Inverse Condemnation

Property owners also have the legal right to force a condemnation, against the wishes of the government or condemning entity. This may sound strange, but there's a logic to it.

If the government or another condemning entity does something that lowers the value of an owner's property—or limits the owner's ability to use that property—that property owner can force an inverse condemnation upon the government or entity.

For example, if the city built a new expressway right next to Harry's house and the nonstop noise and congestion from the highway has lowered Harry's property value, then Harry can sue for inverse condemnation and force the city to pay him fair compensation (typically pre-expressway) for his property.

Similarly, if the government only takes a portion of a property owner's property, that property owner can sue for inverse condemnation of the remaining portion or for monetary compensation for any loss of value. For example, Martin owned a small ranch by the sea. When the state took away all of the beachfront portions of his property, the remaining portion of his property automatically lost much of its value-because its beach access was one of its best assets. So Martin can keep his remaining parcel and sue for monetary compensation for the loss in value; or he can try to force an inverse condemnation on the remaining parcel.

If you are interested in learning more about basic real estate principles, laws and procedures, please see the "Real Estate Introduction" article.

We hope that you've found our Mortgage and Real Estate Resource helpful and informative. We welcome all comments, critiques and suggestions; please send emails to [email protected]. Remember that whether your are buying a home or an office building, you are investing in real estate. As with all investments, the best investors are those who can gather the most knowledge, tools and resources. Regardless of whether you use our lending services, please spread the word about our resource center to anyone you know who may benefit from our site.

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