Losing your property to a government agency is not a situation most people ever expect to face. Yet it happens regularly across Michigan to homeowners, commercial property owners, and landowners who simply had the misfortune of owning something a government agency or utility wanted. Understanding when eminent domain can be used is the first step toward knowing what protections you actually have.
When Can Eminent Domain Be Used: The Legal Basics
Eminent domain refers to the power vested in government to take private property for public use, provided the owner receives just compensation. The authority comes directly from the Takings Clause of the Fifth Amendment to the U.S. Constitution, which states that private property shall not be taken for public use without just compensation. Michigan’s own Constitution mirrors this language and goes further in protecting property owners.
Three conditions must exist before a taking is legally valid. The taking must serve a legitimate public use, just compensation must be paid, and the property owner must be afforded due process. If any one of these conditions is absent, the taking can be challenged.
The question of who can actually exercise eminent domain is broader than many people realize. Federal and state agencies have this authority. So do cities and counties, which receive the power by delegation through state statute. In Michigan, certain public utilities (gas and power companies) can also initiate condemnation proceedings. However, they must first obtain authorization from the Michigan Public Service Commission before proceeding.
This authority is not unlimited. Under Michigan law, electric transmission lines operating at 345 kilovolts or larger require prior authorization before condemnation may proceed. The Michigan Public Service Commission reviews and approves these requests. It makes the state utility commission the decision-making body on whether the proposed taking meets the legal threshold for authorization.
Utilities operating below that threshold must still obtain appropriate authorization before proceeding. Property owners facing any utility-initiated condemnation should verify that the required approvals are in place.
What Qualifies as a Public Use
Traditional Public Use
The public use requirement sounds straightforward until you look at how courts have interpreted it over the decades. Roads, bridges, public schools, government buildings, and utility lines are the traditional examples, and they remain the clearest cases. Environmental remediation and blight elimination have also been accepted as valid public purposes.
The Hathcock Decision: Michigan Sets a National Precedent
Before the national legal space changed, Michigan produced one of the most significant eminent domain decisions in the country. In County of Wayne v. Hathcock, the Michigan Supreme Court ruled in 2004 that the transfer of private property to private parties for economic development purposes violated the Michigan Constitution.
The case arose from Wayne County’s attempt to condemn land for a private business and technology park near Detroit Metropolitan Airport. The Court rejected that taking, holding that public benefit to a private entity did not satisfy the public use requirement under Michigan’s Constitution.
That decision, which was argued and won by Alan T. Ackerman on behalf of the property owners, became a landmark in eminent domain law. Hathcock was widely followed by courts and legislatures across the country and prepared the legal and political groundwork for what came next at the national level.
Kelo v. City of New London and the National Backlash
The legal space became significantly more contested after the U.S. Supreme Court’s 2005 decision in Kelo v. City of New London. In that case, the Court upheld the condemnation of private property to facilitate a private economic development project, reasoning that economic benefit to a community could constitute a public purpose.
The property at the center of Kelo belonged to Susette Kelo. Her pink house in New London, Connecticut, became the symbol of a national movement against government overreach in condemnation. The decision drew immediate and widespread backlash.
The Supreme Court in Kelo explicitly acknowledged that its ruling established a federal constitutional floor, not a ceiling, and that individual states remained free to provide greater protections to property owners under their own constitutions and statutes. The Hathcock decision had already demonstrated that possibility, and many states cited it as the model for reform in the wake of Kelo.
Michigan’s Constitutional Protections After Kelo
Michigan responded more decisively than most states. Over 80 percent of Michigan voters approved a constitutional amendment restricting eminent domain, and the legislature enacted corresponding legislation.
Under Michigan’s Constitution as it stands today, the transfer of private property to a private entity for economic development or to enhance tax revenue does not qualify as a public use. A taking premised on that rationale is not legally permissible in Michigan.
Burden of Proof on the Government for the Right to Take in Michigan
It is also important to understand that the government bears the burden of proof when seeking to exercise eminent domain in Michigan. In a condemnation action, the condemning authority must demonstrate by a preponderance of the evidence that the proposed taking serves a public use.
When the taking is based on blight eradication, the standard is higher, requiring clear and convincing evidence to support the government’s right to take the property.
The Types of Takings Property Owners Face
Not every eminent domain action involves the government taking an entire property outright. Takings come in several forms, and the differences matter significantly when calculating the compensation owed.
- Total taking: The condemning agency acquires the entire parcel. Compensation is measured based on the fair market value of the property at its highest and best use.
- Partial taking: A portion of the property is acquired. For example, a strip of land for road widening or an easement for utility lines. Compensation must account not only for the land taken but also for any resulting decline in the value of what remains.
- Temporary taking: The government occupies or uses property for a defined period, typically during construction. Compensation generally reflects the rental value of the affected land during that period.
- Regulatory taking: This occurs when a government regulation severely restricts a property’s use, amounting to a taking even without a formal condemnation proceeding. The property owner may have grounds to pursue an inverse condemnation claim.
Federal Eminent Domain Proceedings
Federal cases involve a distinct procedural framework, and the stakes are often significant. Federal agencies may initiate condemnation proceedings under federal authority.
The procedural rules differ from those in state condemnation actions, and valuation disputes can be highly technical. Property owners facing federal condemnation proceedings need counsel familiar with the specific rules and standards that apply in that context.
What the Government Is Required to Pay
Just compensation under Michigan law is calculated based on the property’s fair market value as of the date of taking. Fair market value is the price at which a willing buyer and a willing seller would agree under normal market conditions.
For partial takings, the correct measure is the difference between the fair market value of the entire parcel before the taking and the fair market value of the remaining parcel after the taking. This distinction matters enormously in practice because initial government offers frequently understate severance damages or ignore them altogether.
Michigan law also provides that property owners are entitled to reimbursement of reasonable attorney fees and expert and appraisal costs in condemnation proceedings. If your principal residence is the subject of a taking, the Michigan Constitution mandates that compensation be no less than 125 percent of fair market value.
Your Right to Challenge Is Time-Limited
Property owners can contest both the legal basis for a taking and the amount of compensation offered. A taking can potentially be stopped if it does not meet the requirements for public necessity or public use. More commonly, the challenge focuses on the compensation figure. This involves pushing back against an inadequate offer and making sure the full scope of damages is properly accounted for.
The window to contest the right to take is narrow. From the date the condemnation complaint is served, property owners have a limited time to raise a legal challenge. Waiting too long forfeits important options.
Understanding Your Position Before a Condemnation Proceeding Goes Further
Eminent domain proceedings move on the government’s timeline, not yours. The offers come in, deadlines attach, and property owners who engage late often find themselves with fewer options than those who move quickly.
At Ackerman & Ackerman, we represent property owners in eminent domain and condemnation proceedings across Michigan. Contact us before accepting any offer or signing anything if a government agency or utility has approached you about a taking.
