Occupancy and Punctum Temporis
In a unanimous opinion, the Nevada Supreme Court has clarified the point in time (the punctum temporis) that the “taking” of property occurs for developed property in a direct condemnation action when an order for immediate occupancy is granted. The opinion’s take-away? The “taking” occurs when the order granting immediate is entered, because at that point in time the landowner is forced to acquiesce to the intrusion on the landowner’s property (and thus, the landowner’s property rights – specifically the right to exclude – have been taken away).
As a brief summary, Clark County had leased its police headquarters from a developer, under a lease that gave Clark County the right to exercise a purchase option. NV Energy decided that the HQ parking lot would make a great place for some of its facilities and filed a condemnation action. The complaint was filed while the developer owned the property. Occupancy was granted while the developer owned the property. Clark County exercised its right to purchase the property. NV Energy did not physically come into the property to build until Clark County had purchased the property. The case ended while Clark County was the owner of the property.
The parties agreed that once the “taking” occurred, the right to compensation vested with whomever the landowner happened to be at that moment. They simply disagreed on when the taking occurred, with the developer arguing that it occurred when the occupancy order was entered, and the County arguing that the taking did not become final until NV Energy actually occupied the property. The Court concluded that once the order permitting occupancy was entered, the landowner’s right to exclude the condemnor had been lost, and thus a stick had been taken from the bundle of sticks that make up a landowner’s property rights.
Why does this matter? Well, sometimes people sell their property in the middle of an eminent domain action, or are in the process of selling their property when a public project rolls along. The timing of a sale of land can coincide with an eminent domain action by pure coincidence. Oftentimes, however, the government’s taking frustrates the landowner’s intention for their property, leading the landowner to want to liquidate their property to move onto other ventures. When your property is being taken or under threat of condemnation, it is important to understand how your response may impact your rights to just compensation. From the government’s perspective, better understanding of who is entitled to just compensation can improve the likelihood of a successful settlement. The HQ Metro decision helps all parties better understand how to determine entitlement to just compensation proceeds.