Legal Intelligencer article by Lamb McErlane PC attorneys James C. Sargent, Jr. and Katherine E. LaDow.*

1. The Eminent Domain Code

Pennsylvania’s Eminent Domain Code, 26 Pa.C.S.A. § 101, et seq., (“the Code”) codifies one of the most extraordinary and ominous powers of government––the right to condemn or, more simply, “take” private property by filing a declaration of taking under the Code, which results in immediate transfer of legal title to the property to the government.[1]  While there is a process for judicial review of government condemnation, Pennsylvania’s Commonwealth Court has made it very clear that the review is limited. A court has “no power to substitute [its] discretion for that of the [condemning entity], nor to correct mistakes in judgment. It is presumed that the officials have performed their duties in good faith….” Swartz v. Pittsburgh Public Parking Authority, 439 A.2d 1254, 156 (Pa. Cmwlth. 1981). Where the governmental taking is not challenged, the issue then becomes the process for establishing just compensation which is set forth in § 703 of the Code.  This article is the first in a series providing a general overview of the eminent domain process and the procedures set in motion when a declaration of taking is filed.

2. The Declaration of Taking

To qualify as a proper exercise of the power of eminent domain, a declaration of taking (“declaration”)  must be filed at the direction of the governing body of a governmental entity with the power of eminent domain  (for example, PennDOT, the Turnpike Commission, public utilities, local municipalities and school districts),[2] a political subdivision (for example, a municipality or school district, or a duly constituted authority), or a public utility granted condemnation power by the Pennsylvania Public Utility Commission (for example, PECO or AQUA).[3]  The form of the declaration is the same for all condemnations, however the procedures that apply may vary. The authorizing acts of the condemning authority is critical.  The act must be well-documented, based on appropriate deliberation and consideration of alternatives (if any exist), clearly necessary, and consistent with the purposes and needs of the condemnor.  A bond may be required depending on whether or not the condemnor has the power to tax. The declaration must be filed with the court of common pleas in the county where the condemned property is located. The declaration may be served on the property owner (“condemnee”) by registered mail, by the Sheriff’s Office in the county in which the property is located, or, if service cannot be made by these means, through posting and publication or by agreement with the condemnee. See 26 Pa.C.S.A. § 305.

3. Title vs. Possession

As a matter of law, immediately upon filing of the declaration, title to the property condemned vests in the condemnor, regardless of whether the condemnor has possession of the property. Because title transfers immediately upon filing the declaration, on the date the declaration is filed, the condemnor has standing to submit zoning or land development applications to the municipality in which the property is located, if necessary, even though the condemnor may not take possession of the property for years. In some circumstances, this can mitigate the impacts to the condemnee (and any of the condemnee’s tenants), who may be able to continue possessing the property pending municipal approvals and make arrangements to relocate.

Generally, the condemnor is able to obtain possession of the condemned property only if it pays, or offers to pay, estimated just compensation (“EJC”) to the condemnee/former property owner. If the condemnee files preliminary objections within 30 days of the declaration,[4] that normally will suspend the condemnor’s right to seek possession, but only while preliminary objections are pending in the trial court, not if the preliminary objections have been overruled and the condemnee appeals. In re Condemnation No. 2 by Commonwealth ex rel. Dept. of General Services, 943 A.2d 997 (Pa. Cmwlth.  2007), cert. denied, 129 S. Ct. 732, 555 U.S. 1070 (2008). Conversely, if the condemnee files preliminary objections, tender of possession is likely to be found ineffectual during their pendency. See, e.g., Lancaster Airport Authority v. Wickersham Props., Inc., 48 Pa. D. & C.3d 450 (C.P. 1987).        

4. Right of Entry

Even before the filing of a declaration, the condemnor may enter upon the property or improvements to be condemned “in order to make studies, surveys, tests, soundings and appraisals.” 26 Pa.C.S.A. § 309.

5. Condemnee’s Continued Possession

During the pendency of preliminary objections, possession of the condemned property normally will remain with the condemnee. Even if the condemnee demands that the condemnor pay EJC and take possession of the property, as long as preliminary objections are pending, that demand is likely to be unsuccessful. See, e.g., Wickersham Properties, Inc., 48 Pa. D. & C.3d 450 (C.P. 1987) (possession/payment of EJC not required until after preliminary objections have been decided).  Assuming no preliminary objections have been filed, under § 307 of the Code, if EJC has not been paid after the 60^th day following the declaration, the condemnee has a right to tender possession and to compel the condemnor to pay EJC. As long as the condemnee remains in possession, he/she/it must pay real estate taxes on the property.

6. Tender of Possession by the Condemnee

If the condemnor has not yet paid EJC on the 60^th day after the declaration was filed, and assuming no preliminary objections have been interposed, the condemnee may tender possession. The condemnor then is obligated to take possession and pay EJC. See 26 Pa.C.S.A. § 307(b). This is an important point of inflexion. Under § 308 of the Code, a condemnor is entitled to withdraw its declaration and return legal title to the condemnee for up to two years after filing the declaration, so long as the condemnor has not paid EJC or the condemnee has not tendered possession. Under Wickersham, supra, preliminary objections create a hiatus within this two-year period during which the condemnor may decide to withdraw its declaration; the condemnor may be able to revoke the condemnation even if the condemnee has purported to tender possession so long as preliminary objections are pending at the time of the tender.[5]

7. Condemnor’s Right to Possession

Upon the expiration of 30 days after the declaration, if no preliminary objections are filed, or once preliminary objections are overruled, the condemnor is entitled to possession of the condemned property upon payment of EJC. 26 Pa.C.S.A. § 307. EJC is the value of the Property that the condemnor reasonably believes to be fair based on appraisals by one or more professional valuation experts. If the condemnee refuses to permit the condemnor to take possession, the court is empowered to issue a writ of possession, compelling the condemnee to turn over the condemned property to the condemnor. Id.

As previously discussed, a condemnor is under no immediate obligation to take possession of the condemnee’s property or pay EJC, absent a tender of possession by the condemnee.

8. Revocation of Condemnation

At any time within two years of filing the declaration of taking, the condemning authority may file a declaration of relinquishment, provided that: a) it has not yet paid EJC, or b) the condemnee has not tendered possession. 26 Pa.C.S.A. § 308. Where the condemnor revokes the condemnation, the condemnee is entitled to reimbursement of “reasonable costs and expenses” as provided in § 306(g) of the Code.[6]

A declaration automatically vests the condemnor with legal title to the property taken.  However, there are important procedural steps that may affect whether the government actually takes possession, pays the property owner EJC, or ultimately determines that it does not want or need the property, and therefore files a revocation of its declaration.

To be continued in the next article of this four part series, Eminent Domain in Pennsylvania–– Part II. Valuation Proceedings.

James (Jim) C. Sargent is a Partner and Co-Chairman of Lamb McErlane’s Appellate Advocacy Group and Litigation Department.  Jim represents small businesses, as well as major national and multinational manufacturers in litigation and appeals.  His practice includes commercial contracts, real estate and banking law, construction litigation, municipal law, restrictive covenants, employment contracts, as well as condemnation matters. Jim also offers mediation services in commercial/construction/business ownership disputes. jsargent@lambmcerlane.com. 610-701-4417.

Katherine (Katie) LaDow is an Associate in the litigation department at Lamb McErlane PC. She concentrates her practice in the areas of state and federal civil litigation, municipal litigation, government liability & civil rights defense, personal injury, workers compensation and landlord / tenant work, as well as condemnation matters. She represents individuals, small and large businesses and municipalities in a wide array of civil, employment and tort-based disputes. kladow@lambmcerlane.com. 610-701-3261.

* Ranjani Sarode, a summer intern at Lamb McErlane PC also assisted with this article.  Ranjani is attending Temple Law School, she is currently pursuing Land Use/Zoning, Real Estate, and Environmental Law as her preferred practice areas. She received her BA from UCLA and her Master’s degree in Urban Planning from Columbia University.

[1] Exercise of governmental police powers also may result in “de facto” takings or “inverse condemnations,” where, for example, zoning, environmental or other land use regulations or government roadway improvements have the effect of depriving the property owner of the full use and enjoyment of his/her land. See, e.g., Palazzolo v. Rhode Island, 533 U.S. 606 (2001) (wetlands regulation impact on costal lands); Nolen v. Newtown Twp, 854 A.2d 705 (Pa. Cmwlth.  2004) (temporary moratorium on development); Harrington v. DOT, 792 A.2d 669 (Pa. Cmwlth. 2002) (PennDOT change in highway grade caused flooding on adjacent private property).

[2] The eminent domain code broadly defines “acquiring agency” as “Any entity, including the Commonwealth, vested with the power of eminent domain by the laws of this Commonwealth.” 26 Pa.C.S.A. § 103.

[3] The declaration of taking must be filed within one year of the action authorizing it. 26 Pa.C.S.A. § 302(e).

[4] (See Section 6, infra).

[5] This might mean, for example, that the condemnor may be able to revoke condemnation proceedings once it learns that it cannot get local approvals for the proposed use, so long as that occurs within the two-year period.

[6] Where preliminary objections have been filed and not yet adjudicated, and the revocation occurs for reasons unrelated to the preliminary objections, the condemnee may have a hard time getting reimbursement for the attorneys’ fees associated with the preliminary objections.  It would seem that the trial court would have to rule on the merits of the preliminary objections in order to decide that the condemnee’s fees were “reasonable.”

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