Most landowners are aware that their property may be taken by governmental agencies by the proper exercise of the power of eminent domain:  condemnation.  In most cases the only real issue is valuation.  The right of the condemnor to take the property is usually clear, and the concern of the owner – the condemnee – is how much the land, perhaps with improvements, is worth.  There are many issues relating to valuation, but before landowners get to that point in the condemnation process, they typically want answers to a number of basic questions, such as these:

1. who has the power to condemn?

2. for what purposes can land be taken?

3. what limitations exist on the exercise of the power to condemn?

4.  can landowners place any limitations on the purpose for which the land is taken or on the amount of land taken?

This article will provide short answers to the above questions, not to discuss them in depth, to provide to the landowner some insight into the condemnation process.

Who Has The Power To Condemn?

Most political subdivisions have the power of eminent domain.  It is a power conferred on governing agencies at all levels by Federal and Texas Constitutions and by Congress and the Texas Legislature.  Thus, as is most frequently seen, the State of Texas, all counties and most cities exercise the power to obtain lands for such purposes as highways, streets and public buildings.  But there are many other agencies and institutions which also have that power, such as public utilities (including electric power generation and electric and gas transmission and telecommunications), common carrier pipelines, railroads, toll road authorities, river authorities and other water improvement districts, conservation and  reclamation districts, municipal utility districts, public universities, port authorities, jail districts, school districts, hospital districts and many other types of political subdivisions.[1]

The foregoing, of course, involve only state and local governmental and other public agencies.  The federal government has a large array of agencies which may condemn private property.

For What Purposes Can Land Be Taken?

The generally recognized restriction is that the condemnation must be for a “public use.”  That requirement is specifically expressed both in the United States Constitution and in the Texas Constitution, but in practice the standard has diverged according to which government, state or federal, is the condemning authority.  Many articles and much dispute are involved in the pros and cons of the scope of the concept of “public use,” a subject which is beyond the limited goal of this article to inform the render of the basic principles of condemnation law.  The primary issue in current disputes involves the limits of urban redevelopment.  The Supreme Court of the United States has upheld takings of private property in order to further redevelopment of property as a commercial project in order to enhance the tax base for local government.  Their focus was more on the “public purpose” behind the condemnation rather than the more restrictive “public use.”  The Texas Legislature and Texas courts have not gone that far. Indeed, the Legislature enacted legislation which serves to underscore the more limited scope of “public use” prevailing in Texas.  The Texas statute prohibits condemnations “for economic development purposes, unless the economic development is a secondary purpose resulting from municipal community development or municipal urban renewal activities to eliminate an existing affirmative harm on society from slum or blighted areas .”

Thus, while the concept of “public use” has received considerable attention in the wake of the Supreme Court’s Kelo decision, the scope of a taking in Texas (at least under state authority) has not been materially altered.

What Limitations Exist On The Exercise Of The Power To Condemn?

The state, or a political subdivision of the state, need not set out to condemn property under the condemnation statutes in order to incur liability for the value of property taken.  The concept of “inverse condemnation” or “regulatory taking” means that if the governmental agency so interferes with property ownership while engaging in regulating the health, safety and welfare of the public, the property owner may file suit to hold the agency liable for the taking of his property.  Texas has a statute, called the “Private Real Property Rights Preservation Act,” which requires taking authorities to consider the impacts on private real property which their contemplated actions may have, and to prepare “Takings Impact Assessments” to serve as the means of assessing the impact on private real property.   A failure to prepare the impact statement when one is required may result in a lawsuit to invalidate the governmental action.

This authorization to landowners to sue to invalidate governmental action represents a departure from the approach available before the Rights Preservation Act, which was to sue the governmental agency only after the action caused damage or interference with the use of property.  Even then, the only available remedy was for compensation in damages, much like a regular condemnation, hence the phrase “inverse condemnation.”  The only threshold condition to the assertion by the landowner of rights under the Rights Preservation Act is that the governmental action must cause at least a 25% reduction in the market value of the affected property.

If that condition is not met, that means only that the additional burdens imposed on the governmental body by the Rights Preservation Act are not available; the landowner may still file suit to recover his lost value, or for the damages caused to his property by the governmental action.

All landowners should be aware, however, that the takings clauses of the state and federal constitutions do not bar governments from affecting property rights.  Property rights are properly affected by measures taken to protect the health, safety and welfare of the public, such as zoning ordinances, building codes, safety standards, sanitary requirements, land use planning, setback requirements, regulation of water rights, environmental regulations, and the like.

Landowners thus have the right to force a governmental body to justify its interference with property rights.  That interference must be a direct restriction on the use of the property such as an actual physical invasion or blocking of access, or a denial of a permit for development.  If a governmental action prohibits or denies all economically viable use of the land, such conduct will likely constitute a “taking.”  This typically does not make takings of all reductions in value, only those which result in severe reductions in value which eliminate profitable uses.

Can Landowners Place Any Limitations On The Purpose For
Which The Land Is Taken Or On The Amount of Land Taken?

The quick answer to this question is, “usually not.”  While a landowner has the right to force a condemnor to observe the “public use” restriction, the condemnor’s discretion to determine what land and how much land to condemn is virtually absolute.  The power of eminent domain carries with it the right to determine the existence and scope of public necessity, which is not subject to court review unless in a rare instance the condemnor engages in fraud, bad faith or arbitrariness. The proof of such conduct must be clear.

One potential course open to landowners when faced with a proposed condemnation is to negotiate with the condemning authority to sell the property rather than force a condemnation, in which the amount of land taken, or the rights retained by the landowner in any part not taken, could be the subject of a negotiated agreement rather than a forced conveyance of whatever the condemnor chooses to obtain.  For example, mineral rights in the condemned property could be reserved to the landowner by agreement, with access to the minerals secured by directional drilling from lands not taken. Often a condemnor will be willing to negotiate a taking of less than the full fee simple title to the property.

Conclusion
The above discussion only begins to answer some of the many questions which are raised by landowners when faced first with the threat of condemnation and then the reality of it.  Unless you have gone through the condemnation process, only by consulting an attorney experienced in this area of the law can you expect to know how to protect your rights when a condemnor decides that your property is needed for its next project.

[1] For a list of Texas statutes granting and otherwise dealing with the power of eminent domain as of March 2006, contact the Texas Legislature Council at P.O. Box 12128, Austin, Texas 78711-2128.