In reviewing some of the comments posted on the Honolulu Advertiser’s November 1 report “Rail study doesn’t list all affected properties,”it seems several of the commenters have fairly severe misconceptionsabout how eminent domain law works in Hawaii. Let’s clear some up somemyths.
- Myth #1: The city will offer a “premium” to property ownerswhose homes, businesses and churches will need to be acquired, becausethe city will want their properties quickly. Wrong on twocounts. First, the city does not need to offer a premium since Hawaiilaw has a procedure by which the city can take immediate possession ofproperty it wants, “ex parte” (without notice to thelandowner). Second, the city will only offer what it believes to be theamount legally required to be paid for “just compensation” and damage,not a penny more. Indeed, the citywill claim it is fulfilling its obligation to the rest of thetaxpayers when it offers you nothing more than its own valuation.
- Myth #2: The compensation offered and paid will include attorney’s fees and costs. No, the Hawaii Supreme Court has held that the “just compensation” and damages required by the Hawaii Constitution to be offered and paid to property owners whose land is taken does not include attorney’s fees and costs the landowner incurs if the property is taken. State v. Davis, 53 Haw. 582, 587, 499 P.2d 663, 687-88 (1972). In that case, the court held:
We hold in accordance with the overwhelming weight ofauthority that attorneys’ fees and expenses, including expert witness’fees, are not embraced within the meaning of ‘just compensation’ forpurposes of article I, section 18 of the Hawaii Constitution [currently article I, section 20].
Howmight that work out for the homeowner? Let’s say, hypothetically, thatyou are going to have your home taken to make way for the rail, and youbelieve it is worth $614,000, the most recent median price of a home inPearl City. But the city thinks otherwise and offers you $450,000, themost recent median price for a home in Ewa (this is not how valuationis determined, and I am only using these numbers as an example). Youshow to a jury that the city has grossly undervalued your property, andyou eventually win. You have to pay your court costs, your attorney, andyour appraiser out of that additional $165,000 the city should have offered you inthe first place, so the city’s lowball offer has effectively kept youfrom obtaining the full value of your home.
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Myth #3: I can use the deposit to pay my attorneys to fight the city’s taking of my property. Youcan, but you’ve just “abandoned all defenses…except the sufficiencyof the compensation or damage award.” So if you take the money thecity deposits when it grabs your property, you can’t object to the factthat the city is taking your property, just the amount you will receiveas compensation and damages.
- Myth #4: I can count on the city treating me fairly and making a reasonable offer. Good luck with that one. Read this summary by law professor and eminent domain expert Gideon Kanner and see if you still think that this is true.
- Myth #5: A property owner whose land is taken for the railproject can expect high valuation since the rail project will raise thevalue of properties near transit stations. Questionable. The city will no doubt claim the “scope of the project” rule requires a lower value.The rule says that increases or decreases in value after the scope ofthe project is known in the market can’t be used to determine value ofthe property taken.
- Myth #6: I just appealed the city valuation of my home forproperty tax purposes saying it overvalued my home, but my claims oflower valuation can’t be used against me in eminent domain. Oh yes they can. State law provides:
Thevaluation claimed by the taxpayer in any appeal regarding the assessment ofreal property tax shall be admissible in evidence as an admission of the fairmarket value of the real property as of the date of assessment irrespective ofthe fact that the assessed value from which the taxpayer appealed is adjustedto one hundred per cent fair market value…