Eminent Domain by R. Scott Alagood

In Denton County alone, there are numerous major transportation projects involving billions of dollars. The I-35 expansion project alone is projected to spend upwards of $5 billion over the next 10-15 years. When you include the everyday street and utility projects, high voltage power lines, natural gas pipelines, and water district facilities, almost every area of Denton County has some type of on-going public project. What do each of these projects have in common with each other? The answer is the private property that must be taken in order to accommodate the public use. Eminent domain is the legal concept that authorizes the taking of private property for a public use through the payment of just compensation and the process by which such taking occurs.

Parties whom have been given the right to acquire private property for public purposes include, but are not limited to, municipalities, counties, school districts, the State of Texas, the federal government, and certain types of common carriers (such as water, gas, and electrical utilities).

While “eminent domain” and “condemnation” seem synonymous, “condemnation” only refers to the process of acquiring private property by a condemning authority when voluntary purchase is not available. “Eminent domain” is a broader term which encompasses the power to force a private party to participate in a statutory condemnation process and includes “inverse condemnation” claims as well. Chapter 21 of the Texas Property Code governs the statutory procedures with the condemnation process in Texas.

There are three potential phases involved in condemnation. First, the condemnor must present a bona fide written offer to the condemned to purchase the property for fair market value. If the parties are unable to agree on the damages to be paid to the condemned for the taking, then the process proceeds to the next phase which is a hearing before special commissioners.

To begin the special commissioners phase, the condemnor must file a statement or petition in condemnation in the County Court at Law in the county in which the property is located. In some instances, a District Court may also hear condemnation cases. Once the petition is filed, the court will appoint the 3 disinterested real property owners who reside in the county as special commissioners. The special commissioner’s sole function is to access the damages to the landowner relating to the property being condemned. The special commissioner’s hearing is typically an informal gathering with relaxed rules of presentation, evidence and examination. This phase ends with the special commissioner’s issuing a written award of damages in favor of the landowner.

If no objections to the special commissioner’s written award are filed with the court within a specified time, then the commissioner’s award becomes the Judgment of the court. However, if objections are timely filed, then the court obtains jurisdiction to re-litigate the damages issue awarded to the landowner de novo (or simply “from the beginning”). This begins the final judicial phase of the condemnation process and is sometimes referred to as the “Appeal”. The judicial phase is tried as in all other civil cases filed in the court.

During the pendency of the Appeal, if the condemnor wishes to begin its project, it may take immediate possession of the condemned property by paying the landowner the amount of damages and costs awarded by the special commissioners, or deposit that money into the registry of the court made payable to the landowner. If the condemner is not a traditional governmental entity, it may also be required to deposit other security with the court to cover any additional award and costs involved in the Appeal before it can take possession of the property.

A landowner may withdraw the money deposited by the condemner, but if they do so, they waive any objection as to the validity of the taking. However, that waiver does not include the right to contest the adequacy of the commissioner’s award.

There are different ways that a landowner can procure legal representation in a condemnation proceeding. The landowner can pay an hourly fee. In many situations, attorneys will represent a landowner on a contingent basis in which the attorney will receive a certain percentage of the final award which exceeds the condemnor’s initial offer. Typically, the amount of the percentage will depend on several factors, including the complexity of the case, the anticipated increase, who pays the costs and expenses associated with the case, and whether or not a current or future attorney-client relationship exists.

R. Scott Alagood is Board Certified by the Texas Board of Legal Specialization in Residential and Commercial Real Estate Law.