Chapter § 62.5 CONDEMNATION PROCEDURE

• Jurisdiction: Oregon

§ 62.5 CONDEMNATION PROCEDURE

§ 62.5-1 In General

Except for the procedures set forth in ORS chapter 368 (county roads), the procedures set forth in ORS chapter 35 (General Condemnation Procedure Act) are the exclusive method for a public body to acquire property under its eminent-domain power. ORS 35.375.

In addition, whenever a public entity undertakes any program or project that will result in acquiring real property, "notwithstanding any other statute, charter, ordinance, or rule or regulation," the public entity must be guided by the land acquisition policies and provisions in sections 301 and 302 of the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 USC §§ 4651-4652). ORS 35.510(3). The procedures specified in the federal act include the following:

(1) Real property must be appraised before negotiations begin (42 USC § 4651(2)).

(2) The property owner or his or her representative must "be given an opportunity to accompany the appraiser during [the] inspection of the property" (42 USC § 4651(2)).

(3) Before negotiations for the property, the condemner must establish an amount believed to be just compensation for the property and must "make a prompt offer to acquire the property for the full amount so established" (42 USC § 4651(3)).

(4) In no event can the amount offered be less than the government's approved appraisal of the fair market value of the property (42 USC § 4651(3)).

(5) The condemner must provide the property owner "with a written statement of, and summary of the basis for, the amount he [or she] established as just compensation" (42 USC § 4651(3)).

(6) The property owner is not required to surrender possession of the real property before the condemner pays the agreed purchase price or deposits with the court for the benefit of the owner the fair market value of the property or the amount of the award of compensation in the condemnation proceeding (42 USC § 4651(4)).

(7) No person lawfully occupying real property is required to move without at least 90 days' written notice (42 USC § 4651(5)). See ORS 35.505(2).

(8) The condemner may not "advance the time of condemnation, or defer negotiations or condemnation and the deposit of funds in court . . . , or take any other action coercive in nature, in order to compel an agreement on the price to be paid for the property" (42 USC § 4651(7)).

(9) If acquiring only part of a property would leave its owner with an uneconomic remnant, the condemner must offer to acquire the entire property (42 USC § 4651(9)).

(10) If the condemner acquires any interest in real property, it must "acquire at least an equal interest in all buildings, structures, or other improvements located upon the real property" that it requires to be removed from the real property or that it "determines will be adversely affected by the use to which such real property will be put" (42 USC § 4652(a)).

Condemnation procedures for private corporations are set forth in ORS chapter 772. ORS chapter 772 pertains to the following:

• condemnations for railroad crossings and joint railroad passages through canyons and passes;
• the condemnation of public lands for railroad right-of-way;
• the condemnation rights of pipe corporations;
• condemnations by public utilities and electrical cooperative associations;
• condemnations for drainage or irrigation;
• condemnations by companies for reduction of ore, mining, quarries, lumbering, and transportation of mining products;
• condemnations by pipeline and gas companies; and
• condemnations for underground natural gas storage.

Because of the procedural exclusivity of ORS chapter 35 (except for the procedures in ORS chapter 368), the procedures of ORS chapter 35 generally apply to condemnations by private corporations.

NOTE: If an action based on condemnation is filed, the owner may elect to have compensation determined by binding arbitration if the total amount of compensation claimed by any party does not exceed $20,000. ORS 35.346(6).

§ 62.5-2 Preliminary Responsibilities

§ 62.5-2(a) Surveys, Examination, and Testing of Condemned Property

An accurate legal description of the property to be acquired must be made in the complaint. See ORS 35.255; see also State By & Through State Highway Comm'n v. Hurliman, 230 Or 98, 105-06, 368 P2d 724 (1962). The condemning authority may enter on private property before commencement of a condemnation action for the purpose of surveying, examining, and testing the property to be acquired. ORS 35.220(1); see also ORS 366.365 (Oregon Department of Transportation), ORS 772.010 (private corporations). Before entering the property, the condemner must attempt "to provide actual notice to the owner or occupant of the property." ORS 35.220(1). If actual notice cannot be given, then the condemner may post a notice in a conspicuous place that contains the condemner's name, address, telephone number, and purpose for entering the property. ORS 35.220(1).

The property owner may object to the condemner's examination or survey of the property; however, the condemner's testing and taking samples from the property requires the owner's consent or a court order in the absence of the owner's consent. ORS 35.220(2). In such a case, the condemner may petition the state circuit court for an order establishing the terms and conditions for the entry of the property and for the surveying and examination thereof. ORS 35.220(2).

Should the property be physically damaged by the entry or the testing on the property or the condemner's activities substantially interfere with the property's possession and use by the owner, then the owner is entitled to receive reasonable compensation. ORS 35.220(3). However, if the owner receives compensation for damages or interference and the condemner later condemns the same property, the owner will not receive payment for such damages or interference in the subsequent condemnation proceeding. ORS 35.220(4).

ORS 35.220(5) preserves any other legal action an owner may take against the condemner relating to the condemner's entry onto the property.

§ 62.5-2(b) Title Search

Legal title of the subject property must be established. See ORS 35.245. It is also necessary to discover and document all liens, encumbrances, easements, restrictions, and conditions affecting title, ownership, and use of the property to be acquired.

§ 62.5-2(c) Declaration of Public Necessity

Whenever, in the judgment of the condemning authority, it is necessary to acquire property for an authorized purpose, the agency must first declare by resolution or ordinance the necessity and purpose for which the property is required. ORS 35.235(1); State By & Through State Highway Comm'n v. Hurliman, 230 Or 98, 107, 113, 368 P2d 724 (1962).

In the absence of fraud, bad faith, or abuse of discretion, a public body's resolution or ordinance is presumptive evidence (1) of the public necessity of the proposed use; (2) that the property is necessary for the project; and (3) that the proposed use, improvement, or project is planned and located in a manner that "will be most compatible with the greatest public good and the least private injury." ORS 35.235(2); see State v. Pac. Shore Land Co., 201 Or 142, 155, 269 P2d 512 (1954); Emerald People's Util. Dist. v. Pacificorp, 100 Or App 79, 784 P2d 1112, on recons, 101 Or App 48, 788 P2d 1034, rev den, 310 Or 121 (1990); Wiard Mem'l Park Dist. v. Wiard Cmty. Pool, Inc., 183 Or App 448, 52 P3d 1080, rev den, 335 Or 114 (2002).

The Emerald People's Util. Dist. case concerned a public utility district's attempt to condemn four of eight hydroelectric plants on the Umpqua River operated by PacifiCorp. The Oregon Court of Appeals held as follows:

(1) ORS 35.235(2) provides that the resolution is presumptive evidence of the public necessity of the proposed use, that the property is necessary therefor, and that the proposed use is planned or located in a manner that will be most compatible "with the greatest public good and least private injury." Emerald People's Util. Dist., 100 Or App at 85.

(2) Necessity, propriety, or expediency of appropriating property for public use are legislative questions. The determination of the condemner in absence of fraud, bad faith, or abuse of discretion is final and not subject to review by the court. Emerald People's Util. Dist., 100 Or App at 84.

(3) The standard for determining abuse of discretion by a condemner is that a taking must be clearly erroneous. To be clearly erroneous a decision must have "no basis in reason" and be "without any economic justification." Emerald People's Util. Dist., 100 Or App at 84 (internal quotation marks and citation omitted).

(4) The statutory test requires the court to consider the economic benefits and harms in determining whether the condemner has abused its discretion through a taking that is not compatible with the greatest public good and the least private injury. Emerald People's Util. Dist., 100 Or App at 85-86.

On petition for review and for reconsideration, the court of appeals affirmed that the requirement that economic effects of a taking decision be considered in determining whether condemnation was compatible with the greatest public good and the least private injury does not preclude consideration of noneconomic factors or establish that noneconomic factors could never outweigh the harmful economic effects of the proposed taking. Emerald People's Util. Dist. v. Pacificorp, 101 Or App 48, 788 P2d 1034 (1990).

See Roberts v. Thies, 70 Or App 256, 261, 689 P2d 356 (1984), rev den, 298 Or 553 (1985) (an ordinance authorizing acquisition of property for park purposes under the power of eminent domain was not subject to referendum).

§ 62.5-2(d) Appraisal

Competent appraisers should be employed and assigned the responsibility of determining just compensation for the proposed taking. In addition to copies of the legal description of the property to be condemned, appraisers should be furnished...