Understanding Eminent Domain
When receiving a notice that property is about to be seized, landowners are often confused about the process ahead and what rights they have. Here we will answer some of the most common questions we receive regarding eminent domain and the condemnation process. Every case and every property is different, so the general answers provided here may not apply to your situation. As a result, the general answers provided here are not to be construed as legal advice about your particular case.
The words “eminent domain” and “condemnation” are often used interchangeably. Eminent domain is the inherent power of the state and federal governments (and certain private companies acting under their authority) to take private property for public use. “Condemnation” of property has several distinct meanings. Condemnation is a formal act by the authority with eminent domain power to transfer title from a private property owner to the condemning party. This should not be confused with the exercise of police power to “condemn” property for failure to maintain it.
Read more about eminent domain and condemnation:
What is Condemnation?
What is Eminent Domain?
Texas landowners are protected under both the United States Constitution and the Texas Constitution.
The U.S. Supreme Court has explained that “[t]he power of eminent domain is essential to a sovereign government.” United States v. Carmack, 329 U.S. 230, 236 (1946). The Court noted that eminent domain must be “received as a postulate of the constitution” in order to invest the U.S. government with “full and complete power to execute and carry out its purposes.”
The Fifth Amendment to the U.S. Constitution places important limitations and protections on the use of the government’s power. The Fifth Amendment states, “nor shall private property be taken for public use, without just compensation.” According to the Court, the amendment’s text “is a tacit recognition of a preexisting power to take private property for public use, rather than a grant of new power.” The Fifth Amendment protects property owners by forcing the federal government to pay “just compensation” for the property taken and by permitting the federal government to condemn private property only when it does so for a “public use.”
Likewise, Article I, Section 17 of the Texas Constitution guarantees property owners “adequate compensation” when their property is “taken, damaged, or destroyed” for public use. Article I, Section 19 also provides that no Texan can be deprived of property except by the due course of the law.
Read more about eminent domain and the Constitutions
The traditional answer is that individual landowners could refuse to sell their property, or consent to selling it only at unreasonably high prices, making it difficult or impossible for the condemning authority to build certain infrastructure or other public projects that would benefit the public at large.
Condemnation is often used to give the condemning authority a huge tactical advantage over normal buyers of property when negotiating a sale price. An owner dealing with a condemning authority can no longer say “I don’t want to sell,” or “I won’t sell at your low price.” If he could say those things, the sale price might be higher because of negotiation. Instead, in condemnation, once the condemning authority makes its final written offer before filing suit, the landowner is faced with only painful choices—either accept an offer that is too low, or hire an attorney to help fight for a more reasonable price. Condemnors know their final offers put landowners to a difficult choice. And these condemnors want to pay the cheapest price for what they are taking. Condemning authorities know that many landowners who are not experienced in condemnation simply give up and take that low-ball offer. We have seen as many as 70% to 90% of inexperienced landowners on projects accept low offers without even talking to experienced condemnation attorneys, only to later learn that their neighbors achieved much better results by hiring experienced attorneys.
Typically, the government – federal, state, county, municipal, water districts, and school districts – can exercise the right of eminent domain. Public utilities may also be able to use private property for power lines, pipelines and other alleged ‘public uses.’
Read more about who can take private property through Eminent Domain in Texas.
The most common condemnation projects are the construction or expansion of infrastructure such as electric transmission lines, most oil or gas pipelines, water pipelines, roads, highways, municipal infrastructure, rail lines, lakes, parks, and public buildings. As Texas’ population continues to grow, the number of new projects should continue to rise.
Read more about common public use reasons for taking land through condemnation in Texas.
All projects are different and vary greatly in scope. Typically, the entity with condemnation power (the “Condemnor”) plans for a public project and determines whether it may need private land for completion of the project. The specifics of the project, particularly its exact location, may take months or years to finalize. In some situations, landowners have the opportunity to provide input on the final location of the project by participating in proceedings conducted by the Condemnor. Once the exact location of the project is determined, the Condemnor must make a formal declaration that, due to public necessity, certain property rights must be acquired from property owners in order to complete the project. The Condemnor is required to notify all property owners whose land will be taken for the project. The Condemnor usually orders a real estate appraisal of the entire property and the specific property rights sought by the Condemnor. A land acquisition agent for the Condemnor uses the appraisal amount to make an offer to purchase the property needed for the project. That is all that is needed to satisfy the requirement that the Condemnor negotiate “in good faith” with the landowner.
The “offer” may have (or claim to have) a time limit that requires the landowner to respond by a particular date to add pressure to the landowner. The landowner can accept or reject the offer. The offer letters sent by condemning authorities can be confusing and intimidating to property owners who do not understand the condemnation process. They also typically make no effort to notify the landowner of the scope of the various impacts to the landowner’s remaining property from partial takings for projects such as power lines and pipelines.
Read more about the eminent domain condemnation process in Texas
No. Condemning authorities often use professional agents (really salesmen) to obtain land for public projects. They prefer that you reach a low-ball deal with them before they have to file a condemnation case, but you do not have to accept their offer or their terms. If you do not reach an agreement with the condemning authority, they will have to initiate condemnation proceedings to take your property rights. Regrettably, we have seen situations when landowners have lost their property to Condemnors who would not have followed through with proceedings – or who may not have had the power of eminent domain at all. If the landowner had simply refused to deal with the condemning authority, they might have been able to keep their property.
Read more about whether you have to accept the final offer presented.
Assuming the offer is rejected, the Condemnor will file a lawsuit against the landowner in order to acquire the property rights it seeks. Rather than immediately launch into full-scale litigation, the next step is a special commissioners’ hearing, usually presided over by three court-appointed commissioners. The special commissioners are supposed to be disinterested property owners who reside in the county where the condemnation takes place. The commissioners set the amount the condemning authority must deposit before it can take possession of the property to build its project. Unfortunately, because the commissioners are paid for their work, and because the condemning authority can object to any commissioner serving in a particular case, our experience tells us that the special commissioners tend to favor the condemning authority in many instances.
The Condemnor generally coordinates with the commissioners to set up the special commissioners’ hearing, building a good relationship with them at the same time. Texas law requires that each party be given written notice of the hearing date. In this informal administrative proceeding, both the Condemnor and the landowner can submit evidence supporting their positions on fair market value.
At the hearing’s conclusion, a Special Commissioners’ Award will set out the commissioners’ opinion of the deposit amount, which is quite often the same or close to what the Condemnor wants it to be. To claim possession of the property the Condemnor must then deposit that amount with the court. The landowner has the option to withdraw the award, but should consult an attorney beforehand because significant legal rights to contest the right to take your property can be waived by this decision.
Either side can object to the commissioners’ findings before a critical legal deadline. In doing so, the case will be “appealed” to the trial court and will move forward in a manner similar to other civil lawsuits. In Texas state court eminent domain lawsuits, the landowner has the right to a jury trial on most issues.
We strongly recommend that a landowner consult with an experienced eminent domain lawyer before attending a hearing.
There are multiple good and strategic reasons to not attend the hearing. These reasons include that it is nearly impossible to correctly understand all of the impacts a taking can have on a property before the hearing and without obtaining information from the condemning authority or from experts—and there is little opportunity to fully analyze a taking prior to a commissioners’ hearing because condemning authorities do not have to provide the landowner details about the project in the early phases. As a result, without sufficient information about the taking and its impacts, it is very difficult to correctly estimate compensation at the hearing, especially when one attempts to determine compensation without the assistance of experts. And because the condemning authority can appeal the award if the landowner is successful in the hearing, it often turns out to be a wasteful exercise in terms of expending time and money.
Read more about refusing the government’s first offer to buy your property
Sometimes, yes. The landowner may argue that the Condemnor lacks the power of eminent domain, that the taking is not for a “public use,” that the taking is not a public necessity, that the route of the project in extreme circumstances is arbitrary and capricious, or that the Condemnor has failed to comply with legal requirements in attempting to take the property. These are often difficult claims. The common issue in most condemnation cases—whether the Condemnor’s compensation provides “adequate compensation” for the taking—is not itself a valid basis for preventing a taking. It is important to consult with an attorney about the potential methods of preventing the Condemnor’s taking.
Read more about preventing your property from being taken through eminent domain
Once the Condemnor has established its legal authority to condemn the property, most disputed condemnation cases boil down to one main issue: money. Our constitutions entitle a property owner to “just” and “adequate” compensation for condemned property. Adequate compensation is generally considered to be the difference between the market value of the property before and after the taking, considering the property and rights taken and any damages to remaining land not taken. “Market value” is the price a willing buyer would pay to a willing seller. Adequate compensation for lost property or damages to remaining land after the taking is influenced by the type of “taking” that occurs. When an entire property is condemned, the landowner is entitled to receive the market value for the entire property. But if only a portion of the property is condemned, the landowner is compensated for the difference between (1) the market value of the whole property before the taking and (2) the market value of the remaining property after the taking. This allows the landowner to be compensated for both the value of the property and rights taken and also any damage to the value of the landowner’s remaining property after the taking.
Learn more about just and adequate compensation in a Texas eminent domain case
Mostly, yes. While there are always exceptions, in our experience most offers are too low. There can be several reasons for this, including honest mistakes. But why would the condemning authority start their negotiations with a high price, when they want to take your property for a low price? Once the landowner hires experienced attorneys and an appraiser or appraisers, real negotiations can begin with both parties aware of the strengths and weaknesses of their respective contentions. Most condemnation cases settle before trial, but usually not until after the detailed work is completed.
– How many multi-million dollar jury verdicts or settlements have you obtained?
– If I hire your firm, who will work on my case?
– Do you represent any condemning authorities, requiring you to take positions contrary to landowners’ best interests?
– Do you devote all of your practice to the area of eminent domain and condemnation for landowners?
– Have you handled any cases similar to mine?
– What have your past results been?
Read more about what to ask when choosing an eminent domain attorney
– Should I talk to the government when they call or arrive on my doorstep? What should I avoid saying?
– Should I ever give my adversary any information?
– Can I convince the government not to take my land, or stop them from doing so?
– Can I change the location or route of the project on my property?
– How will my property be valued?
– What are the types of compensation to which I am entitled?
– What expert witnesses do I need? Who are the best? How will the planned taking affect the property I have left?
– What should I avoid doing to safeguard my rights?
– How can I maximize my compensation? What should I expect to recover?
– What expenses should I expect?
– Do I have to pay legal fees even if I don’t recover more than my initial offer? Can I recover my legal fees and expenses?
The answer is there can be harm if you do not at least talk to an experienced attorney about potential pitfalls before beginning negotiations. In general, the earlier you get advice from experienced counsel, the better off you will be. Condemnation rules are very complicated, and even most attorney landowners are not comfortable dealing with those rules without help from experienced counsel. If you are trying to negotiate your own deal, anything you say can impact your ultimate recovery. You may not fully understand (i) the rules about the highest & best use of your property that will dictate its value, (ii) appraisal rules that can hurt or help you, or (iii) all of the types of compensation you are entitled to recover. Condemnations have very real and permanent impacts on property, and without a thorough understanding of these, you may not comprehend the valuation impacts. We have talked to many would-be clients that call us when it is too late to fix a mess that could easily have been avoided with a little good advice. We have helped landowners by providing free coaching before they begin to negotiate for themselves.
Most property owners feel competent to negotiate for themselves, and many landowners would be competent if a condemnation was a normal real estate transaction. However, in condemnations there are issues a landowner needs to understand before talking to the Condemnor. Unfortunately, we cannot undo what has already been done. Given the complexity of condemnations and litigation appraisal rules, a landowner stands to benefit from talking to experienced counsel before beginning talks with the adversary—which is what Condemnors hope you don’t do. This is the purpose of their artificial ‘deadlines’ to negotiate in the early phases.
Read more about the importance of having an experienced legal representative in a condemnation proceeding.
Inverse condemnation refers to the taking of private property for public use without fulfilling the requirement of just and adequate compensation. Sometimes the government takes and uses property for public use without following the traditional condemnation process. In this instance, an individual may sue the government for the value of the property “taken, damaged, or destroyed.” There is a time limit by which an inverse condemnation case must be filed to be considered.
Read more about inverse condemnation claims.