*This article is not a substitute for the advice of an attorney.*
We are continuing on in our multi-part series regarding eminent domain in Texas. Please feel free to read Part 1 here if you missed that post.
Today’s blog provides the basic information about the rules governing condemnation proceedings in Texas and includes links to the applicable statutory provisions where possible. Condemnation proceedings have very different procedures than other civil cases. It is important for landowners to understand the condemnation process in case they ever find themselves faced with a condemnation suit. This blog post provides landowners basic information about eminent domain, condemnation procedures, and landowner rights. Additionally, landowners should realize that condemnation proceedings are highly complex and factual and it is advised that any landowner facing a condemnation proceeding contact a licensed attorney and obtain legal advice. As you will see below, condemnation proceedings are governed by Texas Property Code Chapter 21, which can be found in its entirety here.
Step 1: Offer and Negotiations
First, before initiating condemnation proceedings, the company must make a “bona fide offer” to purchase the property that it seeks. In order to have complied with this bona fide offer requirement, the company seeking to use eminent domain must make an initial written offer to purchase the property, obtain an appraisal from a certified appraiser of the value of the property, and make a final written offer that is greater than the amount of the appraiser’s report. [See Texas Property Code 21.0113.] Importantly, landowners are protected by certain time requirements in the statute. There must be at least 30 days between the initial offer and the final offer and the landowner must be given at least 14 days to respond to the final offer before a condemnation proceeding may be filed. [See Texas Property Code 21.0113.]
The company is also required to provide landowners with certain information at the time the offer of purchase is made, including a copy of any appraisals in the company’s possession related to the land that are in the company’s possession and prepared in the last 10 years. [See Texas Property Code 21.0111]. Additionally, the company must provide the owner with a copy of the Texas Landowner Bill of Rights. [See Texas Property Code 21.0112.] The Landowner’s Bill of Rights is a document prepared by the Texas Attorney General that sets forth the law regarding eminent domain, the condemnation process, and explains the landowner rights. This is critical information and should be carefully reviewed by anyone facing the threat of eminent domain.
During this time, negotiations are ongoing between the company and the landowner. Landowners are permitted to, and I would strongly encourage any landowner in this situation to, seek legal counsel during these negotiations. During this time, a landowner may have an appraisal conducted by an appraiser of his or her own choosing, but is required to provide the results to the oil company. [See Texas Property Code 21.0111]. Importantly, landowners should be sure to consider more than just the monetary payment during this negotiation period. There very well may be non-monetary terms that are actually more important to the landowner than an increased payment. Key terms to consider while negotiating will be covered in an upcoming blog post.
If an agreement is reached between the company and the landowner, there is no need for eminent domain and the sale of the easement goes forward between the two parties. If no agreement is reached, the company may then file a condemnation proceeding.
Step 2: Condemnation Petition Filing
If no agreement is reached, the company will file suit against the landowner in either the district court of the county court of law in the county where at least part of the property is located. [See Texas Property Code 21.001; Texas Property Code 21.013.] This is the beginning of the formal condemnation proceeding. The petition must contain a description of the property to be condemned, the public use for which the property is being taken, the name of the property owner, state that the company and the landowner are unable to agree on the damages due, state that the company provided the landowner with a copy of the Bill of Rights, and state that the company made a bona fide offer as required. [See Texas Property Code 21.001.]
Step 3: Special Commissioner Appointment, Hearing, and Award
Upon the filing of a condemnation proceeding, the judge will appoint three local landowners to sit as “special commissioners” to determine adequate compensation. [See Texas Property Code 21.014]. Both the landowner and the company have the right to strike one of the three local landowners, and if exercised, the judge will appoint another special commissioner. Importantly, these three commissioners have no authority to consider whether condemnation is proper, but instead are only able to determine the proper compensation to the landowner. [See Texas Property Code 21.014].
The special commissioners will then schedule a hearing on the issue of just compensation. A landowner will receive notice of the hearing, and may present appraisal reports or other evidence at the hearing. [See Texas Property Code 21.015 - 21.016]. Specifically, the commissioners shall consider evidence of the value of the property being condemned, the injury to the property owner, the benefit to the owner’s remaining property, and the use of the property for the purpose of the condemnation. [See Texas Property Code 21.041]. Further guidance is given to the commissioners by statute. [See Texas Property Code 21.042]. Again, legal representation is recommended. After the hearing, the special commissioners will issue an “award” that will state the value of adequate compensation that shall be paid by the company to the landowner for the easement. That award is then filed with the court.
Importantly, once the commissioners have made an award, the company may take possession of the property pending results of further litigation if the company pays a required amount to the landowner or to the court, or posts a bond to secure the payment of damages. [See Texas Property Code 21.021]. This right to possession would allow a pipeline company, for example, to being construction of the line even though the case was still pending on appeal.
Step 4: Award Filing and Objections Permitted
If either the landowner or company is dissatisfied with the award, an objection may be filed with the court on or before the first Monday following the 20th day after the day the commissioners determination is filed with the court. [See Texas Property Code 21.018]. If an objection is filed, the condemnation case will be set for trial–before either a judge or jury–and a verdict rendered.
Step 5: Trial by Judge or Jury
Once a condemnation proceeding is filed, a landowner may challenge the legal authority of the proposed condemnation by filing a motion to dismiss the proceeding. This is where challenges to the company’s common carrier status, or to whether the property is being taken for public use, are to be made. Unlike the special commissioners, the court has the power to consider these issues.