A legal action by a property owner claiming government action has effectively taken their property without formal condemnation.
Why Inverse Condemnation matters on the exam
This term belongs to Land Use Controls. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Inverse Condemnation
Every Freehold question shows why the right answer is right — and cites its source.
A city rezones a parcel from multifamily residential to single-family residential, reducing the density permitted on the site. This action is best described as:
Downzoning
Spot zoning
A variance
Inverse condemnation
Show answer & explanation
Downzoning — Downzoning reduces the intensity or density of use allowed on a parcel, such as changing a multifamily district to single-family, and is valid if applied consistently with the comprehensive plan.
Source: PSI National Real Estate Exam Content Outline §2 Land Use Controls
When a government regulation is so restrictive that it effectively deprives an owner of all economically viable use of the land without formally condemning it, the owner may sue the government for:
Escheat
Adverse possession
Inverse condemnation
Quiet title
Show answer & explanation
Inverse condemnation — Inverse condemnation is an action brought by a property owner alleging that government action amounted to a taking requiring just compensation, even though no formal condemnation proceeding was filed.
Source: PSI National Real Estate Exam Content Outline §2 Land Use Controls
A county enacts a regulation that prohibits all development on a privately owned parcel to preserve it as open space, leaving the owner with no economically beneficial use of the land and no compensation offered. The owner's most appropriate legal remedy is to:
Apply to the county for a certificate of occupancy
Record a restrictive covenant against the property
Request that the parcel be formally annexed into a neighboring municipality's boundaries instead
File an inverse condemnation action seeking just compensation for a regulatory taking
Show answer & explanation
File an inverse condemnation action seeking just compensation for a regulatory taking — When regulation eliminates all economically viable use of land, it may constitute a regulatory taking, entitling the owner to pursue an inverse condemnation claim for just compensation.
Source: PSI National Real Estate Exam Content Outline §2 Land Use Controls
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