Government’s have the power expropriate private property without the owner's consent, either for its own use or on behalf of a third party. Eminent domain is the term used in the United States to describe this power. Governments most commonly use the power of eminent domain when the acquisition of real property is necessary for the completion of a public project such as a road, and the owner of the required property is unwilling to negotiate a price for its sale. In many jurisdictions the power of eminent domain is tempered with a right that just compensation be made for the appropriation.

Some coined the term expropriation to refer to "appropriation" under eminent domain law, and may especially be used with regard to cases where no compensation is made for the confiscated property. Examples include the 1960 Cuban expropriation of property held by U.S. citizens, following a breakdown in economic and diplomatic relations between the Eisenhower administration and the Cuban government under Fidel Castro. U.S. nationals and corporations held vast amounts of Cuba's prime real-estate. Cuban authorities offered just compensation for US properties, as they had successfully done for Spanish, British and French properties when they nationalized private property in Cuba, for the common good. However, U.S. authorities refused, adhering to the notion that those properties are still privately owned by U.S. interests 46 years later.

The term "condemnation" is used to describe the act of a government exercising its authority of eminent domain. It is not to be confused with the term of the same name that describes the legal process whereby real property, generally a building, is deemed legally unfit for habitation due to its physical defects. Condemnation via eminent domain indicates the government is taking the property; usually, the only thing that remains to be decided is the amount of just compensation. Condemnation of buildings on grounds of health and safety hazards or gross zoning violation usually does not deprive the owner of the property condemned but requires the owner to rectify the offending situation.

The exercise of eminent domain is not limited merely to real property. Governments may also condemn the value in a contract such as a franchise agreement (which is why many franchise agreements will stipulate that in condemnation proceedings, the franchise itself has no value).

The Fifth Amendment to the Constitution requires that just compensation be paid when the power of eminent domain is used, and requires that the property be taken for "public use". These requirements are sometimes called the "takings clause." Most courts have used "just compensation" to be the fair market value of the condemned property. Over the years the definition of "public use" has expanded to include economic development plans which use eminent domain seizures to enable commercial development for the purpose of improving the community. Critics contend this damages personal property rights.

Public Use

There have been many court decisions attempting to define what constitutes an appropriate “public use” to justify the power of eminent dolman. The current rule on public use upholding the eminent domain power of state government was generally affirmed by Kelo v. City of New London, 125 S. Ct. 2655 (2005), though the justices recognized that the several states have the authority to pass statutes or state constitutional amendments further restricting eminent domain by either defining "public use" narrowly in their states or by granting property owners more rights than the federal Constitution if they so chose. Many have taken up the challenge, with Alabama, New Hampshire, and several other states passing temporary statutes as well as constitutional amendments to restrict eminent domain strictly to uses in which the property will be owned by a government entity.

Property-rights advocates contend that abuses of the exercise of these powers in the past require substantial safeguards to the public today, including requirements to force the various governments units that use eminent domain to document the need for it and allow the public access to and comment on the proceedings before the real property can be seized. Federal statutes require complete relocation programs to be administered by the various states in order to receive Federal participation in the costs of the improvements (often 80%) and further require full certification that the public process and benefits were offered to the claimants and that the benefits were actually paid to the correct claimants and displaces. The use of eminent domain has slowed dramatically nationwide as the full build-out of the Interstate System approaches and reflects the that the future will be for mostly projects of a local nature such as: schools, roads, and other local improvements. The extensive use of eminent domain for such purposes as economic development are currently under attack in many jurisdictions and there is a movement to pass state statutes to limit this use.

On June 23, 2006, President George W. Bush issued an executive order stating in Section I that the Federal Government must limit its use of taking private property for "public use" with "just compensation", which is also stated in the constitution, for the "purpose of benefiting the general public." He limits this use by stating that it may not be used "for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken."
ref  http://en.wikipedia.org/wiki/Emminent_domain