will be set for within 20 days of the answer date.

Mediation is always an option to resolve any dispute. If either the property owner or public entity requests mediation within 10 days of the property owner’s answer, the mediation must be completed within 50 days of the answer date. 

If the court renders a decision on the appropriation in the public entity’s favor and determines the compensation to be paid to the property owner, the public entity may take possession of the property once all costs are paid as provided in the court’s decision. But, what if the property owner refuses to accept any payment? In this situation, the public entity is permitted to deposit the funds with the court and then take possession of the property. 

Conclusion

The eminent domain process in Ohio is complicated and can take many twists and turns depending on the facts and circumstances a public entity faces. It is important when dealing with property owners to be forthcoming with the intentions of the public entity, to explain the basic process of a public entity’s authority to acquire property, and to provide the property owner with the opportunity to seek its own legal counsel. 

The time required to navigate the eminent domain process could be a matter of months, or well over a year before the property is acquired. The length of time can be even longer if the statutory process is initiated late in negotiations. Most property acquisitions are resolved through negotiation. But, following a systematic statutory-based process will assist the public entity in acquiring the property in the least amount of time, at a fair price, and in a lawful manner. 

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