Taking the Takings Claim: A Policy and Economic Analysis of the Survival of Takings Claims after Property Transfers

Abstract

What ought to be the nature of an owner's right to pursue a regulatory takings claim when the regulation the owner seeks to challenge was in place when the owner acquired the regulated property? Some argue that an owner should not be entitled to challenge such a restriction as a Fifth Amendment taking if the property was already impaired by the regulation at the time the owner acquired it. Proponents of this view contend that allowing subsequent owners to challenge the enforcement of regulations, pre-dating their acquisition of title, and of which they had notice, would confer undeserved windfalls and reward land speculation to the detriment of the public fisc.

But this view of the non-transferability of the regulatory takings claim de-emphasizes the impact of the regulation on the property itself and focuses the takings inquiry at the wrong moment in time. Regulatory land use controls should be evaluated as restrictions on property and as unrelated to the ownership status of property. A rule that limits or bars successive owners from asserting the full takings claim effectively eviscerates the takings clause for many forms of regulatory takings. It allows governments to destroy valuable property interests without paying compensation.

This article emphasizes that the takings claim is a distinct and recognizable form of property that exists independent of the property owner. The takings claim is valuable private property and, as such, should be alienable in a manner consistent with other forms of private property; any other approach is tantamount to a judicial taking.

Keywords: Notice rule, takings, Fifth Amendment, property