Can the Government Use Eminent Domain to Take My Condo? What About the Common Elements?

Yes, the North Carolina government can use its power of eminent domain to take ANY type of private property for public use as long as the government pays fair and just compensation for the land taken. This power applies to condominiums and also applies to common elements. Traditional condominiums often involve apartments in a single building. The apartments themselves (including interior walls) are owned by the individual unit owners. But the Condominium Association will have ownership and control over the common elements like the hallways, the roof, the exterior walls, the underlying land, etc. But there are other condominium-like property arrangements like where a housing development is controlled by a homeowner's association. In those circumstances, common elements might include roadways, recreation facilities for use by property owners, parks and ponds, a management/meeting building, etc.

With a single-structure condominium, for practical reasons, it is unlikely that eminent domain would be used to take a single apartment. It is difficult to imagine how a single apartment would be useful for a public project. Likely, if the condominium's land was needed for a road widening, for example, the whole condominium would be taken via eminent domain.

The situation is different with a more sprawling development with a homeowner's association. Being larger, the necessary square footage or acreage in the development might be available and usable for a public project. Under those circumstances, the government would use its power of eminent domain to take only those common areas and those units/lots that were necessary.

North Carolina has enacted the North Carolina Condominium Act (the "Act") which, among many other things, governs what happens when eminent domain is used to take condominium property. See N.C. Gen. Stat., § 47C-107. Essentially, the government would file eminent domain proceedings against the Associations and include the owners of each of the individual units/lots that are to be taken. All impacted unit owners must be included in the proceedings. See Dept. of Transp. v. Stagecoach Village, 622 SE 2d 142 (NC Court of Appeals 2005). The Act requires that, if an individual's unit/lot is taken, the award of just compensation "... must compensate the unit owner for his unit and its interest in the common elements, whether or not any common elements are acquired."

Further, if part of an individual unit/lot is taken, the Act requires that "... the award must compensate the unit owner for the reduction in value of the unit and of its interest in the common elements, whether or not any common elements are acquired."

If common elements are taken, then the just compensation attributable to the common elements must be paid to the Association. The Act is silent on what the Association is allowed to do with its award of just compensation. Likely, the Association would place its payment into the Association's Reserve or General Account. But, depending on the governing documents and/or a vote by the Association members, the money could be paid by the Association to the remaining unit/lot owners in proportionate shares.

Under the Act, UNLESS the governing documents say otherwise, "... any portion of the award attributable to the acquisition of a limited common element must be apportioned among the owners of the units to which that limited common element was allocated at the time of acquisition."

A limited common element is some area of the building or lands that is legally owned by the Association, but is set aside for use of one or more unit/lot owners (but less than all of the unit/lot owners). For example, often, exterior balconies on a condominium building are limited common elements. Being part of the exterior structure of the building, they are common elements. But, being located outside and accessible only to individual units, the balconies are reserved for use of specified unit owners. This makes them limited common elements. Parking spaces are often owned by Associations as limited common elements designated for use by certain unit/lot owners.

Given the nature of condominiums, it would not be surprising if the fair market value of one unit/lot is reduced because neighboring units/lots have been taken for public use. Can those unit/lot owners seek just compensation?

This area of law is unclear. However, under legal principles enunciated in Department of Transp. v. Fernwood Hill, 649 SE 2d 433 (NC Court of Appeals 2007), if the individual owners cannot sue, likely, the Association has the power to make claims on behalf of owners whose units/lots have lost value because of the taking.

For more information, and to schedule a confidential consultation with experienced and dedicated eminent domain and condemnation attorneys in Charlotte, contact Arnold & Smith, PLLC. Use our “Contact” page or give us a call at 704-370-2828. We handle land use, zoning, and condemnation legal matters in federal court, in Mecklenburg County and elsewhere in North Carolina. We have offices in Charlotte, Lake Norman, and Union County.