What is “Condemnation Blight”? Can I Recover for it if the Government Takes My Land?

Generally speaking, "condemnation blight" is the term given to physical deterioration of land, buildings and property that often occurs after the government declares its intent to take private land for public use. Generally, the blight begins to happen and continues while the process of eminent domain condemnation proceeds. Essentially, property owners that might have their land taken lose every incentive to spend money for upkeep and repairs. Further, blight occurs on lands that have been taken through the power of eminent domain. Since the government is going to raze the building and/or clear the land, the government has no desire or incentive to maintain the buildings and keep the land neat and orderly. Thus, buildings become dilapidated and parcels become filled with weeds, litter and dumped refuse and garbage.

Given that some public works projects take years to complete, condemnation blight can become quite severe and can result in a severe loss in fair market value for nearby property and for property that might be subject to the taking by eminent domain.

When the government uses the power of eminent domain to take private property for public use, the government is constitutionally required to pay "just compensation" for the land. In general, "just compensation" is defined as the fair market value. So, if the government in North Carolina takes my land, can I recover for condemnation blight as part of my just compensation?

In direct terms, the answer is "no." In North Carolina, condemnation blight is not judicially recognized as a direct form of damages when private property is taken through the power of eminent domain. See Beroth Oil Co. v. NCDOT, 725 SE 2d 651 (NC. Court of Appeals 2012), reversed for unrelated reasons, 757 SE 2d 466 (NC Supreme Court 2014). It should be noted that this is NOT the rule in other states. See, for example, West Virginia Dept. of Transportation v. Pifer, 836 SE 2d 398 (WVa. Supreme Court of Appeals, 2019) (holding that landowners may seek damages for condemnation blight as a separate element of just compensation if there has been an unreasonable delay in starting the condemnation proceeding following the official announcement of a public project and if losses are proven to have been caused by the condemning authority's actions or inactions).

However, when it occurs here in North Carolina, condemnation blight can be -- and should be -- factored into a landowner's calculation of fair market value. This is generally allowable when a landowner litigates the issue of how much the government should pay when taking private land. This is similar to how the value of lost rents can be included in the valuation determination.

For example, assume that the North Carolina Department of Transportation has declared that it will build a new 10-mile road. The NCDOT uses eminent domain to take property on the first five-mile leg of the new road. But, let's assume that the NCDOT does not yet begin construction. Indeed, let’s say, construction is delayed for several years. In the meantime, condemnation blight is occurring along the five-mile stretch that has already been taken. Let's assume the NCDOT is now renting the houses along that stretch at less-than-market rental rates. Let's further assume the properties and houses are becoming tattered and blighted though lack of upkeep and repair. Let's also assume that one property at, say, the seven-mile mark of the planned road had a fair market value of $500,000 before the NCDOT announced the road building. Now, three years into the project, that land has dropped to $300,000 in value because of the condemnation blight and market uncertainty.

In our example, when the NCDOT is ready to take this particular property, the NCDOT will argue that the value is $300,000. But, the landowner should fight that valuation. In North Carolina, landowners are not required to accept the amount that the government claims is "just compensation." In our example, the landowner should litigation the valuation issue by presenting evidence and expert valuation reports and opinions to a court that documents and takes into account the loss of value to the land that resulted from the condemnation blight.

Another option for landowners in North Carolina victimized by condemnation blight is to file a separate lawsuit for inverse condemnation. In our example, the landowner suffered three years of ongoing damage to the value of their land. That loss of value can be recovered under some circumstances if the proper legal elements are proven.

For more information, and to schedule a confidential consultation with experienced and dedicated eminent domain and condemnation attorneys in Charlotte, contact Arnold & Smith, PLLC. Use our “Contact” page or give us a call at 704-370-2828. We handle land use, zoning and condemnation legal matters in federal court, in Mecklenburg County and elsewhere in North Carolina. We have offices in Charlotte, Lake Norman, and Union County.