As real estate agents, we rarely listen until it potentially affects us. Eminent domains are non-traded and are not part of an agent’s day-to-day work, a “complex legal matter” handled by lawyers on behalf of property owners.
However, for private property owners whose homes or land are being repossessed, or trusted real estate professionals whose advice is sought, a thorough understanding of the prominent areas is essential.
5 questions answered about prominent domains
1. Where did the concept of eminent domains come from?
Eminent territory is the government’s power to take private residences and businesses for public use. This is addressed at the end of the Fifth Amendment to the U.S. Constitution, which states:
No person shall be required to plead to a felony or other notorious crime unless presented by a grand jury or indicted. However, this excludes incidents occurring in the army, navy, or militia on active duty in times of war or public danger. Furthermore, no person shall be twice exposed to danger of life or limb for the same crime. Furthermore, no person shall be forced to testify against himself in any criminal case or be deprived of life, liberty, or property without due process of law. Nor shall private property be taken for public use without just compensation.
Here, this provision imposes two important restrictions on the acquisition of private property.
Use must be public; Just compensation must be paid to the property owner.
2. Restrictions seem very simple. How were private interests involved?
In 1954, the Supreme Court decision in Berman v. Parker, an urban redevelopment case in Washington, D.C., opened a Pandora’s box by reinterpreting “public use” as “public purpose.” State courts began to uphold “virtually any use of eminent territory, even by private parties.”
Urban decline and “blight” became buzzwords and excuses for using eminent domains to take private property from one person and transfer it to another person or entity for economic gain. Redevelopment was driven by the ridiculous epidemic definition of just “two bedrooms, one bathroom,” “no garage,” and “vacant lot.” Abuse flourished and expanded.
To combat government overreach, the Institute for Justice, a nonprofit law firm, and its advocacy team provide free legal representation to individuals and help foster grassroots efforts to hold government officials accountable. IJ argued 13 cases before the U.S. Supreme Court. The most widely publicized ones involve private property rights.
Among them was Susette Kelo’s “Little Pink House,” which was memorialized in a film of the same name based on the 2005 Kelo v. City of New London case. In this case, the city ruled that redevelopment was a public use, and Kelo was evicted from his home, but his home was demolished and relocated as the neighborhood was demolished.
Supreme Court Justice Sandra Day O’Connor wrote in her dissent in the case, which ruled in favor of the city.
“The specter of condemnation hangs over all properties. There’s nothing stopping the state from replacing a Motel 6 with a Ritz-Carlton, or a house with a shopping mall, or a farm with a factory.”
3. What impact can prominent domains have on real estate agents?
Real estate agents can be held liable on both the seller and buyer side if they fail to disclose upcoming cases of prominent domains or fail to complete thorough due diligence.
When Joan and Mark Handel returned to New England in 2023, they found land along the Cape Cod Canal to build their dream home. They received a letter of condemnation soon after they moved in. The Wall Street Journal reported that the couple felt blindsided by the possibility and were furious that no one, including their real estate agent, had warned them.
A representative for the buyer, who is not a member of the National Association of Realtors, did not respond to the Journal’s request for comment, but the listing agent for the property, Amanda Lucido Hodges, told the Journal: “Before the Handels purchased the property in 2023, we notified the buyer’s agent of the potential risks and verified that the buyer’s agent communicated them.”
Longtime Cape residents said they knew the bridge was deemed “functionally obsolete” in 2020, long before the Handels began surveying the area. The Handels told the Journal they blame the real estate agent and home seller and plan to take legal action.
What if everyone involved knew what was going on off-site using public records before listing or selling a property? Agents and sellers are required under the Massachusetts Consumer Protection Regulations to disclose to buyers “facts whose disclosure may have influenced the buyer not to proceed with the transaction.”
4. How can real estate agents make a difference?
First, here are some terms you should be familiar with, taken from IJ’s Eminent Domain Survival Guide and Glossary.
Condemnation: The eminent domain process of acquiring property for public use Good faith offers and negotiations: In some states, government offers to purchase pre-condemned property are based on an appraisal. Offers that may be considered negotiable Just compensation: Value of the property plus relocation costs Redevelopment/economic development: Removal/replacement of existing property
In a well-known field, the buyer, the city, wants to buy low, while the seller, the property owner, wants to sell high. In some cases, you may not want to sell at all. When assisting former clients facing property foreclosure, all you need is someone already skilled in the following areas:
Property Values: CMA provides real-time data to evaluate properties that are “pending” versus “closed” sales Negotiations: “Pre-abatement” assistance to counter city “good faith offers” Relocation: Representing buyers to find “replacement” housing in desired locations Due Diligence: Review and disclosure of public projects through public records available in 50 states
If you want to help homeowners dealing with high-profile domain disputes, your expertise is valuable in:
Identify micro-markets and local trends in the area where the occupied property is located Describe the characteristics of the property that would be in high demand if sold on the open market Provide a CMA of the estimated value of the property Help homeowners contest city proposals for pending sales at market value rather than exit price
Education, resources, and knowing the “stakeholders” in the local area will help clients when they are faced with critical real estate domain issues.
5. Who else can help in the battle for prominent domains?
As experts at the local level, attorneys are important advocates for just compensation, serve as a buffer for property owners against government agencies, and handle local litigation.
Nonprofit attorneys with fair housing and renowned field expertise, like the Institute for Justice, often work with local attorneys to hold authorities accountable. At every level, IJ provides free representation to property owners.
Finally, the appraiser acts as an expert witness and establishes a “pre-project” value of just compensation for the home and excess land, testifying in depositions, hearings, and trials.
Opportunities come from doing the right thing
Some agents believe that prominent areas are outside their scope and are too difficult to intervene. There are many moving parts, and fighting in the eminent realm requires the qualities of agents who have the “heart and drive” and dedicate their time to the “human element” to help those who are suffering.
In our daily dealings, we do the right thing. Away from the everyday, the eminent realm gives us another moment to do the right thing. Opportunity will always find you.
Annette DeCicco is a real estate broker and growth development director for Berkshire Hathaway HomeServices Jordan Baris Realty in northern New Jersey. Connect with her on LinkedIn and Instagram.
