Wednesday, May 28, 2014

The Takings Clause: Takings vs. Regulations

If you're given a question on the Takings Clause, an issue you're likely to analyze is whether the government is required to compensate a landowner. This will depend entirely upon whether the act of the government is deemed to be a taking or merely a regulation. It should be noted that this analysis is the same for both the federal government (as per the 5th Amendment), and the state government (as per the 14th Amendment).

The key point here is that the government need not pay compensation for regulating property, but it must compensate an owner of property if the government takes the private property of the landowner for purposes of use by the public. The easy case is where an actual appropriation takes place. If there is an actual appropriation or a permanent physical invasion of another's property by the government, then there is a taking and compensation must be paid. The one exception to look out for here is if there is an emergency requiring the appropriation of property; in that case compensation will be less likely.

If the government permanently denies a landowner of all economic use of his land, that is equivalent to a physical appropriation of the land and as per the above should be deemed a taking. A classic example here is where the the state passes a zoning ordinance after a landowner has acquired the land and the ordinance effectively removes the landowner's ability to benefit monetarily from the property.

If, on the other hand, the government only temporarily denies the landowner of all economic use of his land, the case for a taking is far less certain. The Court will examine relevant factors (for example, the length of the delay, the degree of harm to the landowner, etc.) in order to determine whether fairness and justice require the landowner to compensate the landowner. It's a balance and the analysis should balance relevant factors.

One last potential angle is where an act by the government merely decreases the value of a landowner's property but does not either permanently or temporarily deny a landowner of all economic value of his land. This is nearly always deemed a regulation rather than a taking provided the landowner is left with an economically viable use of the property.

If you've determined that the government has acted in a way that qualifies as a taking, you must then determine the appropriate remedy for the landowner. There are two possibilities here: the government will either be required to pay the property owner compensation (measured by the reasonable value of the property at the time of the taking), or terminate the act immediately and pay the landowner for any damages that have occurred while the government was acting in a way that burdened the landowner.

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