1. Condemnation: Best Practices and Common Pitfalls
James D. Bradbury
Waves of Change
Texas Rural Water Association
Texas Water Conservation Association
January 11, 2017

2. Eminent Domain: Taking Property
Unique area of law where the government can take property of its citizens
Law has evolved to allow condemnation by private corporations, causing much of the opposition
Modern era has enabled the taking of property for a wide array of purposes
The needs of growth and development have expanded the scope of private property takings
But, it’s now on many people’s radar
A key political issue in Austin, nationally and the media

3. Photo by Keith Burgess-Jackson

4. Be Cautious
Eminent Domain is a unique area of the law where it can be very expensive if you do not do it right the first time.
Details matter, develop checklists and timelines
Its more complicated than just negotiating
Errors can result in expensive dismissals or trespass damages

5. The Acquisition Process
Board Approval
Survey
Appraisal
Landowner Meetings

6. Pitfall-Board Action
Prior to exercising the right of eminent domain the governing board must pass a resolution authorizing the potential taking
Resolution may involve more than one parcel
Risk of starting negotiations informally and overlooking this requirement
Filing suit without board approval can be costly

7. Preliminary Planning
Prior to any formal proceedings, there exists a period of planning, initial contacts by condemnor, and negotiations.
Involves visit from negotiation agent or landman to discuss scope of taking and payment.
When negotiations start to become futile, landowner will receive a “Last Offer” letter.
For highway condemnation, there will also be an appraisal. Appraisals are unlikely, however, for pipelines.
Last Offer may actually be less than previous offers.
If no response or agreement, condemnor will file an action in the county where the property is located.

8. Photo by Phillip C. Marshall

9. The Rules of the Game
All takings in Texas are governed by Chapter 21 of the Property Code
Most transfers of property take place in a negotiation outside formal proceedings
Entity seeking to acquire property must negotiate in good faith for the value before filing any action
If no result, may file an action in the county where the property is located
No immediate notice to landowner
Judge appoints three special commissioners (not lawyers) to set value

10. Pitfall-Failing to Negotiate
A Bona Fide offer is a requirement prior to filing a condemnation action
If attorneys’ fees statute passes the Legislature, a low offer may become very expensive later
Small values make % threshold for assessment of fees more likely
If you receive a counter offer consider responding before declaring negotiations futile

11. Pre-Hearing Process
The Commissioners will select a time and place for a hearing on value (not on validity of taking)
Then the landowner will get notice (usually 3-4 weeks)
Have the right to object and replace a commissioner
Entity seeking to acquire must provide appraisal with offer and ahead of hearing
Landowner has the same obligation in advance of hearing
But landowner may testify to value without appraisal

12. The Special Commissioners Hearing
Hearing is short and reasonably informal
Each side has the right to question any witness
Commissioners will confer and make an “award”
Either side may appeal to a jury trial on issue of value or possibly “right to take” (rare)
Regardless of appeal, Condemnor gets the property
Money is on deposit and may be withdrawn by landowner
At time money is deposited, property belongs to Condemnor
Costs can go either way-set by Commissioners

13. What are Landowners Entitled to?
Damages are:
The value of the part taken (land lost times value); and
The value of the damage to the “remainder” (what landowner keeps).
Landowners do not generally get attorneys fees back
Does the taking lower the value of the remainder?
Cannot be damages that are general to the public.
If the case proceeds to a jury trial, these are the issues to be answered by the jury.
If landowner withdraws the money, there is a true up after the verdict.
Judge can determine the legal right to take property.

14. Remainder
Part
Taken
Home

15. Tips for the Taking You have the right to enter and survey property
No destructive testing
Utilize land acquisition firms
Utilize outside counsel
Good faith negotiations
Landowner’s Bill of Rights explaining rights is required

16. Pitfall-Altering the scope of Taking after Filing Suit
Make sure of the interest that needs to be condemned before filing suit
Consider the need for temporary construction area and access
Altering the area taken during the pendency of the case can present complicated and expensive problems

17. Photo by Marie D. DeJes, Houston Chronicle

18. What’s a Public Purpose?
Kelo case, a house for a development project?
SCOTUS says, yes Constitutional.
Cowboys Stadium?
Trinity River Vision project in Fort Worth
Real Question is not eminent domain, it’s what do you want your city or government to do?
That’s where it starts
Almost any act or project of a government will authorize condemnation.

19. SB 474 – Bad Faith Negotiations
If amount of damages awarded by Special Commissioners or amount awarded after appeal to District Court is 20% greater than the amount offered by the condemnor, the condemnor will
Pay all costs
Pay reasonable attorneys’ fees and professional fees (i.e., expert fees) incurred by property owner
Bill passed Texas Senate, left pending in House
Will return this session likely at 25%

21. Pitfall-Public Opinion on Eminent Domain
Public opposition to the use of eminent domain has been growing for more than a decade-its increasing
The messages are strong and well publicized
Be aware of these opinions in dealing with landowners, special commissioners, juries and others
Rely on your customer relationships and negotiate directly as much as possible

22. Easements

23. What is an Easement?
An easement confers upon one person the right to use the land of another for a specified purpose
Easement owner entitled to exclusive use of land for purpose of easement
Critical Point: Make sure to define all necessary rights in the language of the easement
Cannot change the terms of the deal after the fact

24. What Rights to Include? Right to lay the line
Right to place surface facilities
Ingress and egress to the easement
Repair of the line
Removal
Relocation
Temporary work space
Abandonment
Maintenance of the easement area
Restrictions on the surface use
Right to place additional lines in the future or increase size

25. Acquiring Easements Homestead Property Non-Homestead Property
Protected by Texas Constitution (Art. 16, Sec. 50)
Should obtain signature of both spouses
Non-Homestead Property
Is it community or separate?
If community property, it is separately-managed?
Is there a written agreement evidencing it is separately- managed?

26. Acquiring Easements Non-Homestead Property
If separate property, only one spouse’s signature required
If community property, best practice is to obtain both spouse’s signatures
If confirmed written agreement that property is separately managed community property, then one signature may be sufficient

27. Recording the Easement
A bona fide purchaser of the servient estate without notice (actual or constructive) of easement, takes title free and clear of easement.
Unrecorded easement still effective against subsequent purchaser if purchaser had actual notice of easement.
Actual notice is hard to prove, so best practice is to record easement in county deed records as it supplies “constructive notice”

28. Pitfall-Line with No Easement
Inevitable that water lines or other equipment may be located on private property without a written easement
Lines may have been placed during a more informal time or land may have been subdivided
Obtain an easement in writing to be recorded
Talk to landowners, use a simple form

29. Maintenance Responsibilities
Holder of the easement must maintain the easement
Servient estate has duty not to interfere
Duty of constructing an easement or of making repairs falls to dominant estate (holder of easement)
Easement holder has duty of ordinary care not to injure servient estate
General rule: Holder of easement may prepare, maintain and improve the easement to promote purposes for which it was created

30. Fences and Easements Fences Within Easement
Easement language and understanding with owner is that fences or other structures should not be permitted within easement area
Easements should be located within reasonable distance from fence
Ensure that landowners have an accurate survey or map of easement
Communicate clearly regarding fencing prohibition

31. Fences and Easements
Easement holder can seek injunction to remove fence or prevent encroachment on easement
Statute of Limitations begins to run with completion of obstruction
N. Texas Mun. Water Dist. v. Ball, 466 S.W.3d 314 (Tex.App.—Dallas 2015, no pet. h.)
Involved fence obstructing easement for water lines
Court entered injunction, which was upheld by COA
Fence was “permanent” for purposes of easement’s permanent-structure prohibition

32. Other Concerns Damage to Easement Area Enforcing Terms of Easement
Landowner or Third Party will be responsible for damage to easement area or lines within easement
Trees, vegetation, or other impediments to easement area can be forcibly removed by easement holder
Enforcing Terms of Easement
Easement holder has obligation of maintenance of easement
Should inspect easement area for impediments or violations
Failure to monitor easement area could diminish later claims for damage or violation
Once violations are identified, timely notice should be given to landowner

33. 2017 Legislature Bills are expected to include:
Attorneys’ Fees if award is 125% of last offer
Enforceability of Possession and Use Agreements
Date for property tax division
Royalties for private infrastructure projects
Appraisal timing
Minimum Easement Terms
Valuation of Easements with private negotiations

34. Forth Worth Austin 512.953.5801 www.bradburycounsel.com
James D. Bradbury, PLLC
Forth Worth
Austin