(a) Upon petition of any party to the proceeding, the court in which the proceeding is brought shall specially set for hearing the issue of whether any hazardous material is present within the property to be taken.
§ 1263.720.Duty of Court Upon Determination that Hazardous Material Present Within Property
Title 7. Eminent Domain Law · Chapter 9. Compensation · Article 8. Remediation of Hazardous Materials on Property to be Acquired by School Districts · Enacted 1995 · no amendments on record · Last verified July 29, 2026
In one sentenceSection 1263.720 lets any party petition for a hearing on whether hazardous material is present on property being condemned by a school district, and if the court finds it is, directs the court to identify the required action and its cost, appoint a trustee to hold funds withheld from the compensation award, and set up payment to whoever performs the cleanup.
Full Text of § 1263.720
(b) If the court determines that any hazardous material is present within the property to be taken, the court shall do all of the following:
(1) Identify those measures constituting the required action with regard to the hazardous material, the probable cost of the required action, and the party that shall be designated by the court to cause the required action to be performed.
(2) Designate a trustee to monitor the completion of the required action and to hold funds, deducted from amounts that are otherwise to be paid to the defendant pursuant to this title, to defray the probable cost of the required action.
(3) Transfer to the trustee funds necessary to defray the probable cost of the required action from amounts deposited with the court pursuant to Article 1 (commencing with Section 1255.010) of Chapter 6 or pursuant to Section 1268.110. In the case of any payment to be made directly to the defendant pursuant to Section 1268.010, the plaintiff shall first pay to the trustee the amount necessary to defray the probable cost of the required action, as identified by the court, and shall pay the remainder of the judgment to the defendant. The total amount transferred or paid to the trustee pursuant to this paragraph shall not exceed an amount equal to 75 percent of the following, as applicable:
(A) Prior to entry of judgment, the amount deposited as the probable amount of compensation pursuant to Article 1 (commencing with Section 1255.010) of Chapter 6.
(B) Subsequent to entry of judgment, the fair market value of the property taken, as determined pursuant to Article 4 (commencing with Section 1263.310). If the amount determined as fair market value pursuant to that article exceeds the amount deposited pursuant to Article 1 (commencing with Section 1255.010) of Chapter 6, that excess shall be available, subject to the 75 percent limit set forth in this paragraph, for transfer to the trustee for the purposes of this paragraph or for reimbursement of the plaintiff for payments made to the trustee pursuant to this paragraph. If the amount determined as fair market value pursuant to Article 4 (commencing with Section 1263.310) is less than the amount deposited pursuant to Article 1 (commencing with Section 1255.010) of Chapter 6, the plaintiff shall be entitled to a return of amounts thereby deposited, a judgment against the defendant, or both, as necessary to ensure that the total amount transferred or paid to the trustee pursuant to this paragraph not exceed an amount equal to 75 percent of the fair market value of the property taken, as determined pursuant to Article 4 (commencing with Section 1263.310).
(4) Establish a procedure by which the trustee shall make one or more payments from the funds it receives pursuant to paragraph (3) to the party causing the required action to be performed, upon completion of all or specified portions of the required action. Any amount of those funds that remains following the completion of all of the required action shall be applied in accordance with the provisions of this title that govern the disposition of the deposit amounts referred to in paragraph (3).
(c) The actual and reasonable costs of the trustee incurred pursuant to this section shall be paid by the plaintiff.
Plain-English Summary
This section is the engine of the school-district hazardous-materials scheme. Any party to the proceeding can petition to have the court specially set a hearing on one question: whether hazardous material is present within the property being taken. That hearing has to happen -- the statute does not leave it to the court's discretion once a party asks.
If the court finds hazardous material present, four things follow. First, the court identifies the required action needed to address it, the probable cost of that action, and which party will be designated to carry it out. Second, the court appoints a trustee whose job is to monitor completion of that required action and to hold money set aside from what would otherwise be paid to the defendant. Third, the court transfers to that trustee the funds needed to cover the probable cost, drawn from money already deposited under Article 1 of Chapter 6 or under § 1268.110, or, when payment would otherwise go straight to the defendant, withheld from that payment before the balance goes out. A cap runs through all of this: the total transferred to the trustee cannot exceed 75 percent of the deposited probable compensation before judgment, or 75 percent of the property's fair market value as later determined, after judgment -- with true-up rules if the eventual fair-market-value finding comes in higher or lower than what was deposited. Fourth, the court sets up a procedure for the trustee to pay out the held funds, in one or more installments, to whoever is performing the required action, as portions of the work are completed; anything left over once the work is finished gets folded back into the case the same way the rest of the deposit is handled.
The trustee does not work for free, either -- subdivision (c) puts the trustee's actual and reasonable costs on the plaintiff.
Frequently Asked Questions
Who can ask the court to determine whether hazardous material is present?
Any party to the proceeding may petition for a special hearing on that question.
What does the court do if it finds hazardous material on the property?
It identifies the required action and its probable cost, designates the party to perform it, appoints a trustee, transfers or withholds funds (capped at 75 percent of the relevant value), and sets up a phased payment procedure.
Is there a limit on how much of the compensation can be diverted to the cleanup fund?
Yes -- the total cannot exceed 75 percent of the deposited probable compensation before judgment, or 75 percent of the fair market value as later determined after judgment.
Who pays for the trustee's own costs?
The plaintiff, under subdivision (c).
What happens to leftover trust funds once the cleanup is finished?
They are applied under the same provisions of this title that govern disposition of the underlying deposit.
Amendment History
Repealed and added by Stats. 1995, Ch. 247, Sec. 2. Effective January 1, 1996.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 29, 2026.
· Official source
Also known as: hazardous material trustee eminent domain californiaschool district contamination condemnation californiacleanup cost fund condemnation california