In the last newsletter we addressed several questions which affect landowners when faced with the threat of condemnation of their land.  We dealt briefly with such questions as who has the power to condemn, for what purposes land may be taken, and what limitations on the power exist, including a landowner’s ability (or the lack thereof) to affect the scope of a condemnation.  As might be expected, many other questions, both practical and legal, are raised by the condemnation process, such as:

1. must the condemnor negotiate with the landowner to try to arrive at an agreed price?

2. does a condemnor have the right to enter private property to conduct a survey?

3. must the condemnor and landowner reveal to the other any written appraisal(s) they have of the property?

4. what happens when there is no agreement on the value of the property?

 

As with the previous article, this one will provide short answers to the above questions to provide some insight into the condemnation process.
Must The Condemnor Negotiate With The
Landowner To Try To Arrive At An Agreed Price?

Section 21.012(a) of the Texas Property Code provides that if an entity having the power of eminent domain wants to acquire real property for a public use “but is unable to agree with the owner of the property on the amount of damages,” a petition for condemnation may be filed.  This is regarded as a requirement that the condemnor negotiate in good faith with the landowner, and that step is almost universally followed by condemnors.  It is both efficient and economical for a condemnor to contact landowners and to make an offer, because if after negotiations occur a purchase price is agreed, then both parties avoid the expense of the court procedures which would follow a failed negotiation.  However, when a negotiation fails, landowners sometimes wonder whether the condemnor’s effort to negotiate was really “in good faith” when the offer was considered to be unrealistically low, and the condemnor did not really “negotiate” on price after making the offer. The problem with the mandatory “negotiate in good faith” step in the condemnation process, however, is that there is no real remedy for the landowner if the condemnor does not negotiate in good faith.  The only thing the landowner can do is to stop the court procedures after the condemnor has filed (after the special commissioner’s hearing), to force the condemnor to continue negotiating.  The landowner cannot stop the condemnation, just prevent the proceedings from going forward until negotiations have been completed.  That small “success” depends, of course, on the landowner having evidence to persuade the judge that the condemnor has not negotiated in good faith.  If the condemnor has made an offer which the landowner rejects, and both parties are standing firm on their respective positions on value, and are far apart, there is little hope or reason for a judge to stop the process in order to force the parties to continue negotiating.

Does A Condemnor Have The Right To
Enter Private Property To Conduct A Survey?
 
Yes, if the condemning entity has the power of eminent domain.  The right to enter is deemed essential to arrive at a proper legal description of the property to be taken, which depends on an accurate survey of the property.  The right is enforceable by the condemnor by a temporary restraining order and temporary injunction authorizing entry if the landowner refuses to allow it.

The only relief which is available to the landowner depends on whether the condemnor legally has the right to condemn.  If it does not, the landowner is entitled to recover any damages resulting from the unauthorized entry by the condemnor.

Must The Condemnor And Landowner Reveal To The Other
Any Written Appraisal(s) They Have Of The Property?
 
Yes as to both, with certain limitations.  The condemnor is required to provide at the time of the offer to purchase “all existing appraisal reports produced or acquired by [the condemnor] relating specifically to the owner’s property and used in determining the final valuation offer.”  And, ten days after receipt of the condemnor’s appraisal reports, but no later than ten days before the commissioner’s hearing, the landowner must disclose the same type of information to the condemnor.  Thus, neither is required to disclose a report that does not relate specifically to the owner’s property (it may only relate to part of the property or evaluate a limited interest) or which was not used in determining the final valuation offer or owner’s opinion.  That latter limitation may allow an appraisal report that was not used in the valuation process to be withheld.  That game, however, may not be successful because once litigation has begun the parties are entitled to request production of all appraisals relating to the property.

What Happens When There Is No
Agreement On The Value Of The Property?
 
If the parties are unable to reach an agreement, the condemnor will begin the condemnation process by filing a petition to condemn.  That filing results in the selection of three “special commissioners” to hold a hearing to determine the amount of money which should be awarded for the property to be condemned.  The commissioners provide notice of the time and place of the hearing to both the landowner and condemnor, and are authorized to take testimony and to determine the amount of the award.  The condemnor has the burden of proceeding with the hearing and must present evidence of value.  The landowner may or may not attend, and may or may not present valuation evidence, depending on the circumstances of the particular case. There may be legal consequences to an appearance by the landowner at the special commissioner`s hearing which affect his rights if the case goes beyond the initial hearing stage.  Thus, if a landowner chooses to participate in the initial hearing, he is held to have waived his right to complain that the condemnor did not make an effort to agree.  That right may not be all that meaningful, as observed above, but it would be lost by the landowner participating in the special commissioner’s hearing.

Once the commissioners have entered an order determining a valuation amount, either party may disagree and decide to take the case to the next level, which is at the county court or district court, depending on the county.

Three things are very important to understand about this stage of the condemnation process.  First, when the commissioner’s award is made, the condemnor may then (and usually does) deposit the amount of the award in the registry of the court.  That deposit means that the condemnor has the right to take possession of the property condemned and exclude the owner from possession.  Second, the owner is entitled to withdraw the award, but there is an important legal consequence to that withdrawal.  If the award is withdrawn, the owner cannot thereafter dispute the right of the condemnor to take the property, and may not thereafter raise the “no good faith effort to agree” objection, even if the condemnor did not negotiate in good faith.  Thus, if there is any question about whether the condemnor has the power of eminent domain or did not negotiate in good faith, and the landowner wants to fight the condemnation, or force the condemnor to negotiate, he should not withdraw the award.  The award will remain in the registry of the court until the landowner’s particular objection is resolved, and earns interest during that interval.

Third, if a landowner disagrees with the commissioner’s award, and wants to have a judge or jury determine the value, he must file objections to the award within the first Monday following twenty days from the day the commissioners file their findings and order with the court.  If objections are not timely filed, the landowner loses the right to appeal the commissioner’s award, that award becomes final, and the case is over.  Although either party has the right to object to the award, objections are most frequently filed by the landowner.  Once objections are filed, the case proceeds as in other civil cases, by service of citation on the condemnor, and then by the rules of civil procedure as in other cases.

CONCLUSION
As previously stated, the brief answers to the condemnation questions posed in this and in the previous article only begin to touch the many issues which arise in condemnation cases.  Consultation with an experienced attorney should be the first step in responding to a condemnor’s offer to purchase your property for the value which the condemnor believes should be placed on it.