Negotiations

Most governmental authorities prefer to negotiate an acquisition. An agreement saves the authority attorneys fees, reduces delay, and makes for happier constituents. Sometimes an authority will approach a landowner with a very substantial and fair offer. Other times, the authority approaches the landowner with an offer which is way too low and unfair. If an attorney is hired by the property owner, the authority's offer will serve as a baseline for the fee agreement with an attorney. Property owners should also note that prior to condemnation, an agency may enter private property to survey the land or in some cases to confirm whether the land has environmental problems. If there is a dispute regarding the right of entry, the governmental authority applies to the Court for an order.

THE WRITTEN OFFER

The agency will begin negotiations by delivering the written offer of just compensation for the purchase of the real property to the property owner. If practical, this offer will be delivered in person by a representative of the agency. Otherwise, the offer will be made by mail and followed up with a contact in person or by telephone. All owners of the property with known addresses will be contacted unless they collectively have designated one person to represent their interests.

The agency’s written offer will consist of a written summary statement that includes all of the following information:

(1) The amount offered as just compensation;
(2) The description and location of the property and the interest   to be acquired; and
(3) The identification of the buildings and other improvements    that are considered to be part of the real property.

The offer may also list items of real property that may be retained and removed from the property and their retention values. If the owner decides to retain any or all of these items, the offer will be reduced by the value of the items retained. The owner will be responsible for removing the items from the property in a timely manner. The agency may elect to withhold a portion of the remaining offer until the retained items are removed from the property.

Any separately held ownership interests in the property, such as tenant-owned improvements, will be identified by the agency.

The agency may negotiate with each person who holds a separate ownership interest, or, if appropriate, negotiate with the primary owner and prepare a check payable jointly to all owners.

The agency will give the owner a reasonable amount of time to consider the written offer and to ask questions or to request clarification of anything that is not understood. Under Minnesota law, a copy of the Agency’s appraisal must be submitted to the owner at least 60 days prior to the Agency initiating eminent domain proceedings. In addition, Minnesota law requires that the Agency make a good faith attempt to negotiate personally with the owner of the property before commencing eminent domain proceedings. If the owner believes that all relevant material was not considered during the appraisal, they may present such information at this time. Modifications in the proposed terms and conditions of the purchase may also be requested. The agency will consider any reasonable requests that are made during negotiations.

PARTIAL ACQUISITION

Sometimes, an agency does not need all the property owned by a person. The agency usually only purchases what it needs.

If the agency intends to acquire only a portion of the property, the agency must state the amount to be paid for the part to be acquired. In addition, an amount will be stated separately for damages, if any, to the portion of the property retained by the owner.

If the agency determines that the remainder property will have little or no value or use to the owner, the agency will consider this remainder to be an uneconomic remnant and will offer to purchase it. The owner will have the option of accepting the offer for purchase of the uneconomic remnant or of keeping the property.

AGREEMENT BETWEEN THE PROPERTY OWNER AND THE AGENCY

When an agreement is reached, the property owner will be asked to sign an option to buy, a purchase agreement, an easement, or some form of deed prepared by the agency. If an agreement is not reached because of some important point connected with the acquisition offer and the agency has exhausted all its opportunities to reach a settlement, the agency will initiate condemnation proceedings.

The good faith negotiation requirement prevents the agency from taking any action to force the property owner into accepting its offer. Prohibited agency actions include the following:

• Advancing the condemnation process
  
• Deferring negotiations
  
• Deferring condemnation
• Delaying the deposit of funds for the owner's use with the court when condemnation is initiated
• Any other coercive action designed to force an agreement by an owner regarding the price to be paid for the property