Commercial real estate in New York City can be a cut-throat business. The most strategic and resilient players thrive in an industry filled with intense competition, high stakes and the constant pressure to secure prime properties in one of the most sought-after markets in the world.
But what happens when the government gets involved with its intention of acquiring your property for public use? Can you fight city hall and protect your investment?
Two primary conditions of eminent domain
According to the Fifth Amendment of the U.S. Constitution and New York’s Constitution and Eminent Domain Procedure Law (EDPL), the government has the power to take private property and convert it to public use. For the taking to be legal, it needs to meet two conditions:
- The property must be acquired for a legitimate public purpose, such as roads, schools or public transit. It’s also been broadly interpreted to include economic development projects.
- The owner must be paid fair market value for the property.
In NYC, eminent domain is often used for large-scale redevelopment projects and public housing. Central Park is a prime example of how the government used eminent domain to create a public space.
If a government agency decides it needs your property, it must follow the steps outlined in New York’s EDPL. Before they can begin their acquisition, they must hold a public hearing to outline the project, explain why the acquisition is necessary and state the approximate location of the properties they wish to acquire. As a property owner, you have the right to attend the meeting and make a statement. After the hearing, the government will issue its “Determinations and Findings,” which is a formal declaration that it plans to proceed.
Once the Determination and Findings are published, you typically have 30 days to file a legal challenge. Grounds may include:
- The project doesn’t qualify as a “public use”
- The government agency didn’t adhere to the EDPL’s procedural requirements
- The government agency was influenced by bad faith or fraud, or it’s abusing its power
Challenging the government’s right to take your property is difficult, but not impossible. As soon as you receive a notice regarding eminent domain, you must contact a legal professional. You need someone who can help you understand your rights, evaluate the strength of a legal challenge and guide you through the complicated EDPL process.