Properties are condemnable when they reach a point where repairs would far exceed market value or when the property has become an eyesore in a neighbourhood. While many condemned properties have been vacant for long periods, city, state and national laws must be followed before condemning any building.
In order for any city or municipality to remove a property from private custody, that property must be considered a blight. In other words, the city must provide substantial evidence that the property is in severe disrepair and is causing values in a neighbourhood to fall. If a court finds in favour of the city, ruling that a property is a blight, the city can invoke the right of eminent domain and claim the rights to the property. If the owner can be located, compensation for the property must be made, but if the owner is not able to be located, the city can take possession of the property.
The constitution states that any property reclaimed by the government for any purpose must offer the owner "just compensation." In today's real estate market, just compensation is equal to market value. Damage and repairs are factored in when establishing a market value baseline. The property does not have to be a blight in order to be condemned if the city opts to use it for a public purpose. It is up to the owner whether he accepts the compensation. If he does not, he can be forcibly made to accept by a court order if the property is a blight. If the property is not considered a blight, the owner can refuse the city's offer and remain owner of the property.
Considerations for Eminent Domain
The U.S. Supreme Court has ruled in favour of non-blighted properties being subjected to being condemned using eminent domain. One example is Kelo v. New London in 2004. In this particular case, the property was not a blight, but the local government invoked eminent domain to overtake the property and condemn it in order to allow a private entity to build on the property for the sake of economic development. This invocation of eminent domain sets a precedent for future scenarios in which homeowners can be removed from property for similar reasons.