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What exactly is a regulatory taking?

From time to time, government agencies and private parties alike will approach individuals who own sizeable parcels of land to let them know of their interest in taking ownership of it. Both parties generally offer in-kind compensation for the property that they are looking to buy. This is where the similarities in approaches end, however.

The Fifth Amendment of the Constitution of the United States authorizes government agencies to seize parcels from landowners even if they are not interested in giving the land up. The amendment stipulates that the landowner must in return receive "just compensation," i.e., its fair market or an appraised value for it.

Yet, it is possible for the government not to have to compensate a landowner at all for their property.

In the Supreme Court case, Agins v. City of Tiburon, 447 U.S. 255 (1980), justices ruled that the government could swoop in and take someone else's private property without compensating them for it. They would need to have "legitimate governmental interests" to do so. They had to make sure that the landowner could still enjoy an "economically viable" use of their land even after they took it.

Government agencies have historically employed the use of eminent domain when their use of a particular parcel of land is critical to preserving national security or to exploit natural resources, improve infrastructure such as highways or more. Still, the seizure of property for certain in the case with regulatory taking can be unlawful.

The Supreme Court has a four-step test to aid judges in determining if a taking is legitimate. A judge could consider a taking to be unlawful if it involves the government agency assuming permanent physical occupation of it or if they deprive the original owner of their economically beneficial use of the land. It may also be considered unlawful if the site's developer fails to financially offset the project's impact.

Regulatory actions should not limit the economic expectations that a landowner has for their land parcel. If it does, then they may be eligible for compensatory damages. An attorney can advise you of whether the seizure or purchase of your property violated the law. If they determine that this is the case, they will inform you about the legal remedies available to you.

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