Texas Eminent Domain Laws and Property Rights

The following responses are intended to provide general information about eminent domain laws in the featured state. Such information does not constitute legal advice. Anyone interested in learning more about eminent domain law and the impact it may have on a given set of facts should consult with an OCA attorney or another attorney experienced in handling eminent domain cases.

• Who Can Exercise Eminent Domain Laws?

  The State, as the sovereign, has the inherent power of eminent domain. Through the legislature, Texas has delegated the power of eminent domain to many political subdivisions and to some private concerns deemed to serve the public use, such as railroads, gas utilities, and common carrier pipelines.

• What Are the Legal Requirements for Exercising the Power?

  A governmental or public-use entity with the power of eminent domain must comply with a number of statutory requirements before filing a condemnation case to acquire private property for public use. Once property is identified as potentially necessary for a public project, the entity must provide the landowner with a copy of the Landowner’s Bill of Rights, which sets for a general description of the landowner’s rights when faced with a condemnation and the procedures applicable.
  
  Any exercise of the power of eminent domain must serve a public use. The condemning authority must pay adequate compensation, typically measured in terms of market value, and must make a good-faith offer of compensation before filing any condemnation action. If a condemning authority’s initial offer is not accepted, it must make a final offer before filing the condemnation petition, and this final offer must be supported by an appraisal estimating the compensation owed for the taking.
  

• What Limitations or Defenses Exist?

  The most obvious limitation on a condemning authority’s exercise of the power of eminent domain is the public use requirement. As a practical matter, however, challenges to the public necessity of a condemning authority’s project face a decisively uphill battle.
  
  The compensation obligation can serve as a more practical deterrent to a governmental or public- use entity’s abuse of the eminent domain power.
  

• What Constitutes a Public Purpose?

  Texas courts have held that a “public use” is one which concerns the whole community in which it exists, not a particular individual or a number of individuals, and have recognized that the question is largely one for the legislature, the courts refusing to interfere except to inquire whether the legislature could reasonably have considered the use a public one. The term is not limited to business necessity and ordinary convenience, but may extend to matters of public health, recreation and enjoyment.
  
  When a condemning authority’s governing body makes a determination of public necessity, it is not subject to judicial review unless the property owner can establish that the condemning authority has committed fraud or has acted purely arbitrarily.
  

• How is Compensation Determined?

  In whole takings cases, compensation is typically measured by the market value of the property before the taking, without considering any influence of the project for which it is acquired. In partial takings cases, the measure of compensation is the difference in market value of the whole property before the taking, without considering any influence of the project for which it is acquired, and the remaining property after the taking, taking into consideration the uses to which the part acquired is to be put. In all instances, the landowner is entitled to have his property valued at its highest and best use, being the reasonably probable and legal use of the property which is physically possible, appropriately supported, financially feasible, and that results in the highest value.
  
  To estimate compensation, it is often necessary to engage an independent real estate appraiser. For unimproved properties, the Sales Comparison Approach is typically the only relevant methodology for estimating market value. For improved properties, the appraiser may consider the Improved Sales Comparison Approach, the Cost Approach, the Direct Income Capitalization Approach, or some combination of these three approaches in concluding a reconciled market value.
  

• How Is Market Value Defined?

  In Texas, “market value” is defined under the willing-buyer, willing-seller test, i.e. the price that the property would bring when it is offered for sale by one who desires to sell, but is not obligated to sell, and is bought by one who desires to buy, but is under no necessity to buy, taking into consideration all the uses to which the property is reasonably adaptable and for which it either is or in all reasonable probability will become available within the reasonable future.
  

• What About Recovering Damages to Remaining Property

  In a partial takings case, the landowner is entitled to the market value of the property taken and damages for the decrease, if any, resulting to the market value of its property that remains after the taking. Importantly, not all of a project’s impacts on market value are compensable, at least as against an entity with sovereign or governmental immunity. For example, impacts suffered in common with the general community are considered “community damages” and are not recoverable. Landowners do not have a property interest in the traffic that travels in front of their properties, and therefore a diversion of traffic or increased circuity of travel are not compensable. Access to and from one’s land is a property right, but not every change in access is compensable. A material impairment of direct access on or off the property is compensable.

• Is the Landowner Entitled to Recover Reasonable Attorney Fees? Expert Fees? Litigation Costs?

  Unless a statutory condemnation case is dismissed for lack of eminent domain authority or public use, landowners in the State of Texas cannot recover reasonable and necessary fees or expenses incurred in a condemnation case. All prevailing parties may recover taxable court costs, but these costs do not include attorneys’ fees or expert fees.