by Trent Appleby
DFW is one of the fastest growing metropolitan areas in the United States. With population growth comes an increased need for infrastructure such as roads, highways, pipelines and transmission lines. As a result, more and more landowners are faced with takings of all or a portion of their land.
Eminent Domain and “Adequate Compensation”
While Texas landowners cannot stop an entity with eminent domain power from taking their land, the landowner is entitled to receive “adequate compensation” for the taking. Landowners and the condemnor rarely agree as to what constitutes “adequate compensation.” Thus, it is important for landowners to be aware of the condemnation process and their right to challenge the condemnor’s offer. It is also important to review the easement agreement connected to the taking and limit the condemnor’s rights with respect to the easement area as well as to the remainder of the property.
Because the condemnor is required to obtain a written appraisal prior to the commencement of the condemnation proceeding, it is also necessary that the landowner retain an appraiser to opine as to what constitutes adequate compensation to the landowner as a result of the taking. Adequate compensation is determined based upon the fair market value of the “highest and best use” of the property.
For example, if the property is located in a commercial zoning area, the highest and best use is likely commercial development regardless of whether the property is used for commercial purposes at the time of the taking or even vacant. Additionally, if the condemnor is only taking a portion of the property, the landowner is not only entitled to compensation for the value of the portion of the property taken, but also “remainder damages.”
Remainder damages are calculated by considering the damages to the remainder of the property (the portion of the property not subject to the taking). For example, if the taking results in loss of access or impedes the ability to build on the property, then the landowner is also entitled to remainder damages. Keep in mind – the condemnor’s goal is to take your property at the lowest possible cost to the condemnor.
If the condemnor and landowner can’t agree on values
If negotiations prove futile (as is often the case), a Special Commissioners’ Hearing follows. Special Commissioners are appointed by the court and consist of three “disinterested” property owners who reside in the same county as the property being condemned. While Special Commissioners are tasked with assessing damages fairly and impartially, this typically is not the case. Special Commissioners are appointed by the court and receive compensation for their services. Thus, in most cases, the Special Commissioners are biased in favor of the condemnor as they want to be appointed to future cases (and receive money for their services).
The Special Commissioners Hearing is an administrative proceeding and the landowner has the right to object to the Special Commissioners’ award. If the landowner files an objection, the proceeding becomes judicial and the court tries the case in the same manner as other civil matters. This is usually the best way to make sure you receive the highest award possible.
In addition to making sure you are adequately compensated for the taking, it is also important to review and negotiate the terms of the easement agreement whereby the condemnor is granted certain rights with respect to your property. The landowner can limit the condemnor’s rights by negotiating specific provisions contained in the easement agreement such as:
- Requiring a specific easement only to a portion of the property; not a blanket easement;
- Reserving the landowner’s right to use the surface of the easement area;
- Limiting the condemnor’s right to access the easement area;
- Ensuring the condemnor repairs any damages to the property;
- Designating what portions of the property the condemnor may access;
- Determining remedies if the condemnor violates the easement agreement;
- Including liability and indemnification provisions;
- Prohibiting the condemnor from assigning the easement; and
- Specifying when the easement will terminate.
If a condemnor seeks to take your land, it is important to make sure you not only receive the highest award possible, but also protect your rights while limiting the rights of the condemnor with respect to your property.
We can help you with that.
Contact Trent at (469) 916-7700 ext. 113, or via email him via his contact form.
when it matters ™
About Trent Appleby
Trent Appleby focuses his practice on commercial and corporate transactions, real estate transactions, and corporate formation and governance matters. He also has experience in litigation, with an emphasis on commercial and residential construction litigation.Learn more about Trent…