Private property rights are a quintessential part of our legal system. Property rights guarantee each landowner the right to use, exclude, transfer, alienate, and possess property. These rights are not absolute however, and in special circumstances the government may have a right to condemn your private property for a public use under the doctrine of eminent domain. Eminent domain is defined as the taking of private property for a public use for just compensation to the landowner. So, what happens if you are approached by a condemning entity about your property? What are your rights as a landowner?
To begin, who has the legal authority to take private property? Private property may only be taken by a governmental entity, or a private entity if they have the legal authority to do so.
In either of those cases, the taking must effectuate a “public purpose.” Public purpose is defined as the promotion of general welfare for all citizens. This means that the purpose must directly benefit the public. In Texas, eminent domain proceedings are limited in that property cannot be taken to enhance tax revenues or foster economic development.
Second, just compensation must be provided to the landowner for any property that is taken by a condemning entity. Just compensation includes the fair market value of the property at issue and may also include certain damages. Damages may be available if the remaining property’s fair market value is decreased by the taking itself, or by the way the condemning entity will use the property.
The takings process is first initiated by requiring the condemning entity to provide the landowner with a copy of the “Landowner’s Bill of Rights.” This notice must be delivered to the landowner either before or at the time the entity represents their ability and intention to proceed with a taking. If the condemning entity does not follow the above process, they must send a copy of the bill of rights to the last known address of the person that most recently paid taxes on the property. Either of the above processes must be completed by a minimum of seven days before the condemning entity makes a final offer to obtain the property.
The offer made by the condemning entity must be a “bona fide offer.” The Texas Property Code details what constitutes a bona fide offer, but generally it is when either: an initial offer is made in writing to a property owner, or a final offer is made in writing to the property owner. A bona fide offer can also be shown where the final offer is equal to or greater than the amount of the written appraisal obtained by the entity. The condemning entity is required to disclose to the landowner a copy of the written appraisal from a certified appraiser, as well as a copy of the deed, easement, or other instrument conveying the property sought to be acquired. The landowner has the right to conduct their own appraisal, discuss with others, and ultimately accept or reject the offer from the condemning entity.
What happens if the landowner and the condemning entity do not agree on the value of the property at issue? If agreement cannot be reached, condemnation proceedings will be initiated. This is the legal process that allows condemning entities to take property. The claim will be adjudicated by a special commissioner’s hearing in the county where the property is located. Three special commissioners will be chosen to help value the property. These commissioners are other property owners in the county that have no interests or bias and are otherwise uninvolved in the outcome of the proceeding. The landowner must provide the condemning entity with their appraisal reports either ten days after they receive the report, or three days before the hearing, whichever is earlier. The landowner is entitled to hire and discuss the matter with any applicable professionals, including appraisers, real estate developers, or attorneys. The special commissioners will take the appraisal reports and other valuation documents from both sides and issue an award. The award is not only important to give a valuation of the property, it is also used to decide who pays the costs of the condemnation proceeding. If the award is greater than or equal to the landowner’s valuation, the condemning entity will be responsible for the court costs. Conversely, if the award is less than or equal to the condemning entity’s valuation, the landowner will be responsible for the costs.
If the landowner does not agree with the award, they are entitled to appeal by filing a written timely objection with the court. The landowner will have the right to a trial, and a choice of a bench or jury trial. Should the condemning entity decide they no longer need the property at issue and file a motion to dismiss, the landowner is entitled to recover reasonable and necessary attorney’s fees, appraisal costs, and any other expenses incurred in defending the claim.
Should the condemnation proceedings result in a taking, the condemning entity must pay the value decided by the special commissioners, either to the court’s registry, or directly to the landowner. The landowner has the right to withdraw funds from the court’s registry. Only after payment will the condemning entity gain possession of the property.
Also, the landowner may be entitled to reimbursement if they are displaced from their residence or place of business. The reimbursement may include reasonable expenses incurred for moving expenses or the cost of relocating a business to a new area. Texas law limits the total amount of relocation costs to the fair market value of the property being relocated. The law further limits the amount of moving costs to the amount that a move would cost if it were within 50 miles.
If you have been contacted by a governmental entity about a taking of your property or would like help understanding your rights in an eminent domain proceeding, call us to set up an appointment today.