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Inverse condemnation is a lawsuit brought by a property owner seeking compensation for land taken for a public use by a government entity with eminent domain powers. Eminent domain is the taking of private land for public use with payment of compensation by a government entity. Inverse condemnation actions are usually brought when the government has limited use of private land to an extent that the value of that land is greatly reduced, or where the government has allowed the public to make use of private land.
Inverse condemnation may be a direct, physical taking of or interference with real or personal property by a public entity. For example, inverse condemnation liability has been found due to flooding, escaping sewage, interference with land stability, impairment of access, or noise from overflying aircraft.
A claim of inverse condemnation may also arise from a “regulatory taking.” In such cases, a governemnt regulation is claimed to amount to a taking or damaging of property, such as overrly restrictive zoning regulations, denial of building or demolition permits, and burdensome conditions placed on development.