Landowners have few options in condemnations

By Bobby Horecka March 3, 2006 www.txfb.org Texas Farm Bureau
Field Editor TEXAS AGRICULTURE [Texas Farm Bureau publication] By Bobby Horecka LINK: http://www.txfb.org/TexasAgriculture/2006/030306/030306landowners.htm 

Texas landowners don't have many options when it comes to protecting their property when governments begin talking eminent domain.

Not, at least, until state laws regarding those issues are better defined by the state legislature, said Judon Fambrough, private property advocate with the Real Estate Center at Texas A&M University.

Traditionally, Fambrough said, local, county and state governmental entities were required by the interpretation of the law to offer landowners a "fair market value" for any property they intend to claim by means of eminent domain.

But all that changed on July 2, 2004, when the Texas Supreme Court issued its ruling in the Hubenak v. San Jacinto Gas Transmission Co. case. "That one case threw out all incentives to receive fair market value. Period," Fambrough said. "For one, it removed several key restraints in the condemnation process that were favorable to landowners. But most of all, it changed how the process of the law worked when dealing with such cases."

In all cases dealing with condemnation proceedings, a basic three step process is involved: 1) the entity wanting the land must negotiate for its purchase; 2) if negotiations fail, they may go before a three-person appointed commission for a ruling; and 3) if parties are still unhappy with the result, the matter goes to a trial situation before a judge and jury.

Prior to 2004, most cases that made it to the third level in the process were often sent back to step one, Fambrough said, which forced the governmental body to come up with a better offer to the landowner.

But that changed with the Hubenak case. The courts ruled that "the condemnor's offer generally should not be scrutinized or compared with other indications of value." In essense, any offer made by the condemnor satisfied the letter of the law. It also forced the burden of proving the land's worth to the landowner, not the condemnor.

"This is the only matter in civil law that I am aware of where the burden of proof lies with the defendant," Fambrough said. "You, as the landowner, must prove that the offer you were given is inadequate."

What that means for the landowner is that they must obtain—at their own expense—an independent appraisal of the land, and in so challenging, also pick up the tabs of legal representation, he said.

"Even if you win, the courts ruled that you cannot collect any additional amount to cover attorney fees and court costs," Fambrough said, adding that it can often cost as much to defend a piece of property as it is worth.

In real terms, that means if a governmental entity opts to condemn a piece of property that is actually worth $2,000 an acre, Fambrough said, there is no incentive for them to offer much more than $1,000 on the property.

"It will cost you at least $1,000 to prove them wrong," Fambrough said, "And they know it."

Several private property advocates, including Texas Farm Bureau, are working on legislation to change the letter of the law, but at least for the next couple of years, Fambrough said, that is what landowners will face until the law is changed.