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How Inverse Condemnation Claims Arise from Damaged Property

By Peterson Law Group on April 30, 2024

As a property owner, you have the right to bring an inverse condemnation action when your property has been effectively taken or damaged due to government action or the government’s failure to act. This includes physical appropriation and regulatory actions that lead to a loss in your property’s value.

Inverse condemnation occurs when a government entity takes or damages private property without following the formal process of condemnation and without justly compensating the property owner. Unlike direct condemnation, where the government actively takes property for public use, inverse condemnation is a defensive claim by the property owner against the government.

How Does an Inverse Condemnation Claim Work?

Claims of inverse condemnation typically arise when property owners feel the government’s actions have negatively impacted their property rights or value without proper compensation. These claims allow property owners to have their cases heard when there is a causal link between the damage they have suffered and the actions or negligence of a government body. This damage could result from direct physical damage caused by public works or infrastructure, such as flooding from a government-constructed dam.

Inverse condemnation claims may stem from unfair regulatory actions, like zoning laws that limit how a property can be developed or used, effectively decreasing its value. In California, where natural disasters like wildfires and floods are common, inverse condemnation claims are often filed when property damage is linked to government-controlled land or infrastructure.

Types of Damages in Inverse Condemnation

Physical damage to property is one of the most straightforward bases for inverse condemnation claims. This type of damage may occur when government projects or activities destroy, harm, or significantly alter someone’s property. Examples include erosion from a government-constructed levee, structural damage from nearby public construction, or even soot and ash damage from a fire caused by governmental negligence.

In California, where infrastructure and development projects are common, the risk of physical damage to surrounding properties is a real concern for property owners. To assert a claim, the owner must prove that the physical damage was directly and substantially caused by the government’s action or project. It’s not about normal wear and tear but significant damage.

Diminished property value as a result of government action is another critical aspect of inverse condemnation claims. This type of damage occurs when government activities or regulations lead to a decrease in the market value of a property. For example, if a new zoning ordinance limits the types of businesses that can operate in a certain area, you may experience a drop in potential rental income, thereby reducing the property’s overall value.

California has strict environmental and land-use regulations, and owners may find their development plans thwarted or severely restricted, causing a devaluation of their land. To pursue an inverse condemnation claim for diminished value, property owners must demonstrate how the government action has imposed a significant economic impact on their property and that the regulation has deprived them of reasonable investment-backed expectations.

Inverse condemnation claims can also be based on economic loss that is not directly related to physical damage or property value decline. These losses can occur when government actions result in reduced access to a business, leading to a decrease in customers and sales. For instance, a road closure for extended public construction may deter customer traffic to a local business, causing significant economic hardship. In California’s dynamic economy, where government projects are frequent, these types of indirect losses can be substantial.

Proving an Inverse Condemnation Claim in California

A crucial element in proving an inverse condemnation claim is establishing a clear causal link between government action and the property damage incurred. This might involve showing how a government construction project led to a landslide that damaged property or how a water management decision by a public agency resulted in flooding. This often requires expert testimony, including engineers or land use planners, and a thorough collection of documentation and data.

What Is Just Compensation?

Just compensation refers to the obligation of the government to reimburse property owners for the fair market value of their property that’s been taken or damaged. In California, determining just compensation involves assessing the property’s value before the government action occurred compared to its value afterward. This assessment includes the current use of the property and its highest and best use, considering potential future developments and uses.

For property owners to argue successfully for just compensation, they need to provide evidence of the property’s worth. This includes appraisals, market analysis, and testimony from expert witnesses.

Our Los Angeles Inverse Condemnation Attorneys Get Positive Results for Property Owners

For over 35 years, Peterson Law Group PC has been fighting for the rights of Los Angeles property owners. We’ve won substantial inverse condemnation settlements for property owners harmed by unfair government action, and our Los Angeles inverse condemnation attorneys are prepared to help you.

Peterson Law Group PC gets high marks from the independent rating agencies Best Lawyers and Super Lawyers, and our founder, John Peterson, is a member of the Million Dollar Advocates Forum. Call us at (213) 319-4993 to learn more today.