Under eminent domain laws, which emanate from the Takings Clause of the Fifth Amendment to the Constitution, private property cannot be seized by the government for public use “without just compensation.” However, there are times when landowners don’t receive compensation. It’s called inverse condemnation.
That occurs when the government denies that the landowner’s property has been taken. How is it able to do that? Let’s look at some examples.
The government could create something that denies the landowner the use and enjoyment of their property. That could involve something such as obstructing water flow to the landowner’s property, obstructing access or creating something noisy, such as an airstrip. Local governments also could pass an ordinance that could deprive the landowner of rights.
Consider the property owner who owns 10 acres of land and intends to subdivide it into 1-acre parcels for custom homes. If the local government passes a law that states that single-family homes must be on lots no less than five acres, the landowner is denied the right to maximize profits.
The government could pass a law, for example, that makes nightclubs illegal, forcing all nightclubs to shut down. The government could contend that nightclubs are dangerous for the public and argue their action is for public safety and they haven’t taken anything from the owner.
In these examples, the government hasn’t taken any physical property, but the rights to use and enjoy the property have been severely limited. A landowner can fight that through an inverse condemnation claim. Owners have the right to seek that “just compensation” that our forefathers promised.