Buy the Farm and Minimum Compensation
As many of our readers already know, MN passed the ‘Buy the Farm’ act in 1973 which allows landowners to force utility companies to buy their entire property rather than forcing them to live beneath a high voltage transmission power line. This is an excellent legal remedy for some owners, but it’s not the best option for everyone. Read more about our position on Buy the Farm.
We also regularly discuss the Minnesota Minimum Compensation Statute, which was passed in 2006 and directs the condemning authority to pay damages sufficient for an owner to purchase a comparable property in the community, when the owner must relocate as a result of an eminent domain taking.
The Minnesota Supreme issued a decision in May that was favorable for property owners on a case that involved both Buy the Farm and Minimum Compensation. Read the decision here. This was a huge win for landowners in the state of Minnesota. The case presented the question of whether property owners who elect to require a utility to condemn their entire property under Buy the Farm are entitled to Minimum Compensation under Minn. Stat. 117 § 187 and relocation assistance under Minn. Stat. 117.52.
In this case, the district court concluded that these benefits are available, reasoning that the Legislature did not specifically exclude landowners making an election under buy the farm from receiving minimum compensation or relocation assistance. However, the district court did not address whether the property owners satisfied the specific requirements for obtaining minimum compensation or relocation assistance. The utility company appealed the decision, and the court of appeals subsequently overturned the district court’s decision explaining that minimum compensation is only available when an owner “must relocate”. Property owners in this case had the option to remain on their property, but instead chose to expand condemnation under Buy the Farm, and consequently are not entitled to damages under Minimum Compensation. Similarly, they explained that relocation benefits under Minn. Stat . 117.52 are for owners who are “displaced”, and in making an election to pursue Buy the Farm, the owners made a decision to relocate and therefore, are not entitled to relocation assistance.
The Minnesota Supreme Court heard the case and reversed the court of appeals decision. They explained that under Buy the Farm, if the owner requires the utility to condemn the entire property, “the easement interest over and adjacent to the lands designated by the owner….shall automatically be converted to a fee taking”. Furthermore, the statute provides that eminent domain utility proceedings “shall be conducted in the manner prescribed in chapter 117”-the eminent domain chapter. The Minnesota Supreme Court has consistently held that compensation in eminent domain takings under chapter 117 is determined at the time of taking and not the date the condemnation proceedings commence. Because Minimum Compensation is a form of compensation provided under chapter 117, entitlement to Minimum Compensation should be determined at the time of taking, not the date at which the utility files to commence condemnation. Because property owners have made an election under Buy the Farm by the date of taking, the property owners “must relocate”. They also conclude that property owners are able to obtain relocation benefits because they satisfy the 2 requirements of the federal statute which applies under Minn. Stat 117.52: they were required to move from their property as a direct result of the utility company’s acquisition of their property in fee, and the acquisition of their property was for a project undertaken by the utility company.