Eminent domain is the government’s power to take real property for the benefit of the public, in exchange for just compensation. It’s often called condemnation. Church property is not exempt from eminent domain, and churches facing it need to understand how the process actually works before they respond to a government offer.
What “Taking” Actually Means
Eminent domain is the actual taking of property, usually on a permanent basis — the government’s removal of physical possession of real property from its owner. But even when the government doesn’t physically take possession, it may impose restrictions on the property’s use severe enough to constitute a temporary or regulatory taking. Either way, that taking requires just compensation to the owner.
Inverse Condemnation
Rather than the government initiating a taking through eminent domain, inverse condemnation is when the property owner forces the issue — usually through litigation, alleging that a taking has already occurred and seeking compensation for it. This can happen when a government agency uses its eminent domain power to take only part of a property. Imagine a portion of a church’s parking lot condemned for a freeway widening project: if the remaining spaces leave the church unable to legally function, that’s a taking of practical value even though most of the parcel remains.
A regulatory taking is similar but doesn’t require any physical taking at all — it occurs when a government agency forbids church use of a property, or forbids building on it entirely, leaving the property with little to no value for its intended purpose.
Just Compensation and Fair Market Value
This is where most of the real disputes happen. Just compensation is measured by the property’s fair market value at the time of the taking — the amount a willing buyer would pay in cash to a willing seller for the property’s highest and best use, without factoring in any sentimental or subjective value. California defines fair market value in Code of Civil Procedure §1263.320:
“The highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obligated to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available.”
Why Church Eminent Domain Appraisals Are a Battle
Appraisers on opposing sides of an eminent domain case usually land in the same ballpark. Church property is the exception. In Redevelopment Agency of the City of Long Beach v. First Christian Church of Long Beach (1983) 140 Cal.App.3d 690, a California Court of Appeal was asked to value a church facility the city sought to acquire through eminent domain.
The city’s appraiser valued the property at roughly $1,000,000, applying a 75% depreciation factor on the basis that the only comparable church sale in the area had gone for close to bare land value. The church’s own appraiser valued the same property at $4.6 million, using a much lower depreciation factor of roughly 40% based on the building’s actual replacement cost. The court ultimately found a fair value of $3,000,000.
“The ultimate goal in any eminent domain proceeding is of course to determine constitutionally required ‘just compensation.’ That compensation is to be measured by what the owner lost and not what the condemnor has gained… The economic reality of course is that certain types of buildings such as churches are not, as such, regularly bought and sold in the commercial market, and to ordinary buyers of real estate have no greater value than the use which can be made of the land free of the building.”
The court’s point matters for any church facing eminent domain: standard market-comparison appraisals often understate a church’s real value, because there simply aren’t enough comparable church sales to rely on. Replacement-cost approaches, which value what it would actually cost to rebuild the structure, tend to provide a more accurate and equitable result for special-use buildings like churches.
What to Do If Your Church Is Approached
Seek proper legal advice before you act. When a government agency — or more likely, its real estate agent — approaches your church with an offer to purchase, know your rights first. Understanding the condemnation procedure, and what your church is actually entitled to, is essential. Beyond just compensation for the land itself, relocation costs, fixtures, and equipment should all be part of the conversation.
It’s strongly advised that a property owner avoid meeting with the government’s agent, and avoid signing anything, until an attorney has been consulted. A meeting or signature can start the legal process clock, including the government’s adoption of a “Resolution of Necessity” — a step that can authorize the taking of the property, with just compensation settled afterward in court.
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Disclaimer: Every situation is different and particular facts may vary thereby changing or altering a possible course of action or conclusion. The information contained herein is intended to be general in nature as laws vary between federal, state, counties, and municipalities and therefore may not apply to any given matter. This information is not intended to be legal advice or relied upon as a legal opinion, course of action, accounting, tax or other professional service. You should consult the proper legal or professional advisor knowledgeable in the area that pertains to your particular situation.
