blog home Inverse Condemnation How to Protect Your Business Property From Government Takings in California

How to Protect Your Business Property From Government Takings in California

By Peterson Law Group on June 24, 2025

If you’re a business owner in California, your property isn’t just a place—it’s a core asset that supports your livelihood. But what happens when the government decides to take that property for a public project?

Whether it’s for a highway expansion, utility infrastructure, or urban redevelopment, government taking of business property in California is a real and pressing threat that can have long-term consequences for your operations.

At Peterson Law Group PC, we’ve spent decades representing property and business owners throughout the state in eminent domain matters. This guide outlines what you need to know about protecting your property, securing just compensation, and asserting your rights when faced with the prospect of condemnation.

What Is Government Taking?

In California, the government—whether it be a city, county, state agency, or utility—has the constitutional power to take private property for public use. This process is known as eminent domain. But the U.S Constitution and California law require that the government provide just compensation to the property owner when this power is exercised.

Unfortunately, the process isn’t always fair or transparent. Many business owners are caught off-guard when they receive notice of condemnation, and they may not be aware of the full range of damages or protections available to them under the law.

Step 1: Understand the Types of Takings That Can Affect Businesses

There are two primary ways government takings can affect commercial property owners:

Direct (Formal) Condemnation

This occurs when the government files a legal action to acquire title to your business property. Common examples include:

• Land acquisition for road widening
• Demolition of buildings for light rail or bus infrastructure
• Seizure of parking lots or access easements

Inverse Condemnation

This happens when the government damages or limits the use of your property without formally acquiring it. You may have an inverse condemnation claim if:

• Construction on nearby public projects interferes with access or utility service
• You suffer flooding, vibration damage, or noise from a government project
• Regulations reduce your property value without compensation

In both situations, you may be entitled to compensation—not just for the land, but for the value of your business, lost income, and relocation costs.

Step 2: Know Your Rights to Just Compensation

California law requires that property owners receive just compensation for takings—but what that includes can be complex for business owners.

You may be entitled to compensation for:

• Fair market value of the property taken
• Loss of goodwill (i.e., loss of customer base or reputation due to the taking)
• Business interruption damages
• Fixtures and equipment that cannot be moved
• Relocation costs and reestablishment expenses

Working with an experienced California condemnation lawyer is critical to making sure all eligible damages are identified, documented, and claimed in a timely manner. Too often, businesses accept low offers that don’t reflect the full scope of their financial loss.

Step 3: Respond Strategically to a Notice of Condemnation

If you receive a Notice of Intent to Acquire or other formal communication regarding a government taking, you must act quickly.

Do NOT accept initial offers without legal review.

These offers are often based on outdated appraisals or exclude business-related damages like relocation and goodwill loss.

Hire a skilled California eminent domain attorney immediately.

The sooner you involve a legal expert, the more strategic options you’ll have—especially if you wish to challenge the taking itself or negotiate more favorable terms.

Document everything.

Begin collecting financial records, property appraisals, lease agreements, and customer traffic data. These will be essential in proving your losses.

Step 4: Protect Against Business Relocation Damages

When a taking forces you to relocate your business, the costs go far beyond the price of a moving truck. Under California’s Relocation Assistance Act, you may be entitled to:

• Moving and transportation costs
• Reestablishment expenses (up to statutory caps)
• Temporary business interruption damages
• Assistance finding a comparable site

This is where the experience of a qualified eminent domain defense attorney makes a significant difference. Many relocation packages offered by agencies underrepresent actual business losses.

Step 5: Consider Challenging the Taking

Yes, you can fight back.

There are legal grounds to challenge a condemnation if:

• The project is not for a true public purpose
• The taking is more extensive than necessary
• There are procedural flaws in the acquisition process
• The environmental review was inadequate (CEQA violations)

In these cases, a California condemnation lawyer can seek to limit the scope of the taking, negotiate for better terms, or halt the process entirely.

Step 6: Explore Inverse Condemnation Claims

Even if the government hasn’t formally taken your property, you may still have a right to compensation. Inverse condemnation claims can be pursued when government action causes:

• Physical damage to your property
• Significant interference with access or operations
• Loss of utility service or necessary infrastructure
• Economic devaluation due to adjacent construction

These claims require detailed legal and financial analysis, but they can result in substantial compensation when handled correctly.

Reasons to Choose Peterson Law Group PC

John Peterson of Peterson Law Group PC is one of the most distinguished business property rights lawyers in California:

• Over 38 years of experience
• Member: The American Board of Trial Advocates
• Elected Member: American Board of Trial Advocates (ABOTA)
• AV Rating from Martindale-Hubbell® AV
• Listed by Super Lawyers in Southern California
• Named “Lawyer of the Year” for Los Angeles by Best Lawyers for Eminent Domain and Condemnation Law

 

Talk to an Experienced Eminent Domain Lawyer in Los Angeles

You’ve built your business with time, investment, and hard work. Don’t let a government agency undervalue what you’ve created. Whether you’re facing a full property seizure, loss of access, or disruptive nearby construction, you deserve fair treatment and full compensation.

We’ll review your case, explain your options, and build a strategy to protect your business and property interests.

Call Peterson Law Group PC today at (213) 236-9720 to schedule a consultation.