The Court stated that, in situations where the condemnor’s acts cause a diminished property value, the property at issue should be valued as of the date of the de jure taking without considering the loss of value caused by the threat of condemnation. This was more thoroughly explained as follows:

In such cases where true condemnation blight is present, the claimant may introduce evidence of value prior to the onslaught of the ‘affirmative value-depressing acts’ of the authority and compensation shall be based on the value of the property as it would have been at the time of the de jure taking, but for the debilitating threat of condemnation. This, in turn, requires only that there be present some proof of affirmative acts causing a decrease in value and difficulty in arriving at a value using traditional methods.

Thus, when damages are assessed on the claim for the de jure appropriation, the claimant’s property should be evaluated not on its diminished worth caused by the condemnor’s action, but on its value except for such ‘affirmative value-depressing acts’ of the appropriating sovereign. This, it appears, would provide adequate and just compensation Id. at 257-58 (citations omitted).



The mere threat of a condemnation proceeding will not entitle a condemnee to claim that property was condemned at a date earlier than that of the de jure taking. But if a party with the power of eminent domain prevents a claimant from deriving a beneficial use from property, then there will be a de facto taking.

In Matter of Keystone Assoc. v. Moerdler, 19 NY2d 78 (1966), a statute created a de facto taking when it interfered with a property owner’s right to build or improve property. In that case, the property owner and its tenant were precluded from demolishing and constructing a new office building on property that formerly housed the Metropolitan Opera Association. The preclusion derived from a statute that was passed with the sole intent to preserve the opera house. The statute delegated the power of eminent domain to a private corporation. It also permitted the New York City Superintendent of Buildings to refuse a demolition permit for 180 days if the private corporation deposited $200,000. The Court of Appeals affirmed the lower court decisions that held that the deprivation constituted a taking of property for which just compensation must be paid. It also concluded that the statute improperly sought to place a limit on the amount of just compensation.

‘Ward v. Bennett’

In a more recent case, Ward v. Bennett, 214 AD2d 741 (1995), the Appellate Division, Second Department, decided that a landowner established a prima facie de facto taking by the city of New York when the city refused to grant the owner a permit to build a one-family home. Under General City Law §35, the city had 10 years to condemn certain property after it filed a map in 1944 outlining the lines of a street. If it did not initiate condemnation proceedings to create that street within that time, it was required to grant a building permit. A prima facie de facto taking was established because the city did not grant a building permit 50 years after the filing of the map.

One should be aware that a de facto claim should be asserted as soon as the claim arises. This is because de facto takings can be time-barred. Carr v. Fleming, 122 AD2d 540 (4th Dept. 1986).

We previously explained that most property owners will be reluctant to invest in property that is likely to be condemned. But there are some situations where the opposite is true. A property owner might insist on going forward with planned improvements despite the possibility of condemnation when property is vacant or partially improved. There is no great mystery behind the owners’ motivation. An improved property might fetch a greater condemnation award as compared to vacant property. At least one court referred to the practice of rushing to complete construction as “house planting.” Vitale v. State of New York, 33 AD2d 977 (4th Dept. 1970). And, in the absence of bad faith, it does not appear to be specifically prohibited. Id.

‘East Hampton’ Case

In Matter of Town of East Hampton [Windmill II Affordable Housing Project (9 Parcels)] (Three P. Corp.), 44 AD3d 963 (2d Dept. 2007), for example, a condemnation claimant sought compensation for an incomplete improvement even though the condemnor took the position that the improvement should be disregarded because it was made in bad faith.

Our firm represented the condemnor, the town of East Hampton. The condemnor’s allegation of bad faith rested on the sole fact that the owner made improvements even though it knew that the property was going to be condemned. The trial court’s (Judge John C. Bivona) award of just compensation included payment for the partially built improvement. On appeal, the Appellate Division, Second Department affirmed and explained that:

Although the claimant knew, before making improvements upon the property, that the Town of East Hampton had plans to condemn the property, such knowledge, without more, was insufficient to establish that the improvements were constructed in bad faith. Id. (citations omitted).