Browse Proptionary encyclopedia

Build your real estate vocabulary to be able to communicate and invest more effectively and professionally.

Inverse Condemnation


Legal action initiated by a landowner for the loss in their property value due to a government action such as construction of a nearby building, military base, freeway, or bridge.


If eminent domain causes unforeseen circumstances to a property owner, he or she can bring a lawsuit against the government for inverse condemnation. Inverse condemnation is a legal recourse process that allows property owners to sue the government for damages which prevent the owner from enjoying his or her private property rights. Common claims include: physical damage, crop damage, and water blockage.

For example, say the government confiscates a portion of a property owner’s property and builds an army base. That base conducts routine military training exercises that cause intolerable noise and disturbance to the property owner’s right to quiet enjoyment. In this case, the property owner may have the right to recover damages through inverse condemnation.

Some of the main instances in which a property owner can recover damages for inverse condemnation include:

When there is a physical seizure of property

When the seizure of a portion of a property causes the property’s value to be drastically diminished

When the seizure of property does not directly benefit the public

History of Inverse Condemnation

The Tucker Act of 1887 is a federal law which allows property owners to start a legal suit against the federal government for making structural changes to the area in which the property owner holds property. The law was passed to compensate property owners whose land value was diminished because of partial confiscation of their properties. If the property owner can prove that the Tucker Act applies to the government’s use of eminent domain to their property, the federal government may be responsible to pay for the loss that property owner’s have been subjected to as a result of the government’s construction projects.

Inverse Condemnation Lawsuit

Inverse condemnation describes the process where the government repossesses a private citizens land without paying the property owner the compensation they are due according to laws of due process and the constitution. An inverse condemnation lawsuit involves the private citizen bringing a lawsuit against the government for damaging their property rights, either from affecting landowners right to reasonably use the property or by repossessing it. The damaged party whom is the private citizen is a plaintiff in this case and the government is the defendant.


Damages in an inverse condemnation case include seizure of the property, fire damage, flooding, damages to crops, livestock, and water supply.

One of the main complaints opponents have of inverse condemnation and eminent domain cases is the fact that there is no consistent case law describing what is and is not acceptable. Confusion, even among lawyers creates many difficulties and redundant retrials regarding such cases. The government legally has the right to confiscate land at their own discretion as long as they don’t go “too far” with their interpretation of their police power. This great discretionary power has created a lot of distrust between land owners and the government who have the right to confiscate land for public use and still maintain and respect the land rights of citizens.

Case Law As It Relates to Inverse Condemnation

Case Review: Regency Outdoor Advertising, Inc. v. City of Los Angeles (2006)

The case, Regency Outdoor Advertising, Inc. v. City of Los Angeles (2006) 39 Cal.4th 507., involved a private advertising company suing the City of Los Angeles for inverse condemnation.

The City of Los Angeles planned to plant trees along a public street. However, those trees would partially block the billboards set up on the roadside property of a private advertising agency (Regency Outdoor Advertising, Inc.). Regency Outdoor Advertising alleged that the trees would obstruct motorists’ views of the billboards and damage its business. It filed a lawsuit against the City for inverse condemnation.

The City of Los Angeles spent over $90,000 hiring expert testimony for the case. The Superior Court held that owners of roadside property did not have the right to be seen. Therefore, Regency Outdoor Advertising was not entitled to compensation. The court ruled in favor of the City of Los Angeles, and also held Regency Outdoor Advertising liable for the City’s legal fees. Regency Outdoor Advertising appealed. The Court of Appeals upheld the lower court’s ruling.

Regency Outdoor Advertising appealed to the Supreme Court. The Supreme Court argued that under Business & Professions Code, Section 5412, no compensation was required. The court affirmed both of the lower court’s decisions and required Regency Outdoor Advertising to pay the government for reviewing the case.

Case Review: Dina v. People ex Rel. Department of Transportation (2007)

The case, Dina v. People ex Rel. Department of Transportation (2007) 151 Cal.4th 1029., involved a dispute between a property owner and the Department of Transportation over inverse condemnation.

The Department of Transportation constructed a freeway adjacent to a property owned by Dina. Dina argued that the construction caused cracks in her patio and other structural damages to her home. Dina further claimed that the noise and dust created by the presence of the freeway entitled her to damages. She sued the Department of Transportation over claims of inverse condemnation, nuisance, and negligence.

The Superior Court reasoned the Dina’s claims were unsubstantiated, contending that there was no direct proof of the connection between the freeway project and the cracks to her property. Dina appealed. The Court of Appeals upheld the lower court’s ruling. The court denied Dina’s subsequent request to have her case reviewed by a jury. (Under California law, plaintiffs do not have the right to inversion condemnation proceedings in the presence of a jury.)

Sign Up

Start expanding your real estate knowledge

Already have an account?
By signing up to create an account I accept Proptionary’s

Join Us

Get ahead by signing up for the latest real estate, investment and financial articles.