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Negotiating Eminent Domain With Federal Agencies: Know Your Rights in Southern California

By Peterson Law Group on September 30, 2026

Receiving an acquisition offer from a federal agency can put a Southern California property owner in an uncomfortable position. The government may have already conducted an appraisal, determined what it believes the property is worth, and presented a written offer that appears official and final.

But the federal government’s first offer does not necessarily end the valuation discussion.

Negotiation can be an important stage of the eminent domain process. Before accepting an offer, property owners should understand how the government reached its valuation, what property rights are being acquired, and whether important factors affecting the property’s value have been overlooked or underestimated.

John S. Peterson is an experienced federal eminent domain attorney in Los Angeles. If you are facing eminent domain proceedings, Peterson Law Group PC can advise you of your rights and negotiate seeking a more accurate valuation.

What Happens Before a Federal Agency Makes an Acquisition Offer?

For acquisitions covered by the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act regulations, 49 C.F.R. § 24.102 establishes procedures agencies generally must follow.

• The agency must notify the owner as soon as feasible of its interest in acquiring the property. The agency must have the property appraised before beginning negotiations, but this requirement is subject to certain exceptions.
• The owner or the owner’s designated representative must be given an opportunity to accompany the appraiser during the property’s inspection.
• The agency must then establish an amount it believes represents just compensation. That amount cannot be less than the agency’s approved appraisal of the property’s fair market value.
• When negotiations begin, the agency must make a prompt written offer and provide a written statement summarizing the basis for the amount offered.

These procedures give owners an opportunity to understand and evaluate what the government is proposing before agreeing to sell.

The Government’s First Offer Is Not Necessarily Final

Negotiating eminent domain compensation should be treated as a meaningful stage of the process rather than a formality.

Under 49 C.F.R. § 24.102, an owner must be given a reasonable opportunity to consider the government’s offer and present material the owner believes is relevant to determining the property’s value. The owner may also suggest reasonable modifications to the proposed terms and conditions of the acquisition. The agency must consider that information.

The regulations also expressly contemplate administrative settlements above the amount initially offered as just compensation. An authorized agency official may approve a higher settlement when it is considered reasonable, prudent, and in the public interest.

Question to Ask Before Accepting a Federal Acquisition Offer

You will want to start by determining exactly what the government is acquiring. This requires asking a number of questions:

• Is the agency purchasing the entire property?
• Is it taking only part of the parcel?
• Does the government want a permanent easement?
• Does the government want a temporary construction easement?
• Does the government want access rights?
• Does the government want air rights?

Next, examine how the agency arrived at its valuation. Depending on the property and acquisition, important questions may include:

• What highest and best use did the government’s appraiser assign to the property?
• Did the appraisal recognize realistic development or redevelopment potential?
• Were appropriate comparable properties used?
• How were existing buildings and other improvements valued?
• Will an easement restrict future use of the property?
• Will the acquisition interfere with access, circulation, parking, visibility, or development?
• If only part of the property is being acquired, how will the project affect the remaining property?

These issues can be especially significant for Southern California commercial and industrial properties, where location, zoning, access, development potential, and site configuration can substantially affect value.

What Does Highest and Best Use Mean?

The concept of highest and best use considers the use that is legally permissible, physically possible, financially feasible, and maximally productive. Depending on the facts, that use may differ from how the property is currently being used.

If zoning, market demand, parcel configuration, and other factors support a more valuable redevelopment opportunity, an appraisal based primarily on the existing improvement could potentially miss an important component of market value.

Determining the appropriate highest and best use requires factual and valuation analysis. A federal eminent domain attorney can work with qualified appraisal and other experts to evaluate whether the government’s assumptions adequately reflect the property’s potential.

What If New Information Shows the Government’s Appraisal Is Too Low?

Under 49 C.F.R. § 24.102, if information supplied by the owner, a material change in the property’s condition, or a significant delay since the appraisal indicates that the acquisition offer should be reconsidered, the agency must have the appraisal updated or obtain a new appraisal. If appropriate, the agency must then establish a new amount it believes represents just compensation.

Depending on the dispute, useful evidence might include an independent appraisal, comparable sales, leases, zoning information, development plans, engineering analysis, access studies, or other documentation showing how the acquisition affects the property. The property owner’s goal is to demonstrate why its valuation should change.

Speak With an Experienced Federal Eminent Domain Attorney in Los Angeles

If a federal agency has approached you about acquiring your Southern California property, you should strongly consider obtaining legal advice before accepting the government’s offer or agreeing to acquisition terms.

Peterson Law Group PC was founded in 2001. John S. Peterson has earned an AV Rating from Martindale-Hubbell®, which is their highest distinction for ethics and legal ability. He belongs to the exclusive Multi-Million Dollar Advocates Forum. John has also been named “Lawyer of the Year” in Los Angeles by Best Lawyers for Eminent Domain and Condemnation Law.

You Have Rights; We Protect Them.

Call (213) 236-9720 to learn more today.

Frequently Asked Questions About Federal Eminent Domain

Can I negotiate a federal eminent domain offer?

Yes. For covered acquisitions, federal regulations give property owners a reasonable opportunity to consider the government’s offer, present relevant valuation information, and suggest reasonable changes to the proposed acquisition terms. Negotiating eminent domain compensation can therefore be an important part of the process rather than simply accepting the federal agency’s initial valuation.

Is the federal government’s first eminent domain offer final?

Not necessarily. The government’s initial offer is based on the amount the agency has established as just compensation, but federal regulations contemplate continued negotiations and, in appropriate circumstances, administrative settlements above that amount. A federal eminent domain can review the offer and determine whether there are legitimate grounds for seeking additional compensation.

Can I get my own appraisal before accepting the government’s offer?

Property owners can obtain independent valuation advice when evaluating a federal acquisition offer. A qualified appraiser may identify issues that the federal eminent domain appraisal did not adequately address, such as highest and best use, development potential, improvements, easements, access restrictions, or the effects of a partial taking.