If the land you are renting or leasing for raising crops or livestock has been selected for condemnation by an entity with eminent domain authority, what are your options? The law requires that the owner of the property be paid a fair market value for the loss of their land. Depending on the language in your lease agreement, you may be entitled to compensation as well.
When a property owner leases their land to a tenant, both parties rarely consider the possibility that all or part of the property many be taken from the owner through eminent domain proceedings. Overlooking this possibility can prove to be a costly mistake.
Does Your Lease Agreement Have A “Condemnation Clause” In It?
How do you know if you are entitled to compensation during a condemnation proceeding? First, read your lease agreement. If your lease agreement contains a condemnation clause, it will typically govern the rights of the parties with respect to compensation.
A condemnation clause spells out the respective rights of the landlord and tenant when there is a condemnation of the property that is the part of the lease. Depending on the language, the condemnation clause can allow a landlord to terminate a lease if the leased property is lost through an eminent domain action. The clause will typically spell out each parties’ rights with respect to any compensation awarded.
However, if your lease is in effect at the time that the property is condemned, and your lease doesn’t contain a condemnation clause, then you will probably be able to seek compensation under Texas law. This can include compensation for your leasehold interest as well as relocation costs.
Consider the Possibility of Condemnation Before You Sign the Lease
Landlords and tenants should always work together to resolve any misunderstandings. Cooperation between the two parties could reap benefits for both sides during negotiations, including a larger settlement from the condemning entity.
Having a highly detailed, written and signed lease agreement is the best way to protect the rights of the two parties. The services of an experienced Texas property rights attorney can be invaluable in coming up with an agreement that best serves both landowner and tenant.
If a landlord does insist on including a condemnation clause into the lease agreement, make sure the clause defines when and how the lease agreement can be terminated, who has the right to terminate the lease, and which party has a right to any damages or awards.
Also, it would be a good idea to file a memorandum of the lease in the county deed records so that when a condemning entity does a title search they will be aware of your interests in the property.
We Protect the Property Rights of Texas Farmers and Ranchers
If you are an agricultural tenant whose livelihood is in jeopardy due to an eminent domain action, it’s a good idea to seek experienced legal representation to protect your rights during the condemnation proceedings.
The Texas eminent domain attorneys at Dawson & Sodd have been protecting the rights of both landowners and their tenants for over a century. We’re dedicated to getting both parties the fair and total compensation they are due for their losses. Before you accept any offer from an entity that claims to have eminent domain authority, contact Dawson & Sodd.