Compensation for Texas Eminent Domain: What Land Owners Should Know

One of the most disturbing issues that any landowner faces is that of eminent domain. While it is disturbing for property owners, it is one of the powerful tools employed by governments to appropriate private properties for public use. In Texas, local and state authorities in addition to certain private organizations and utility companies can take over a private land/property for public use.

This eminent domain authority is what many entities in the state of Texas rely on for the implementation of schools, pipeline, highway, rail system, water and transmission line projects. However, the constitution of the state offers one major protection which is that a property cannot be taken unless the owner is adequately compensated.  Understanding what can be termed a just Compensation for Texas Eminent Domain has always been the bone of contention. Many landowners do not know what adequate compensation is and how to get it.

In this article, we will break down the basics of Texas eminent domain, how to determine adequate compensation and how the process works.

Understanding Eminent Domain in Texas

In a nutshell, under the laws of Texas, eminent domain can only be employed in the event that a private property is needed for projects for public use and these include the following:-

1. Highway construction or road expansion
2. Water and sewer infrastructure
3. Schools and public buildings
4. Oil and gas pipeline
5. Electrical transmission lines
6. Municipal development projects
7. Some private projects that are authorized by statute

Before taking over a property, the condemning authority (that is the entity/organization that is doing the takeover) must make what is referred to as a good faith offer, state the basis of their valuation of your property and allow you enough time to negotiate.  If the landowner refuses the offer, the matter is taken to the Special Commissioner’s Hearing where independent commissioners determine just compensation. Both sides may still challenge the ruling in court if they don’t agree with it. 

What Counts as “Adequate Compensation”?

The bedrock of the Texan eminent domain law is the assurance of ‘adequate compensation’. However, landowners are often shocked at how the compensation is really calculated.

Below are some criteria for the calculation:-

Fair Market Value of the Land Taken

This is the price that can be gotten by a willing buyer from a willing seller in the real estate market. Click here for more information on fair market value of properties.

The appraisers of the land consider the following:-

1. Location
2. Size and shape of the property
3. Comparable sales
4. Topography
5. Zoning 
6. Future development potential

Most importantly, compensation is based on the highest and best use of the land even if it is not being used that way. A good example is a farmland that is located close to rapidly expanding commercial district; though it is currently a farmland, it can be valued as a future commercial property.

Damage to the Remainder (Severance Damages)

This is the most misunderstood concept in the entire Texas eminent domain compensation process and it is sadly, the most financially significant aspect of the whole deal.

If the government takes only a fraction of your property, you may be entitled to be paid for the devaluation of the remaining fraction.  The following scenarios serve as perfect examples:-

1. A pipeline that separates a ranch minimizes its agricultural usefulness
2. An expanded highway can push traffic closer to a home and reduce safety while increasing noise levels
3. Drainage changes can lead to flooding risks

Many landowners only get the value of the land taken and not on the part that the viability has been reduced or even eroded because of ignorance.

Improvements on the Land

Any property that has fence, buildings, trees, barns, irrigation system or anything that can count as improvement must be have those improvements included in the valuation to determine adequate compensation.

Mineral Interests

The Texas state constitution considers mineral rights as a separate estate. This means that any project that affects oil, gas or any mineral on the land must have the following reflected in the compensation:-

1. Restricted drilling activities
2. Lost royalties
3. Reduced property value because of setbacks or easements

Temporary Construction Easements

These represents short-term rights that permit crews to come on your property during construction ; therefore, you must be compensated for the following:-

1. Damage to land
2. Loss of use
3. Disturbance to business or farming operations

Conclusion

There is so much more to the Texas eminent domain law therefore, but you can visit this site: https://www.txdot.gov/  for more information.

That being said, the best bet for any landowner that is faced with a condemnation notice is to contact a seasoned lawyer to help them handle the matter. Bear in mind that although the government has the right to appropriate a private property for public use, the process must be transparent, fair and sealed with adequate compensation.