We only represent property owners. So, this is a discussion of how a typical case proceeds from a property owner’s perspective.
First, the city, state or utility will notify a property owner that private property is needed for a governmental purpose, be it a roadway expansion, light rail, power lines or any number of public purposes. The condemning authority will order an appraisal and make an offer to purchase the private property at a price supported by that appraisal.
The Purchase Offer
If the property owner believes the price offered is fair. In most cases, the purchase of the property would proceed like a normal real estate transaction without any further actions required.
However, if the property owner believes the offer is not fair, that is when it gets complex and may be in the property owner’s best interest to seek legal counsel.
The Complaint
Once a property owner has notified the government entity that they don’t accept the offer, Arizona law allows a city or state to file a condemnation action anytime after twenty days from when they have submitted the purchase offer. Sometimes, condemning authorities forget to follow this procedure, but generally the offer is included with a written ¬threat to file a lawsuit if the offer is not accepted. Frankly, the threat generally lacks economic substance because the condemning authority, such as the City, cannot get control of your property until a judge says so.
Possession
A Superior Court Judge will not grant possession to a city for a public project until cash or a security bond has been posted in an amount equal to its last offer to the property owner. Assuming that there are no loans on the real property, the amount of the offer can be released to the property owner without affecting the property owner’s efforts to receive “just compensation” – a fair price for the property. Just compensation also could include a fair price for relocating a property owner’s home or business.
Typically, there is a hearing for possession called an “Order To Show Cause” that can occur within forty-five days from the filing of a Complaint. Assuming possession is granted, then the parties engage in discovery, which means the disclosure of witnesses, exhibits, and the development of expert reports. Because this is eminent domain, the expert work almost always includes a report from a licensed appraiser and often includes studies from land planners or engineers for property that has particular planning issues.
Settlement Discussions and Trial
Once the expert reports have been prepared, Arizona courts often order participation in some form of mediation. The mediator attempts to find common ground between the parties to make a deal, but the mediator has no authority to force resolution, but their job is to attempt to get the parties to reach a mutual settlement. In the event that mediation fails, then there will be a trial, often before a jury. In Maricopa County, you can count on waiting 12 – 18 months from the original filing of the case before a trial is scheduled.
As to the economics, most lawyers that represent property owners offer contingent fees of a percentage ranging from 20 – 40% of any increase obtained by the lawyers for the benefit of the property owners. The fees generally depend on the complexity and scale of the specific case. While it is also typical that the property owners are responsible for expert costs incurred, contingent lawyers do not share in any portion of the original condemning authority offer. Hourly fees are also available for owners who understand the costs and risks of litigation.
Last, in the event that the property owner has no immediate need for the funds placed on deposit as a condition of possession, those funds and any increase in just compensation all bears interest at a State Law rate which is all substantially equal to the prime rate. In the last year, the prime rate has been as high as 8.25% and as low as 3.25%.
Generalities about anything are fraught with error, as is this anatomy of a condemnation case. However, any eminent domain starts with a rejected low-ball offer from the condemning authority, a Complaint, an Order to Show Cause, a deposit, expert reports, mediation, and then trial if mediation fails. For owners with questions about their particular property, we are always ready to answer your questions.