WHAT YOU SHOULD KNOW ABOUT YOUR RIGHTS

AS A PROPERTY OWNER

Government, federal, state and local, has the right to take private property provided the property is taken for a public use and just compensation is paid to the property owner.

A public use is the building of a road or a school or a park or a water/sewer line or other public facility.  A public use is also redevelopment of a section of a city or town to clean up or demolish deteriorating, blighted properties, or to advance economic and business interests within a community or to create better living conditions for residents of the affected area.   

Q. Can Connecticut or the town in which I own property take my property?

A. Yes.  The state or town has the right to take private property that is needed to carry out a public function or to protect the community from unsafe, unsanitary, deteriorating slum or blighted areas or to promote the economic welfare of the state and the continued growth of industry and business within the state and to provide for better living conditions.

Q. Is the right of government to take private property spelled out in the Constitution of the United States or Connecticut?

A. No. The authority of government to take private property is believed to be an inherent power of government.  The founders of our country did not want that power to be unlimited or used arbitrarily against the citizens or their property.  They recognized the right of the people to own property, use it for their own purposes, derive income from it and exclude others from entering without their permission.  The founders placed limitations on government’s power to take privately owned property by inserting the Fifth Amendment into our federal constitution and Article First, Sections 8 and 11 into our state constitution.

Q. Are there federal and state statutes that permit government to take privately owned property?

A. Yes. Federal and state statutes do authorize government in certain situations to take property for purposes the Congress or our state legislature determines is for the public’s benefit and use.

Q. What is the difference between public use and public benefit?

A. As interpreted by our legislature and courts, practically, none.   “Public use” are the words you will find in the federal and state constitutions.  They were originally understood to mean uses associated with government such as constructing a road, school or other public building.  Today the words “public use” mean much more.  “Public use” includes the clean up of blighted areas and the establishment of economic/business development zones in which the land and structures situated thereon will be redeveloped in accordance with a plan approved and, in most instances, supervised by local government. Public use also means construction of housing and other facilities intended to improve living standards and conditions of the citizenry.  All of these uses are for the “public benefit” and are considered legitimate reasons for the taking of privately owned property.

Q. If my property is well maintained, does that mean it can not be taken by the state or the municipality in which the property is located?

A. No. Our state legislature has said and both the United States Supreme Court and the Connecticut Supreme Court have confirmed that non-blighted properties can be taken for public use or purpose.  If a non-blighted property is taken as part of an approved municipal redevelopment plan, Connecticut’s courts have determined such a taking is permitted so long as the public agency taking the property can demonstrate the necessity of including non-blighted properties into the scheme of development.

Q. What does “blighted” mean?

A.  Blighted refers to the condition of a property or an area.  It could describe properties or areas in which a high percentage of the properties are substandard, unsanitary, unsafe, deteriorated, deteriorating, obsolete, congested or without adequate public utilities or community facilities.  There is no one factor that makes a property or a group of residential or business properties blighted.  Usually, there are several factors affecting the properties or areas before government determines a property or neighborhood is blighted.

Q. How will I know government is intending to take my property?

A. The state or municipality or one of its departments or agencies will notify you in writing if it intends to take your property for a public use.  If the property is located in an area that is intended for a municipal or economic development project, the responsible agency or any entity authorized to acquire property through eminent domain on behalf of a public agency is required to conduct a public hearing and give you and others in your area prior notice of the time, place and subject matter of the hearing. 

Q.  Are there other requirements before a municipality can take my property?

A.  Yes.  No parcel may be acquired by eminent domain for municipal or economic development purposes (under Connecticut General Statutes Chapters 132 and 588l) except by vote of at least two-thirds of the members of the legislative body of the municipality.  In towns where the legislative body is town meeting or representative town meeting, two thirds vote of the Board of Selectmen will be required.  In addition there must be a separate vote taken on each parcel of property to be acquired, or at a minimum, separate identification of each property for purposes of a vote to authorize a taking.  In those instances when a redevelopment agency is the taking authority, a simple majority of the members of the agency is required.  Plans for most projects require approvals by other state and local land use regulatory boards and commissions. Other municipal purposes require a vote of the legislative body of the municipality and in some towns because of the amount of appropriation or the use of eminent domain or both a referendum may be required.  

Q. Are the meetings and deliberations concerning my property open to the public?

A. Yes.  You may view any of the plans or designs or minutes of any meeting pertaining to your property or area.  All meetings are open to the public and you may not be excluded from a meeting at which your property or neighborhood or area is being discussed.  The public agencies must comply with all Freedom of Information Act requirements.  

Q. Are there reasons why a public agency is not allowed to take private property?   

A. Yes. No property can be taken under the pretext of public use when the real reason for the taking is to benefit another private property owner and the only public benefit is incidental.  Eminent domain can not be used by a municipality unless the legislative body of your community first determines with respect to any property: the public benefits outweigh any private benefits, the current use of the property cannot be feasibly integrated into the overall development plan and the acquisition of the property is reasonably necessary to successfully achieve the objectives of the development plan. 

Q. Who determines whether a use is primarily for public or private benefit.

A.  The state legislature makes determinations about public uses when it enacts statutes that permit public agencies, including municipalities, to acquire real property using eminent domain.  A property owner may challenge in court the constitutionality of a statute or the constitutionality of the taking of one’s property.

Q. What does the term “eminent domain” mean?

A. Eminent domain is the legal process by which government takes private property and determines the amount of “just compensation” to be paid to the owner of the property.

 Q. How does the state or municipality determine the amount of “just compensation?”

A.  It is determined by use of an appraisal, sometimes more than one, performed by independent licensed appraisers or by qualified appraisers in the employ of the state or municipality.  Usually there is an agency review process before fair market value of your property is set.  In the case of municipal and business development projects as defined under Connecticut General Statutes Chapters 132 and 588l the public agency is required to offer to pay 125% of the average of two independent appraisals.  Copies of both appraisals are required to be provided to the property owner.

Q. How will I be notified of the amount the state or municipality has decided to offer for my property?

A. By a written communication, usually mailed to you or delivered by an official of the agency or a state marshal.   

Q. What if I don’t agree that the amount of money offered to me for my property is enough?

A. The government is required to pay the full fair market value of your property at the time of the taking (125% of the average of two independent appraisals under CGS Chapters 132 and 588l) and to negotiate with you in good faith.  If you feel your property is worth more than what has been offered, you do not have to agree but it will be up to you or your representative to bring to the attention of the state or municipal agency’s agents or employees information they may not be aware of that proves that your property is worth more. 

Q. What kind of information?

A. You can show them receipts from work you have performed since you became the owner to add to or renovate or upgrade the premises.  You can take them through the property to demonstrate that it is in good condition.  You can show them what you receive in rents and pay in expenses. You can tell them about sales in your neighborhood or town of similar property for more money.  Or you can hire your own appraiser who may be able to find other pertinent data that increases the fair market value of the property in the agency’s estimation.

Q. Should I hire a lawyer?

A. It is probably a good idea to consult with a lawyer early in the process to learn what your rights are.  You may want your lawyer to represent you in all your dealings with the state or municipality or merely act as your advisor.  You are warned that during the negotiation process oral representations and promises made by government agency representatives are not binding on the agency seeking to acquire your property.   A review by an experienced real estate lawyer of any agreements or other documents you are asked to sign is a prudent and careful course of action.   If you engage in negotiation on your own and you do not reach an agreement with the agency about the amount of compensation to be paid for the property, the agency will file papers in superior court.  At that point you are well advised to consult with a lawyer and if you believe legal assistance can be of value to you, to engage the services of the lawyer if you have not already done so.

Q. At what point does the state or municipality own my property and I receive my just compensation?

A. Title to your property will vest in the state or municipality when: (i) a statement of compensation, the government’s official offer, and deposit, a sum of money equal to the amount set forth in the statement of compensation, is filed with the court; (ii) you have been provided written notice of the court filing; and, (iii) the court has been provided evidence that the state or municipal agency has properly notified you.  At that time the clerk of the court will issue a certificate of taking to the agency which will record the certificate on the land records of the town in which your property is located.  Upon the recording of the certificate of taking, title to the property vests in the state or municipality and simultaneously your right to be paid the money deposited with the court vests.  

If the taking is made by the State of Connecticut Department of Transportation the procedure is slightly different in that the money is not deposited with the court until the clerk of the court has notified the State Comptroller and the Comptroller has obtained money to pay the property owner. If the amount exceeds $100,000 the court is required to approve the amount as reasonable before the Comptroller is notified and money is paid.  If the judge does not approve the amount, the clerk will notify the Attorney General and the Department of Transportation may, but is not required to, file an amended statement of compensation.

If you do not come to an agreement with the agency and apply to the court for a review of the agency’s statement of compensation, which is your right, after hearing and upon acceptance of the report of the judge trial referee by the court  and termination of the proceedings in a final judgment, your right to payment of the full amount determined in accordance with the court proceedings will be vested.

Q.  If I win my case, does the state or municipality have to pay interest or my lawyer’s fees?

A.  If the amount of just compensation as determined by the court is more money than was previously offered to you and deposited in the court, you will be paid interest on that portion of the award that was not previously deposited with the court, i. e., the deficiency.  A judge may set a rate of interest that is reasonable and just on the deficiency that accrues from the date of taking to the date of payment.  The rate of interest may not exceed 10% per year.  In addition, costs of court including reasonable appraiser’s fees may be awarded to you.  You are not reimbursed for any fees charged by your lawyer.    

Q.  What if I agree to sell my property to the state or municipality?

A.  If you come to an agreement with the state or municipality before court proceedings begin, the closing of the sale will occur at the time agreed between the parties. If you come to an agreement after the court proceedings begin, then your right to payment of the agreed upon price shall vest at the time appropriate amendments to the agency’s original statement of compensation have been filed with the court, accepted and any additional sum of money over the amount appearing in the original statement of compensation has been deposited in the court.   

Q.  Is the process different if only a portion of my property is taken?

A.  No.  The process remains the same but there are some different considerations in determining the fair market value of the property.  If the partial taking is so significant that it reduces the value of the remaining property then you are entitled to be paid an amount called severance, i.e., a sum equal to the loss of value to the remainder of your property, in addition to the value of the property taken.

Q. What about liens and mortgages encumbering my property?

b  Lien holders including mortgage holders are named in the filings made with the court and are notified.  They are paid from the deposit made with the court.

Q.  Do I owe taxes on the money I receive for my property?

A.  You may or may not owe federal and state income taxes.  There are different rules for different classifications of property.  An owner occupied house would be subject to different rules than a property used principally in a trade or business or held for investment purposes.  You may have to recognize a gain in the year the compensation is paid or you may be able to defer some or all of the gain by purchasing a similar kind of property with the proceeds of the acquisition or condemnation proceedings.  You are advised to seek the services of a certified public accountant or an attorney with an extensive background in income taxation.

Q. When do I stop paying the property taxes on the property taken by the state or municipality?

A.  Municipal taxes, such as the real estate property tax, will be apportioned between the property owner and the state or municipality in accordance with prevailing local practices to the date title vests in the state or municipality.

Q.  Do I have to move out right away?

A.  You can not be forced to move until replacement housing is available for occupancy.  If the Department of Transportation is the taking agency, a residential owner/occupant is usually provided 120 days rent free occupancy.  If an owner remains in occupancy beyond 120 days, he/she will pay a rental fee to the agency.  Under federal relocation regulations a residential owner can not be required to move in less than 90 days.  Under state law you may be required to pay rent commencing as early as the date title vests in the public agency.   

Q.  What relocation assistance can I count on?

A.  Connecticut General Statutes provide for relocation assistance in the event a residential owner or tenant or a business or farm is required to move.  Actual, reasonable expenses of moving will be reimbursed to the displaced residential owner or tenant or the displaced business owner or farmer.  The displaced person may elect to receive a fixed payment in lieu of actual moving expense reimbursement.  For a person displaced from a dwelling the in lieu payment may not exceed $500 and for a business or farm a sum not less than $2,500 nor more than $10,000.  In the case of displacement after October 1, 2007 because of acquisition of real property under provisions of Connecticut General Statutes Chapter 130, 132 or 588l, the maximum amount of the fixed payment in lieu of moving expense reimbursement is $20,000.  A displaced person of an owner-occupied property can also receive an additional payment not to exceed $15,000 to help obtain comparable housing.  Other displaced persons may qualify for a smaller additional payment not to exceed $4,000.  Business owners may seek reimbursement for actual losses to tangible personal property, actual reasonable expenses of searching for a new location (not to exceed $2,500), and, under federal regulations, reimbursement of expenses for reestablishing the business or farm (not to exceed $10,000).  Non-profit corporations are treated much the same as businesses and farms.  Businesses are not compensated under Connecticut or federal law for loss of goodwill or loss of profits or location.  If the project is federally funded or undertaken in accordance with CGS Chapters 130, 132 or 588l, then federal relocation assistance regulations are applied and the amounts provided are in many instances greater than amounts provided for under state law and regulations.        

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