THE INTRODUCTORY STAGE
In the beginning, the Property Owner should identify “the who” of the acquisition process. Who is the actual entity interested in acquiring the property? Who is the governing authority that may delegate its powers of Eminent Domain? Who is the “negotiating” company that has been retained by either the developer or the governing authority?
THE SURVEY STAGE
Next, “the what” needs to be determined. What property and what property rights does the authority want? To answer this important question, the governing authority may desire to survey the property prior to an offer being made to the Property Owner. “Pre-Condemnation” surveying has been long permitted See, State ex. rel. Rhodes v. Crouch 621 S.W. 2d 47 (Mo. banc 1981).
But, even surveys have boundaries. Missouri law does not permit the downing of trees or environmental borings on the properties. See, Pogue v. Associated Elec. Corp, Inc. 760 S.W. 2d 169, (Mo. Ct. App. S.D. 1988) and Missouri Highway and Transportation Commission v. Eilers, 729 S.W.2d 471 (Mo. Ct. App. W.D. 1987), respectively.
THE PAYMENT NEGOTIATION STAGE
The condemning authority is required by law to make a good faith offer to purchase the property prior to filing suit to acquire the property through the exercise of eminent domain power. See R.S.Mo. 523.265. The “how much” has to consider not only the “purchase price” for the Real Estate, but also all Relocation Benefits to which the Property Owner may be entitled. The purchase price is to be based on an appraisal made by a state-licensed or state-certified appraiser using generally accepted appraisal practices. “Relocation Benefits” are monies and services to which a Property Owner is entitled if he/she has to move to a new location, in whole or in part. Most developers and even some condemning authorities ignore or, at best, attempt to lump Relocation Benefits into the purchase offer.
THE CLOSING DATE AND VACATION DATE NEGOTIATION STAGE
“The when” is seemingly a lifelong question, and it perplexes most. Neither the authority nor the developer may be able to speak with certainty about a Real Estate Closing Date. But, the authority, through the investigation of its Relocation Benefits specialist, should be aware of all the needs of a Property Owner in relocating to a new site, including the need for time to build a replacement site. “Turn Key Operations” are usually desired in a commercial move; “Double moves” may be necessary to accomplish a reduction in business interruption. Suffice this checkpoint to say: the “vacation date” can be negotiated at the Purchase Contract stage or via a Writ of Possession and through Extension of Possession Agreements.
The “Salvage rights” of the fixtures in the property should provide for in the Real Estate Purchase Contract. Usually the developer has no use for any of the objects (real or personal property) on the acquired property and, therefore, is delighted to permit the removal of anything and everything.
THE “MEDIATON” STAGE
Assuming that the “Real Estate Purchase Contract” is not accepted, an alternative for the developer and the property may be “mediation”. But, be wary: not all mediations are alike. Some governing entities offer “mediation” that involves a non-independent third party who is not certified as a mediator. Other condemning authorities offer “mediation” with a certified mediator who is on “the authorities list” and paid by the authority. True mediation may be more helpful to both parties.
CONDEMNATION PETITION STAGE
If negotiations fail, a lawsuit may be filed by way of a Condemnation Petition, which must be carefully prepared and carefully reviewed for technical accuracy, i.e. it’s back to “the what” and “the who”.
Condemnors must correctly identify the property being taken and be sure to the name all the parties claiming an interest in any or all of the property being acquired or affected. It is imperative to not only name the parties, but get them served, which may include a 3 week publication series. If the authority fails here, clear title may not be conveyed or an outstanding interest may have an inverse Condemnation action.
If an entity is unknown, e.g. the unknown successor to a bank, or if a known person has an unknown address, then the condemnor should request the appointment of an Attorney for the Unknown (a/k/a a Guardian at litem in some Courts).
THE CONDEMNATION HEARING STAGE
Under Eminent Domain Law, Property Owners' Attorneys should insist on all the proof of:
- authority
- necessity
- public use
- good faith offers
These hearings are a fertile ground for Property Owners to inquire of the governing authority that is forcefully acquiring their residential or commercial Real Estate and selling it off to another commercial entity.
THE COMMISSIONERS’ VIEWING AND HEARING STAGE
If an Order of Condemnation is entered, the Court will appoint 3 disinterested Commissioners, who must be residents of the county in which the property lies (at least in part), to assess damages, if any, that were caused to the property as a result of the taking.
Once the Commissioners’ view the Real Estate and hear evidence from all sides, the Commissioners file a Report of Commissioners, which reflects their Award for each property that was condemned in the Condemnation Petition.
THE FILING OF THE COMMISSIONERS’ REPORT STAGE
Pursuant to Section 523.040(1), when the Report of Commissioners is filed, then the Circuit Clerk is to immediately forward the report to the Recorder of Deeds for recording. The Clerk is also for forward a “Notice of Commissioners’ Report and Award” to each party and to the “Attorney for the Unknown”.
In reviewing the “Commissioners’ Report and Award”, remember that Section 523.020 Mo. Rev. Stat. (2006) allows the condemnor to condemn several different properties in the same Condemnation Petition, and each property is entitled to a separate award. Be careful to identify the award for your Real Estate.
THE FILING OF EXCEPTIONS STAGE
If the amount of the award is not acceptable, Exceptions to the Commissioners’ Award must be filed within 30 days of the receipt of the Notice of Filing of Commissioners’ Report or the Property Owner will lose the right to further challenge the amount of the award.
If the condemning authority is displeased with the Commissioners’ Award it can, within 30 days of the date of the filing of the award, elect in writing to abandon the Condemnation, or the condemnor may also file Exceptions.
If and when the condemning authority pays the Commissioners’ Award into Court, the Circuit Clerk is to forward another notice entitled “Notice of Payment of Commissioners’ Award” to all parties. Once Notice is received, each party has the right to have the monies and not waive their rights to a jury trial on the issue of value, i.e. the Trial of Exceptions.
THE MOTION FOR DISTRIBUTION STAGE
Distribution of the monies can only occur one of three ways: (1) a Judge‘s sua sponte determination of distribution provided no parties proceed toward distribution within 90 days of the filing of the Notice of Payment of Commissioners’ Award.; (2) by consent of all parties named as having an interest in the property; or (3) by a Hearing on a Motion for Distribution.
Whether by consent or by Motion, the distribution will not be made to a party who is not properly joined in the lawsuit. Thus it is important for the Property Owner to review the list of named Defendants for accuracy as time may be of the essence in getting payments made to certain lending institutions.
Regardless of the form by which distribution occurs, the distribution must be done in a percentage format in accordance with Section 523.053(1) Mo. Rev. Stat.
The percentages which are determined by the court are final and appealable. Therefore, any aggrieved party must file a timely appeal or lose the right to challenge the percentages in the future Trial of Exceptions.
THE TRIAL ON THE EXCEPTIONS
The distribution of the Commissioners’ Award to a party is not the final payment of monies if the matter proceeds to the Trial of Exceptions. Property Owners should be informed of the 6% interest provision of Section 523.045 Mo. Rev. Stat. (2006) wherein if additional monies are to be paid to the Property Owner, then 6% interest attaches to the payment from the date that the Report of Commissioners was filed. Likewise, if monies have to be paid back to the condemning authority, the 6% interest also attaches to that payment. The Jury at the Trial on the Exceptions will not be aware of the Commissioners’ Award.
Should you desire The Gilroy Law Firm’s legal advice and assistance with regard to your Eminent Domain case, we look forward to your telephone call to schedule a Working Meeting with our firm.
To speak with an experienced St. Louis Eminent Domain Lawyer, call The Gilroy Law Firm at 314-965-3536, or use our quick contact web form.