Michigan Eminent Domain Laws can be found in Chapter 213 of Michigan Laws. The Fifth Amendment to the U.S. Constitution states that private property should not be taken for public use, without just compensation[i].
The Michigan Constitution provides that private property should not be taken for public use without just compensation being first made or secured in a manner prescribed by law[ii]. Also, compensation should be determined in proceedings in a court of record.
Besides these constitutional requirements for the taking of property by eminent domain, Michigan has adopted the Uniform Condemnation Procedures Act (“UCPA”). The UCPA provides standards for an agency’s acquisition of land, the conducting of condemnation actions, and the determination of just compensation.
Pursuant to MCLS § 213.23, any public corporation or state agency is authorized to take private property necessary for a public improvement or for the purposes of its incorporation or for public use and to institute and prosecute proceedings for that purpose.
MCLS § 213.52 provides that if property is to be acquired by an agency through the exercise of its power of eminent domain, the agency should commence a condemnation action for that purpose.
Proceedings may be commenced and prosecuted whenever a public corporation or state agency have declared a public improvement or the purposes of its incorporation or public purposes within the scope of its powers make it necessary, and should declare that it deems it necessary to take private property for such public improvement or for the purposes of its incorporation or for the public purposes within the scope of its powers, designating the same, and that the improvement is for the use or benefit of the public[iii].
In Michigan, both the federal and state governments, including their respective agencies have the power of eminent domain. Cities and counties have also been delegated the authority or power of eminent domain by statute.
All entities exercising the power must be acting on behalf of the public when using the power of eminent domain. Public utilities, such as gas and power companies, may also condemn property in Michigan. However, public utilities must typically receive authorization from a state or federal board or commission before condemnation proceedings may begin.
Before initiating negotiations for the purchase of property, the agency should establish an amount that it believes to be just compensation for the property and promptly should submit to the owner a good faith written offer to acquire the property for the full amount so established[iv]. At the same time, if the taking of the property might require relocation, the agency should provide written notice to the occupants of the property.
The agency may make payment of a part of the compensation agreed upon, or enter into a contract to pay in the future based upon an agreed method of determining the compensation[v].
Just compensation is determined based on the market value of the property at its highest and best use. Market value is the highest price the property would bring if exposed for sale on the open market, with a reasonable time allowed to find a purchaser with knowledge of all of the uses and purposes to which it is adapted and for which it is capable of being used.
The highest and best use means the most profitable and advantageous use the owner may make of the property even if the property is presently used for a different purpose or is vacant, so long as there is a market demand for such use.
MCLS § 213.55 provides that in addition to other allegations permitted or required by law, the complaint must include:
- A plan showing the property to be taken;
- A statement of the purpose for which the property is being taken;
- The name of each known owner of the property being taken;
- A statement setting forth the time within which the defendants may contest the right of the condemning agency to take the property;
- The amount that will be paid and to whom it will be paid if there is a default;
- The arrangements which have been made regarding the escrow of the good faith compensation; and
- A declaration of taking describing the property to be taken, whether fluid or mineral rights are included and the sum of money estimated by the agency to be just compensation for each parcel of property being acquired.
Once the case has been filed, it will follow the procedure of other civil cases in the jurisdiction. There is usually a first hearing on compensation which is set at the time the complaint is filed. At the first hearing the government agency may:
- enter a default against any parties who have not appeared or answered the complaint,
- deposit the good faith compensation with the court or enter an order compelling payment of the compensation to the property owner and
- set deadlines for the exchange of appraisals and other deadlines.
Unless a motion to review the necessity of the taking is filed, the court orders the escrowee to pay the just compensation. The good faith compensation check is made payable to all parties with an interest in the property.
Additionally, property owners are entitled to reimbursement of expert fees and attorney fees in condemnation cases.
[i] USCS Const. Amend. 5.
[ii] MCLS Const. Art. X, § 2.
[iii] MCLS § 213.24.
[iv] MCLS § 213.55.
[v] MCLS § 213.69.