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Hardship Acquisitions as an Option for Property Owners Affected by Transportation Corridors

Posted by attorney Jacob Briggs

Imagine this: a state or local government tells you that you are no longer welcome in your neighborhood and that you will be forcefully removed from your home if you don’t voluntarily leave. It may sound like something that might have happened only in different place or time. But for those who are forced to relocate to make way for a new local transportation corridor, this scenario is not hypothetical at all. If you or someone you know is ever in this situation, you need to be aware that there are provisions in place to ease the transition.

The process of condemnation is too complicated and to go over in detail here. For those who would like to learn more about it, there are some excellent resources available at The Office of the Property Rights Ombudsman and the Utah Department of Transportation websites. If you or a friend has an immediate need, you could consult an attorney about your specific situation. This article is designed to provide local homeowners with practical steps they can take when dealing with the fallout caused by a government’s attempt to take their property for a local corridor project.

Contesting a Taking

The Fifth Amendment to the United States Constitution limits government’s power to take private property to situations when a public purpose is involved, and even then that right is conditioned on payment of “just compensation" to the property owner. An impacted person has the right to challenge whether the public purpose and just compensation requirements are satisfied in his case. While challenges to the public purpose requirement are less likely to succeed, challenges as to what constitutes just compensation are more likely to succeed. Of course, there are specific procedures and rules that that must be followed if such a challenge is made. And for many, the government’s initial offer may not be so bad as to justify the cost and effort of further argument.

Hardship Acquisitions

Given that many local corridor projects are currently in the planning stage, governments may not complete the property acquisitions for several years. In the meantime, however, the value of your property is affected by the impending project. What can you do as a homeowner if you are forced, by some change in your life circumstances, to move before the government is ready to actually condemn your property and pay you just compensation? Applying for a hardship acquisition may be the answer. A hardship acquisition is a process by which you can voluntarily negotiate the sale of your property to the government entity with plans to condemn your property if you have a reason why you need to move immediately.

Generally, to qualify for a hardship acquisition, you must (1) have a legitimate need to immediately sell your property and (2) show that the impending project prevents you from obtaining the value you would otherwise receive from your property. Keep in mind that a hardship acquisition is voluntary on both sides, so, unfortunately, there is no guarantee that the government agency will agree to purchase your property. However, a hardship acquisition can be a useful tool to get the government’s attention and begin profitable negotiations.

To establish that you have a legitimate need of immediate sale, you must show that you, when compared to others in your neighborhood, have a special health, safety, or financial reason why remaining in the property poses an undue hardship. They key is demonstrating that you have unique circumstances that set you apart from the rest of your neighbors; the simple fact that your property value has been affected by the proposed condemnation is not enough.

In evaluating whether the impending project prevents you from obtaining fair market value for your property, the government will consider a number of different factors, including the following:

  1. Whether you have openly marketed the property to potential buyers and how formally you have done so (have you retained a real estate agent, listed the property on the MLS, etc.);
  2. Whether you have performed a market analysis to determine what your listing price would be in absence of the effect of the impending project; and
  3. Whether your property has been on the market for a long time relative to other listings in your area.

Given that the government is under no obligation to acquire your property via a hardship acquisition, you really have no immediate recourse if you are unable to reach an agreement with the government on a fair purchase price. If you are unable to reach an agreement, you must try to sell the property on your own to a private buyer or simply wait for formal condemnation and then challenge the amount of compensation at that time.

While hardship acquisitions may not work in every case, they are a tool that can help a property owner whose life circumstances force them to move before the government is ready to proceed with full-scale condemnation. You can apply for a hardship acquisition by downloading and submitting an application from the Utah Department of Transportation website. It might also be a good idea to browse some of the minutes of Utah Transportation Commission meetings to see how the Commission has dealt with requests for hardship acquisitions in the past.

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