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Eminent domain gives government entities the power to take private property for public use. It is an essential tool for the construction of public infrastructure like highways, roads, utilities, and pipelines. When eminent domain is exercised against commercial or retail property, however, the implications can be particularly disruptive for business and land owners.
The Texas eminent domain lawyers at Barron, Adler, Clough & Oddo, PLLC, assist business and land owners throughout the state in fighting back against eminent domain, minimizing related disruptions, and ensuring they receive full compensation. We are tireless advocates who have dedicated our careers to helping individuals, families, and businesses protect their rights.
Our attorneys focus exclusively on eminent domain and other takings, a narrow area of the law in which we have more than 100 years of combined experience. We advise a wide range of clients, including national, regional, and local landowners, landlords, and tenants.
How Eminent Domain Works in Texas
Eminent domain in Texas is a complex process that can significantly impact commercial and retail properties, particularly in the context of highway and street expansions. Although the government or a utility company may have the right to take property for public use, business owners are entitled to just compensation and due process.
The power to take property through eminent domain comes from the Fifth Amendment of the U.S. Constitution, as well as the Texas Constitution and other state laws. Together, these laws require that the taking be for a public use and that the property owner receive just compensation. They also protect the owner’s due process rights with notice and an appraisal that substantiates the condemnor’s offer amount, along with the right to a hearing.
A fairly wide range of governmental entities have eminent domain power in Texas:
- State and local governments
- Transportation and regional/local authorities (TxDOT)
- Municipal utility districts
- School districts
- Pipeline operators
- Electric and water utilities
- Transit and rail companies
These entities may condemn private property when it is needed for a public project and negotiations with the property owner are unsuccessful.
The Eminent Domain Process
An entity seeking to take property by eminent domain must first notify the property owner that it intends to take the land and make an offer to purchase it. The offer must be based on the property’s fair market value, as determined through an independent appraiser’s assessment. The owner must also be given a copy of the Texas Landowner’s Bill of Rights and at least 30 days to respond to the offer.
This is important for property owners to understand: You do not have to accept the first offer or any other offer to buy your land. The appraiser retained by the condemnor may have not been aware of relevant comparable sales or other impacts to the property that should be taken into consideration in valuing the taking. You have the right to negotiate or litigate for additional compensatory and, where applicable, more favorable easement terms.
If the parties cannot reach an agreement, the condemnor may initiate legal action to condemn the property.
Once a condemnation case is filed, a panel of three special commissioners convenes a preliminary valuation hearing and determines the appropriate compensation for owners whose property is being taken through eminent domain. The special commissioners, appointed by a local court, are independent landowners who live in the county in which the property is located.
The panel holds an administrative hearing, giving each of the parties a chance to present evidence and make arguments. The special commissioners later issue a decision which sets the compensation to be paid. The special commissioners award can be appealed by the condemnor or the property owner. The condemning authority can take possession of the property after depositing the commissioners’ award with the court, even if the landowner has objected, in most cases.
Eminent Domain and Commercial or Retail Property
The stakes are often high when commercial or retail property is targeted for condemnation.
Business and land owners must consider not only the value of the land but also the impact on operations, revenue, and long-term viability. In seeking just compensation, they should account for:
- The fair market value of the land and buildings
- Loss of access to major roads or parking
- Diminished value of the remainder of the property
- Impact on business signage and foot traffic
- Costs to restore the functionality of the property
An experienced Texas eminent domain lawyer will help you understand the full impact of a government taking and seek full compensation.
Highway and Street Expansion
Projects to build highways or expand existing roadways are common across Texas and a significant source of stress for businesses in the Lone Star State.
Location, location, location. Commercial and retail properties need highway and road access to reach existing customers and attract new ones. These businesses regularly seek strategic locations, which then make them prime targets for eminent domain in road expansion and improvement projects.
The Texas Department of Transportation and local municipalities frequently use eminent domain to acquire land for:
- Widening highways
- Building overpasses or interchanges
- Adding service roads or medians
- Improving drainage or utility access
These kinds of projects often serve legitimate public needs. They can also significantly harm retail centers, gas stations, restaurants, and small offices that rely on easy access and visibility.
Take, for example, a retail store that loses its frontage or has its driveway rerouted due to road expansion. This is potentially a major blow that can severely harm the business, even if much of its property is untouched.
Partial Takings and Eminent Domain Easements
In commercial eminent domain cases, the taking can be either total or partial.
A total taking is one in which the governmental entity takes an entire parcel of land, forcing the business to relocate or close. Alternatively, the business retains at least some of the property in a partial taking.
In some situations, the entity may seek to obtain an easement instead. An eminent domain easement is generally is when a public entity takes a piece or section of land that is owned by someone else for a public purpose. It can be permanent or temporary and may include restrictions on what the landowner can do in the easement area.
For instance, oil and gas companies and electric utilities frequently use easements to acquire the right to install pipelines and power lines across private property. In these cases, the landowner can negotiate the terms of the easement and include provisions aimed at minimizing disruption to the land or business operations. The owner can also seek commitments that the condemnor restore, for example, landscaping or signage disrupted as a result of the project.
Own Commercial Property? Speak With an Eminent Domain Lawyer
If you are involved in an eminent domain, condemnation or inverse condemnation case in Texas, let the eminent domain lawyers at Barron, Adler, Clough & Oddo, PLLC put their experience to work for you. Contact us today to discuss your case and how we can help.