Eminent Domain in Texas

by Brian L. Blakeley

Eminent domain is the right of a government to expropriate private property for public use, on the theory that the benefit that will accrue to the public at large is greater than the possessory interest of a private owner. Because of the high regard that Americans in general and Texans in particular place on private property rights, many thorny issues can arise in application of the doctrine.  At a minimum, these include the type and identity of entities that possess eminent domain authority; the circumstances under which the authority can be exercised; the procedures for exercising it; and the measure of compensation that must be paid to the landowner.

Authority

In Texas, the question of who can exercise eminent domain authority, and in what circumstances, is governed by a dizzying array of laws that are spread across the state constitution and numerous statutory codes in a fashion that defies simple explication.  These provisions provide eminent domain authority in the common situations that one might expect (as in, for roads and sewers) but also for a wide variety of other purposes, such as sports stadiums and common carrier pipelines.  If you are looking for a quick answer as to whether a particular entity has eminent domain authority, the solution is to consult the Texas Comptroller’s Online Eminent Domain Database (COEDD). 

All public and private entities authorized to exercise the power of eminent domain are required by law to report specified information to the Comptroller for the COEDD.  This information includes identification of the legal basis of the entity’s eminent domain authority.  The most important thing to remember about the database is that it is for informational purposes only: the Comptroller does not independently verify or certify submissions and does not have any legal authority to determine whether a reporting entity does in fact possess eminent domain authority.  This means that an entity is not insulated from a challenge to its eminent domain authority merely because it is identified in the database.  Similarly, the failure of an entity to report to the database subjects the entity to certain administrative penalties but does not negate or limit any eminent domain authority that otherwise exists.

Procedure

While the basis for eminent domain authority is scattered hither and yon throughout Texas law, there is a single, uniform set of procedures for how such authority may be exercised.  This is codified in Chapter 21 of the Texas Property Code. Chapter 21 mandates certain steps that the authority must take before proceeding to a formal condemnation proceeding and likewise provides the procedure for initiating and completing a condemnation action in court. Although the statute does not express it in this manner, it can be helpful to think of the process as involving a negotiation phase, an administrative phase, and finally a litigation phase.

Negotiation Phase

The negotiation phase under Chapter 21 requires that a landowner receive a minimum of two written offers from the condemning authority to purchase the property at issue and that the landowner receive certain specified information.  The initial offer must remain open at least 30 days before the authority is allowed to proceed with a “final” written offer, although in practice the time period between the two offers will often be much longer.  The final offer must remain open for at least 14 days. By law, the authority may not require that its offers be kept confidential.  The landowner is always free to discuss the offers with others similarly situated or with anyone else.

 The condemning authority must obtain a written appraisal of the subject property by a certified appraiser and furnish it to the landowner either prior to or contemporaneously with the final written offer.  This report must specify the value of the property being acquired and damages, if any, to the property owner’s remaining property. (If an appraisal exists at the time of the initial offer, it must be provided to the landowner at that time.) 

At least seven days before the final offer is made, the authority must provide the landowner with a mandated disclosure form called the “Landowner’s Bill of Rights”, which provides a general outline of the condemnation procedure under Chapter 21.   As a practical matter, this document is usually furnished with the initial offer.

The authority also must furnish a copy of the easement or deed conveying the property at issue.   This is the part of the process in which landowners without legal representation are at the greatest disadvantage because it is common for authorities to include provisions that are far more favorable to them than they could receive through condemnation.  For example, pipeline companies will frequently ask for a general easement, meaning that the company is free to place its pipeline anywhere on the property that it pleases and are likewise free to utilize the entire property for construction and maintenance purposes.

Once an authority has met the requirements of Chapter 21 (providing two written offers, an appraisal, the Landowner’s Bill of Rights, and the conveyance instrument) it is considered to have made a “bona fide” offer and may commence condemnation proceedings to acquire the property if it is unable to agree on terms with the landowner.

Administrative Phase

Formal condemnation proceedings are commenced by the authority filing a condemnation petition in district court (or in some cases, a county court at law) in a county in which some or all of the property is located. This petition is not treated as an ordinary lawsuit but as the starting point for an administrative procedure. The judge is required to appoint “three disinterested real property owners who reside in the county” to act as special commissioners.  It is the duty of the special commissioners to set and hold a hearing to determine damages to the landowner.  Significantly, this is all that the special commissioners are empowered to do. The commissioners have no authority to determine if the condemnation involves a valid exercise of eminent domain powers or any other legal issue.

In appointing special commissioners, the judge is required to give preference to persons agreed upon by the parties and is also required to give the parties "a reasonable period" in which to strike one appointee each.  A "strike" in this context means that the commissioner is automatically removed if objected to by a party, without the need for any explanation or basis.  If this occurs, or if a commissioner cannot serve for any other reason, the judge is required to appoint a replacement.

After appointment, the first order of business for the commissioners is to "promptly" schedule a hearing and provide written notice to all parties of the time and place. The date of the hearing must be at least 21 days from the day the commissioners are appointed and each party must be given at least 20 days notice of the hearing.  The location of the hearing is to be as near a practical to the property at issue or at the county seat.  The commissioners are granted authority similar to that of a county judge to subpoena witnesses and compel testimony but Chapter 21 is largely silent on the procedures to be followed during the hearing.  By way of example, the commissioners are required to "admit evidence" on damages to the property owner but there is no express requirement that they follow the Texas Rules of Evidence in doing so.  

The role of the commissioners is to assess actual damages to a property owner from a condemnation by considering the value of the property condemned; the injury to the property owner; the benefit to the property owner's remaining property; and the use for which the property is being condemned. If an entire tract is being condemned, the commissioners are required to assess damages based on the local market value of the property at the time of the hearing.

If only a portion of the property is condemned, the commissioners are to determine the damage to the property owner by estimating the extent of the injury and benefit to the property owner, including the effect of the condemnation on the value of the property owner's remaining property. In this regard, they must consider an injury or benefit that is peculiar to the property owner and that relates to the property owner's ownership, use, or enjoyment of it, including a material impairment of direct access. But, they may not consider an injury or benefit that the property owner experiences in common with the general community.

After the commissioners have completed their findings of damages, they are required to file a written decision with the court that appointed them. The clerk of the court is then required to provide written notice of the award to the parties. Either party may appeal the findings of the commissioners by filing written objections with the trial court.  The objections must be filed on or before the first Monday following the 20th day after the commissioners file their findings with the court (not 20 days from when the party receives notice of the findings!). If no party objects to the findings, the court is to adopt the findings as the judgment of the court.

Litigation Phase

By filing timely objections with the trial court, a party earns the right to a "trial de novo" on all issues in the court in which the action is pending.  This means that, with one critically important exception, the legal process begins anew and a landowner may re-litigate the issue of damages as well as raise any other issues, such as the validity of the condemnation authority at issue.

The critical exception is that while all legal issues remain alive, the status quo is flipped and the condemning authority is given possession of the property pending the outcome of the litigation.  This rule has the obvious purpose of preventing public projects from being endlessly stalled in the courts, but it can cause irreparable harm to someone  off of their property if the condemnation turns out to have been wrongful.

Once the litigation phase begins with the filing of objections, the case is docketed and tried just as any other lawsuit would be.  This means that, depending on how crowded the court's docket is, it could easily take a year or more to reach a trial setting.

An appeal from the trial court's ruling may be taken to the Court of Appeals in the same manner as would any other appeal, once again with the notable exception that regardless of the result at trial, the court hearing the appeal may not "suspend the judgment of the trial court pending the appeal." While this means that a landowner will still be out her property if she loses at trial, it likewise means that she will be able to regain her property and hold on to it during appeal if she wins at trial and receives a favorable judgment.  This has the potential for putting the shoe on the other foot, so to speak, and stalling the progress of the project during the pendency of an appeal.

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This article is provided for information purposes only and is not intended as legal advice. Always consult an attorney about your particular situation.