Transfer of Title and Possession

a. How does title transfer to the government if we reach a negotiated agreement?

If you reach a negotiated agreement with the government prior to it filing a condemnation lawsuit, title will most likely pass by deed. The form of the deed is important. Always consult with an attorney before using any form of deed provided by the government.

If you and the government reach a negotiated agreement after the government files a condemnation lawsuit, title typically transfers by a “stipulated judgment,” which is a document filed with the court indicating that title transfers to the government in exchange for certain compensation.

b. Can the government take title to or possession of my property before just compensation is determined by settlement or by a jury?

The government cannot take title to property without (1) the property owner voluntarily conveying title by way of deed or stipulated judgment; or (2) a judgment following trial.

The government, however, may take possession of property upon: (1) filing of the condemnation complaint; (2) depositing the funds it contends represents just compensation with the court; and (3) obtaining a court order indicating that governmental possession is immediately necessary to facilitate construction of the public project. ORS 35.265, 35.352.

In the event of the rare “emergency that poses a threat to persons or property,” the government may also take immediate possession of property upon the filing of a condemnation lawsuit. ORS 35.348.

c. What if the property has a lien or mortgage on it? How does that affect my right to the deposited funds?

If your property has a mortgage or lien on it, the holders of those interests may have a claim to a portion of the condemnation proceeds, including the government’s deposit into court. In general, the holders of those interests in your property will be limited to the amount of condemnation proceeds they are entitled to collect based on the mortgage or lien document. In the event a lawsuit is filed by the government, any holders of interest in your property will also be named as defendants. Hiring an experienced condemnation attorney will help streamline this process and ensure you receive your fair share of condemnation proceeds available.

d. If the government deposits with the court the amount it contends represents just compensation, may I access those funds while the difference between the government’s valuation and my valuation is being litigated?

Yes, upon court order, you may withdraw the funds from the court. Your withdrawal of the funds does not signal that you agree with the government’s opinion of just compensation and will not prejudice your case. ORS 35.365. You should be entitled to at least as much as the government has deposited, and you should continue to fight for the remainder of just compensation for the government’s taking.

e. What can I do with those funds?

You can put the funds to use immediately, whether reinvesting them in other property or investing them for use as a legal defense fund in your effort to obtain just compensation. In any event, you should consult with your tax advisor, as there may be tax consequences to the withdrawal and tax deferral strategies you can lawfully employ.

f. Can the government wait to take possession until after just compensation is determined by a jury?

Yes. If the government does not need a particular property immediately, it can wait to take possession until after the final determination of just compensation. In such a case, it would not make the above-referenced deposit of funds with the court. In certain rare circumstances, if the jury returns a verdict for just compensation that the government does not want to pay, it will dismiss the case and not take possession or title to the property. In such an event, the government would be required to file an election not to take the property within 60 days after the verdict and pay the property owner’s court-determined attorney fees and costs in defending the condemnation lawsuit. ORS 35.335(3).

g. Am I entitled to interest between the time of the transfer of possession and the judgment on just compensation?

If the government deposits what it contends is just compensation with the court, you are not generally entitled to interest on this amount, but you are entitled to interest at the statutory rate of 9% on the difference between the amount the government deposited and any amount you receive beyond the deposit, whether through negotiation, mediation or trial. This 9% interest runs from the date the government took possession of the property.

h. Is there a chance I may receive a just compensation determination less than what the government deposited in court, requiring me to possibly return a certain portion of the funds I withdrew?

Technically, yes, but highly unlikely.