What is the Process for North Carolina Private Party Condemnations?

In North Carolina, the power of eminent domain can be used to take private land for public use or benefit as long as "just compensation" is paid for the land taken. Pursuant to North Carolina General Statutes, § 40A-3, North Carolina has delegated its power of eminent domain to certain private third parties. Common examples include various types of utility and transportation companies like natural gas, electrical, telephone and railroad companies. In North Carolina, the process of taking private land through the use of eminent domain is called "condemnation."

The statute also sets out the required procedures for a private taking. These procedures must be strictly followed for a private taking of land to be deemed lawful. Moreover, these procedures are different from the procedures used when government entities take private land for public use. Here is a brief explanation.

Note that if your land is threatened by private-party condemnation proceedings, it would be wise to seek the legal advice and counsel of experienced and qualified North Carolina eminent domain and land use attorneys like the ones at Arnold & Smith, PLLC. You can fight the condemnation and taking of your land. At minimum, you can ensure that lawful procedures were used and that you receive the FULL and COMPLETE just compensation for your land.

Unlike other types of condemnation proceedings, for private party condemnations, there is no "quick take" mechanism. In a "quick take" condemnation, title to the private land and the right to take possession of the land transfers almost immediately to the entity condemning the land.

This is not the case with a private party condemnation. Title and the right to possession will NOT transfer until the court proceedings are finalized.

A private party condemnation proceeding is started by the filing of court papers -- a Petition -- with the Clerk of Superior Court of the county where the land is located. Gen. Stat., § 40A‐20.Under the statute, the Petition must contain a specified list of information such as:

• The names of all owners of the land
• A description of the property
• Statements of the nature of the condemning entity and its authority to seek condemnation
• A statement as to whether the owner will be permitted to remove all or specified portions of any buildings, structures, permanent improvements, etc.

Note that, because a private party condemnation is not a "quick take" procedure, the condemning entity does not need to deposit the "just compensation" with the court. Indeed, as discussed below, the question of "just compensation" is handled differently in private party condemnations.

As a practical matter, the effort to condemn the land may start before the Petition is filed when agents or employees of the private party visit the land in question. For a landowner, this may be the first "warning sign" that his or her land is threatened by condemnation by a private party. The purpose of the visit is to survey the land and make determinations as to whether the land is suitable for the intended purpose.

Prior to the filing of the Petition, there may also be efforts by the private party to purchase the land in question via a private sale. This effort is not legally required, but, as a practical matter, it can be easier and more time efficient to purchase land rather than use the condemnation proceedings.

It should be noted that a third party condemning entity can use these procedures to take less than all of a person's land and can also use the procedures to take an easement.

Once court papers are filed, the landowner must be given notice of the proceedings. Gen. Stat., § 40A‐21. Landowners can file their owner court papers -- what is called "an Answer" -- which can raise various legal challenges to the condemnation of their land including challenging the legal authority of the private party to take the land.

Initially, disputes are heard by Commissioners, not by a judge. Gen. Stat., § 40A‐25. Thus, shortly after an Answer is filed by a landowner contesting issues, the Clerk of Court will appoint three Commissioners who shall hear challenges and determine the fair market value of the property at issue. The Commissioners must take an Oath of Office and must reside in the county where the land is located. Gen. Stat. § 40A‐26. Among other actions, the Commissioners will visit and view the property in question and will hear and take evidence at various meetings that are scheduled. Eventually, the Commissioners will make a decision with respect to legal issues raised and the compensation that is to be paid for the land taken. The Commissioners prepare a written report and that is filed with the Clerk of Court. Parties can respond to the report. If matters remain disputed, then the Clerk will resolve the disputes and might take actions like requiring a new appraisal of the land and the like. Eventually, the Clerk will confirm and file a final determination.

At that point, the parties may object and take exception to the Clerk's final determination. If that happens, essentially the parties are taking the issues to the Superior Court judge assigned to the case on appeal. Notice of such an appeal must be filed within ten (10) days after the Clerk’s final determination. Gen. Stat., § 40A‐28(c). Failure to object and/or failure to file a timely appeal will make the Clerk's final determination binding. That is, if the landowner does not object and misses the deadline, the landowner is "stuck" with the results of the Clerk's final determination.

If there are no objections to the Clerk's final determination and the final determination is in favor of the private party condemning entities, then once the "just compensation" is paid, title and the right to possession transfers to the condemning entity. Gen. Stat., § 40A‐28(b).

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.