Less than a year on the books, a new law in Georgia is creating tremendous uncertainty among property owners and companies convicted of a public project. OCGA §32-3-32, enacted last July, expands the procedures for property owners and businesses to seek compensation when a state or local government condemns private property and rights.
Although it claims to make it easier for owners to obtain compensation, the result is a greater burden for owners and operators, both in terms of uncertainty and the hurdles to overcome in order to resolve confiscation. It also shifts the cost of post-capture property damage mitigation costs to cities and counties, potentially allowing the prosecuting authority to circumvent the constitutional obligation to provide fair and fair compensation for the damage caused by their projects. At the local level, the new statute can lead to conflicts within different units of the same local government.
An attempt to solve a problem
In Georgia, the sentencing authorities are required to pay fair and equitable compensation for the kidnapping and Damage to property and property rights and interests, including business loss or damage. Therefore, an owner faced with an takeover must be compensated for the land it occupies, as well as any damage to the property remaining after it has been captured. The amount of damage often includes money to “heal” or mitigate this damage to the property.
The new law, written as HB 1098, came into force on July 29, 2020 and changed the existing condemnation procedures under Title 32 with regard to harm reduction in the event of ingestion. The original intent of the law appears to be to resolve a significant problem in the event of a conviction, that is, the conflict between a state convicting authority and a local jurisdiction over how to mitigate the effects of government expropriation of private property.
A case in point is when the Georgia Department of Transportation (GDOT) partially condemns the land on which a company operates, affecting critical elements of the property and requiring mitigation measures to maintain the profitability of the company or property. A mitigation plan may include relocating the business sign, restricting parking spaces, retrofitting building space, or replacing the landscape along a front buffer. The owner or operator must determine within the scope of the permit permits whether the reduction plan complies with the local building regulations and signs. Not only can the applicable local requirements conflict with the mitigation plan, but they can also have further effects on the property by removing the grandfathering rules on the property or requiring updates to current standards. These conflicts and the local approval process can add additional damage to the owner that was unintentional in the original recording.
OCGA §32-3-32 seeks to address this unintended consequence by requiring that the local jurisdiction apply the “minimum degree of deviation” to the mitigation plan as part of the approval. If the local jurisdiction refuses to do so, it must instead compensate the convicting authority for any resulting damage.
Practical implications
On the surface, the law adequately helps owners cope with property-related changes and circumstances over which they have no control and which they have not caused. In practice, however, the law raises more questions than it answers, and shifts the burden of those who have to adapt and pay for public extraction of private property. It essentially allows GDOT to determine how counties and municipalities apply their codes and hold them responsible for damage caused by GDOT.
What if the prosecuting authority is in the same county or town as the local jurisdiction? In this case, there may be direct conflicts between different bodies or councils at the local level. For example, a district ministry of transport could control the decision of the district office for development and appeals.
OCGA §32-3-32 also raises numerous questions about how the property owner process should work, with a set of “If X, then Y, but if Z, then who knows?” The law refers to the mitigation plan as “Documentation presented to a property owner by the ordering authority that reveals a suggested cure for an alleged damage.” Are only the plans recognized that have been drawn up and provided by the convicting person? More often, a property owner has their own plan because they best understand what needs to happen on site in order to remain viable. Does the convict need to approve the mitigation plan before submitting it to the local jurisdiction? This unusual move is not required under Georgian law to qualify for compensation.
Even if an owner and GDOT agree on the “plan,” is it that easy to send to the local jurisdiction and get a stamp of approval? Does the property owner need to go through the normal development process for comments, submissions, changes, and a final decision? What if that process is different for each local Georgia jurisdiction, creating a difficult patchwork for property owners? If the “minimum degree of variance” is applied, does it mean full approval or unchanged approval of the plan? Or can the local jurisdiction require additional changes to the remaining property, which in turn cause more costs and damage to the owner?
In addition, local jurisdictions typically have character codes enforced, separate from their zone and development code. If the OCGA does not specifically identify §32-3-32 signage in its language, can an owner expect the same “minimum grade” to be applied to an application for the relocation of an already non-compliant sign?
Perhaps the most important thing is the enormous uncertainty for an owner if a city or a district refuses the “minimum degree of deviation” and thus refuses to approve a reduction plan. Does the damage need to be automatically determined and paid to the owner by the local jurisdiction? Who determines the amount of damage and how can it be divided among other damage caused by incurable consumption? Is the original convict still responsible? Does the property owner need to file a separate reverse conviction lawsuit in order to receive compensation?
The need for additional guidance
The full effect of OCGA §32-3-32, whether positive or negative or in any combination, on property owners, local jurisdictions and sentencing authorities remains unclear. Aside from practical application, there are many constitutional and legal issues, including whether the law applies retrospectively to all convictions, whether an authority can dictate to another authority, and whether it undermines the constitutional restriction on the exercise of pre-eminent powers. Since the law appears to be a good faith attempt to address a significant issue in the conviction process, it is likely that judicial guidance is needed in its application.
Christian Torgrimson and Ellen Smith are partners in the Parker Poe Atlanta office and a leader in Commercial Real Estate Women (CREW) Atlanta. You can be reached at [email protected] and [email protected].
