Law of the Land Government interest in your property could bring business to a screeching halt. Know how to work the system for the best deal.

Bad news. Your brother just overheard two regional plannershaving a discussion about a proposed freeway access ramp, and itseems they want to run it right through your store. "Noway!" you cry. "They can't do that to me!"

Well, yes, they can. Under the legal principle of "eminentdomain," the government has a right to take private propertyfrom you when it's needed for a public purpose. If a federal,state or local government wants to widen a road or build a new cityhall and needs your property to do it, it has a right to force youto sell. You do have a right to fair compensation, but you mightnot agree with what the government offers to pay.

That's when it pays to be proactive. If you get involvedearly in the process, you may be able to negotiate changes thathave a less damaging impact on your business. And if the governmentrefuses to consider anything other than buying your entireproperty, you may be able to negotiate a price that takes intoaccount the effect of interruption and relocation on yourbusiness.

That won't necessarily be easy, however. Because thegovernment's goal is to obtain the land for the lowest possibleprice, you'll probably be offered what an appraiser estimatesas the value of the land and buildings. Chances are that won'tmatch what the place is worth to your business, because it'smore than just land: It's where you've built your customerbase, and there may not be a suitable alternative nearby. You mighthave older buildings or work with outdated machinery, andrelocation would entail replacing machines or upgrading facilities.Even if the land is undeveloped, it may be worth far more thanfarmland or a vacant lot because of its potential fordevelopment.

Fortunately, courts in recent years have become more sympatheticto the plight of the business owner forced to sell land to thegovernment. While only a fraction of the condemnation cases ever goto trial, this trend in the courts makes it more likely the agencyyou're dealing with will be open to arguments.

The Process
Start by understanding the process. While you'll probably hearrumors of the coming action in advance, your first official noticewill be a letter from the agency stating that it's interest inyour property. This letter or one that soon follows will includethe agency's initial offer, called a "pro tanto"offer. Then you and your attorney have a chance to negotiate withthe agency, bringing in your own evidence for the value of theproperty and what it would cost to relocate.

If you choose to reject the pro tanto offer, there's ahearing where a commissioner examines evidence, hears arguments andproposes a compromise. If you're still unhappy, you have aright to a jury trial, where experts on behalf of each side try toconvince the jury what the property is worth.

Get Going
Your best bet is to get going as soon as you hear about theproject.

• Hire an attorney who has substantial experience in eminentdomain cases.
• Get your business records in order to show what you stand tolose.
• If you have plans for developing the site, draw them up so youcan seek compensation the land's "highest and bestuse."
• Choose a respectable appraiser in case you're hit with alow-ball offer.
• Get bids on relocation costs.
• Use all this information to begin negotiating long before theofficial notice, when you still have a chance to influence theproject itself.
• Keep your requests reasonable.
• Most important, don't sit on your hands, or you'll findyourself watching your options evaporate.

Steven C. Bahls, dean of Capital University Law School inColumbus, Ohio, teaches BIZ Experiencesship law. Freelance writer JaneEaster Bahls specializes in business and legal topics.