12.4 Procedure

• Library: The Virginia Lawyer: A Deskbook for Practitioners (Virginia CLE) (2018 Ed.)

12.4 PROCEDURE

12.401 In General. Title 25.1 of the Virginia Code is the basic source of the law regarding a condemnor's use of the power of eminent domain to take private property for a public use. The primary exception to universal application of Title 25.1 is the Virginia Department of Transportation (VDOT). Although VDOT follows condemnation procedures in Chapter 2 of Title 25.1, ⁴⁴ special condemnation procedures govern VDOT's condemnations for highways. ⁴⁵ These highway condemnation procedures primarily address condemnation procedures other than those governing the just compensation trial. ⁴⁶

VDOT has procedures for entering onto someone's land and obtaining defeasible title to that land for the construction of highways. This taking occurs before a just compensation trial. Under certain circumstances, other condemnors have similar "quick-take" procedures whereby they can obtain possession and occupation of land for public improvement before a just compensation trial. ⁴⁷ To gain entry and occupation of land before paying the amount of just compensation that a judge or jury determines to be fair, the condemnor must either deposit into court an amount equal to the amount that a bona fide appraisal sets or otherwise certify that the funds are on deposit for the benefit of the property owner.

12.402 Right of Entry for Preliminary Site Inspections. Section 25.1-203 of the Virginia Code provides the procedure for a condemnor to enter land to do preliminary site inspections to determine the suitability of the land for a public use. ⁴⁸ In 2005, the General Assembly expanded Section 25.1-203 to give property owners more rights to have notice of precondemnation inspections and to recover compensation for any damages the inspection may cause.

If a property owner does not give written permission for a condemnor or its agents to enter upon his or her property, the condemnor must deliver a request for permission to inspect to the property owner not less than 15 days

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before the first date of proposed inspection. The request for permission must include (i) the specific date or dates that inspection is proposed; (ii) the name of the entity entering the property; (iii) the purpose for that entry; and (iv) the testing, appraisals, or examinations to be performed and other actions to be taken. ⁴⁹

A condemnor who fails to obtain permission must send to the owner by certified mail a notice of intent, which also must be posted at the entryway to the property or at the front door or deliver the notice of intent by guaranteed overnight courier, or otherwise deliver the notice to the owner in person with the evidence of personal receipt. The notice of intent to enter should also include a copy of a request for permission to inspect and must be made not less than 15 days before the date of the intended entry. All individuals entering the property under a notice of intent to enter must carry identification and must present the identification upon the landowner's request or the request of the landowner's authorized representative. ⁵⁰

Section 25.1-203 requires that the condemnor reimburse the property owner for any actual damages. If the property owner is forced to file an action to recover damages under the right of entry section of the eminent domain code, the owner may obtain an award for reasonable attorney fees, court costs, and expert fees. ⁵¹

In Palmer v. Atlantic Coast Pipeline, LLC, ⁵² the Virginia Supreme Court held that an interstate gas pipeline company organized under Delaware law was authorized under Virginia's public service corporation law ⁵³ to enter property to conduct surveys without the owner's permission in anticipation of condemnation proceedings. The utility had complied with the statutory requirements to seek the owner's permission and subsequently provide a notice of intent to enter. The court held that section 56-49.01 granted property access to any natural gas company doing business in the Commonwealth. It also held that the 2012 amendment to Article I, Section 11 of the Virginia Constitution did not "abrogate the extensive common law privileges" of entities vested with eminent domain power to enter property. ⁵⁴

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12.403 Disputes Regarding Entry. Section 25.1-203 lists many predicate actions and facts that must occur before the condemning authority may use its power to enter land precondemnation without the owner's consent. If a dispute arises between the owner and the agent of the condemning authority over whether the condemning authority fulfilled the requirements of Section 25.1-203 to obtain the power of involuntary entry, it may be an issue that the judge who will have jurisdiction over the condemnation will need to hear. Section 25.1-246 does empower law enforcement assistance for the condemnor to enforce its power to enter property before initiating condemnation.

12.404 Jurisdictional Prerequisites for Condemnation Petitions. Section 25.1-204 of the Virginia Code requires a condemnor to examine the title to the property it seeks to acquire before it makes an offer to buy the property or uses quick-take procedures to acquire the defeasible title to the property. The condemnor must provide the title report to the owners.

If the condemnor determines that the value of the property it is to acquire exceeds $25,000, it must obtain an appraisal of the property. ⁵⁵ If the value of the property is between $10,000 and $25,000, the condemnor must disclose to the owner that the offer is based on assessment records or other objective evidence and not an appraisal and that the owner may request that an appraisal be prepared and used as the basis for establishing just compensation. Finally, before initiating condemnation, the condemnor must make a bona fide but ineffectual effort to purchase the property from the owner. The bona fide effort must include a written statement to the owner that explains the factual basis for the offer. If an appraisal was obtained pursuant to section 25.1-417, the written statement must include a complete copy of all appraisals of the property that were obtained before the condemnor made the offer or initiated any negotiations for the property. In no event shall the offer be less than the approved appraisal, if required, or the current assessed value, unless the property has changed in a material and substantial way since last assessed. ⁵⁶

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12.405 Quick-Take. ⁵⁷

A. In General. "Quick-take" occurs when the condemnor obtains the defeasible title to property by filing a certificate of take or a certificate of deposit describing the property it is condemning. It must also either deposit with the court, or give proof of funds on deposit elsewhere, an amount that the condemnor estimates to be the fair market value of the property taken and damage to the value of the residue. If an appraisal is required under section 25.1-417, the amount of deposit must be based on that bona fide appraisal. ⁵⁸

The authorized condemnor must give notice by certified or registered mail to the owner or tenant, if known, of the freehold in the property that it intends to file or record a certificate of take or deposit on the property. ⁵⁹ Changes to the statute in 2017 require that notice of the condemnor's intent be given between 30 and 45 days before the date on which the certificate will be filed or recorded, and a second notice that provides a copy of the certificate must also be given by certified or registered mail to the owner or tenant within four business days after the filing or recording of the certificate. ⁶⁰ In the certificate, the condemnor must describe the property being taken or damaged and the owner or owners of the property, if known. ⁶¹ The certificate is indexed in the clerk's office according to the names of the owners as well as of the authorized condemnor. ⁶²

B. Effect of Recordation of Certificate. When a valid certificate of take or deposit is recorded, the interest of the owner in the property terminates and is vested in the condemnor. ⁶³ The owner's interest transfers to the funds on deposit or those funds represented by certificate of deposit. ⁶⁴ Liens by deed of trust, judgment, or otherwise transfer to the funds on deposit. ⁶⁵ It is important to note that the title of the condemnor is defeasible

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and does not become indefeasible until the condemnor and the owner agree on an amount of just compensation or a just compensation trial results in an award of just compensation. ⁶⁶ The amount of deposit and the fact that the owner has withdrawn the deposit (a "draw down") are inadmissible at the just compensation trial.

C. Draw Down of Funds on Deposit. Persons with interest in the funds on deposit may petition the court to draw down the funds on deposit. The procedure for obtaining the funds includes a petition and affidavit for draw down. Often the owner can obtain an agreement from the condemnor to consent to distribution to the owner of the funds on deposit.

If there are liens on the condemned property by a deed of trust, judgment, or otherwise, the condemnor will likely require a certificate of partial satisfaction releasing the liens that had been transferred to the funds on the deposit from the land, or, in the alternative, a subordination agreement whereby the liens are subordinated to the condemnor's defeasible title in the property taken. Sometimes it may take filing a petition and noticing a hearing before lienholders and the condemnors properly address the issues involved in the court's entering a draw down order.

If the condemnor shows cause or the records otherwise show that persons other than the owner may be entitled to portions of the fund on deposit, the court may appoint a commissioner in chancery to take evidence on the conflicting claims in the fund. If the fund, exclusive of interest, is $500 or more, the court will not tax the condemnor for the costs associated with determining the ownership in the fund. If it is...