What would you think if a municipality stepped in and took your land but still taxed you on it? They tried that once before in this country and there was a revolution, remember?
I’ve been researching the issue of inverse condemnation recently. That’s where a village, town, city or state has been using your land, with your permission………even paying you rent……………then one day, the locality decides that just doesn’t suit their budget any longer. Not only do they stop paying you rent for the use of the property but they also continue taxing you on it.
All kinds of issues arise, not the least of which would be the property owner’s liability should someone or something be injured or damaged on the land while he wasn’t even in possession of it. So, bottom line, it is not costing the municipality anything to use the land. In fact, the government is generating income from it through the owner’s property taxes. The owner, on the other hand, is paying for land he has no use of through his property taxes and insurance premiums to protect his interests, not to mention the loss of income from not being able to use his own property. Yes, this is the United States but this does happen more often than you think. So, what’s a property owner to do?
In New York, the answer most likely lies in the Eminent Domain Procedure Law. I say most likely because depending on the circumstances a cause of action may also lie in trespass or nuisance or even an Article 78 procedure, seeking to prohibit or compel some action on the part of a governmental body. However, all of the various nuances to an inverse condemnation are well beyond the scope of this discussion. Therefore, let’s assume for our purposes here that the above scenario states our hypothetical facts, what is the property owner to do? Generally, the statute of limitations on such an action is three years and would begin to run from the moment of the taking, or in our case, from the moment the governmental entity stopped paying rent and refused to vacate the premises. The action must be filed within the three year period either in the Court of Claims or State Supreme Court depending on which municipal agency is involved. If the court ultimately determines there was an inverse condemnation, damages would be assessed based on the market value of the land, loss of use to the property owner and yes, the government would be responsible for his attorney costs and fees.