A city planned to seize a commercial property owner’s property through eminent domain. The city repeatedly expressed to the property owner, orally and in writing, its intent to condemn his property, and placed signs in the vicinity of his property to announce the construction of a new project. Due to the proposed condemnation, the property owner was unable to enter into long-term contracts with his customers and later went out of business. The city never proceeded with the project or condemned the owner’s property. The property owner sought compensation for his business losses, claiming the city unreasonably delayed condemning the property after repeatedly demonstrating its intent to do so. The city claimed it did not unreasonably delay condemning the property since it had never formally declared its intention to do so. A California appeals court held the city was not liable for the owner’s business losses since it had not taken any actions to acquire the property, but had only engaged in planning the condemnation. [Ashley Joffe et al. v. City of Huntington Park et al. (2011) 201 CA4th 492]
Editor’s note — When a city condemns business property, the property owner has a right to compensation for lost business goodwill. This includes any financial injury resulting from impaired business functions due to the condemnation. However, an owner must be shrewd and proceed with business until forced to stop by the city’s seizure of his property as he is entitled to nothing if the city does not ultimately condemn the property.