What to Do When a Real Estate Developer Wants Your Home

It was a classic David versus Goliath story. Republican Presidential candidate Donald Trump opened the Taj Mahal casino in Atlantic City in 1990. He had grand plans for his casino and wanted to park his limousines next door, but the house next door was owned by an elderly widow, Vera Coking, who had been living in the house since 1961. It was where she raised her children and created her “dream home.” Needless to say, it had great sentimental value to her. When Trump tried to buy her house, she refused. He even tried to butter her up with Neil Diamond tickets to get a cheaper price on her house. It didn’t work.

In May 1994, Coking got a letter from Atlantic City’s Casino Reinvestment Development Authority offering her $250,000 for her home and threatening to use eminent domain if she did not accept the deal. Undeterred, Coking fought back. In 1998, the Superior Court of New Jersey ruled that Trump and the casino authority could not use eminent domain to take Coking’s house to give to Trump. It was a huge win for the “little guy.”

These kinds of stories are common. If it happens to you, it is important to know what’s legal and how to exercise your rights.

Can the Government Use Eminent Domain to Acquire My Property?

If you are anything like Vera Coking, you may have an emotional attachment to your home and you can’t imagine leaving, no matter the offer amount. If this is your case and you want to fight, the government may try to use “eminent domain” to acquire your property. 

Historically, eminent domain could only be used for public purposes, which the courts interpreted very broadly. Increasingly, local governments can seize your land for private use if they can prove that doing so will serve what is considered the “public good.” Cities across the country have used eminent domain to force people off their land so that private developers can build residential and commercial properties.

If the government successfully uses eminent domain to acquire your property, they must pay you “just compensation.” The courts interpret this as fair market value, and the fair market value is assigned by an independent appraiser.

Challenging Eminent Domain

Challenging the right to take your property is the only way to prevent the taking from occurring. A successful challenge depends upon the public use test. If the government cannot demonstrate an adequate public purpose for the taking, their request for eminent domain will fail. You must demonstrate that the use of eminent domain serves only private interests. Speaking to an experienced real estate attorney is essential in representing your interests.

Consider Other Options

If you have no problem selling your property to a developer, you should consult a licensed real estate agent in your area. Real estate agents study market trends and will better estimate the fair market value of your home. They can also help negotiate the best deal for your sale. Developers try to get a good price on your home and will often use a seller’s lack of knowledge and sophistication about the real estate market to their advantage. In that regard, you may also consider hiring your owner appraiser.

Another tactic is to hold out until the developer offers you more money. If you elect to use this tactic, you should proceed with caution – a developer could decide to use eminent domain to acquire your property, and you may be paid less for your property than the developer offered.