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Texas Eminent Domain Laws and Property Rights

PROPERTY RIGHTS IN THE STATE OF TEXAS

The State’s takings clause is found in Article I, Section 17 of the Texas Constitution, which provides: No person’s property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person; and, when taken, except for the use of the State, such compensation shall be first made, or secured by a deposit of money.

This is theoretically broader in concept than the federal takings clause, which only guarantees compensation in the event of a taking of property. Under this provision, government is obligated to pay compensation for any physical taking of property and for damages to the market value of property resulting from a physical taking. Additionally, if governmental action destroys all economically beneficial use of property, this is a taking triggering government’s compensation obligation. In the absence of a physical taking or a total destruction of beneficial use, however, governmental action will only result in a taking, and compensation, if a balance of factors indicates the action constitutes an unreasonable interference with distinct investment-backed expectations.

Chapter 21 of the Texas Property Code provides a framework for governmental and public-use entities to acquire private property for public use. Texas is a quick-take state, which means a condemning authority can acquire a right of possession needed to proceed with construction of its project before the landowner is afforded full process for its compensation claim. In the administrative phase, special commissioners appointed by the trial court enter a preliminary award of compensation which may be deposited into the court’s registry. Either party may file an appeal of the award, converting the proceedings into a judicial case. A jury trial is typically available.

If a court determines that there is not public use served by the condemning authority’s project for which the property is to be acquired, the case can be dismissed, and the landowner may recover its reasonable and necessary attorney’s fees and expenses incurred towards defending against the taking. Otherwise, landowners bear their own fees and expenses incurred in condemnation cases.
If an entity takes, damages, or destroys property without formally exercising its eminent domain power following this statutory framework, the landowner can recover the damages owed by filing an inverse condemnation action.

Meet OCA's Texas Attorney

Charles B. McFarland

Charles McFarland represents property owners in securing just compensation when government takes private property for public use. While his experience has included takings projects for highway expansion, pipelines, electric transmission lines, and flood control, Charles’s principal practice is focused on highway and roadway widening projects impacting retail, commercial, industrial, and special-use properties. He has been selected by his peers for inclusion in The Best Lawyers in America® in the practice area of Eminent Domain and Condemnation Law and Texas Super Lawyers for Eminent Domain. Best Lawyers recently named Charles its 2020 "Lawyer of the Year" for Eminent Domain and Condemnation Law for Houston, Texas. Charles additionally has the AV Preeminent Rating, Martindale-Hubbell's highest possible rating for both ethical standards and legal ability. He has been board certified by the Texas Board of Legal Specialization in Civil Trial Law since 2003.

A SUMMARY OF TEXAS EMINENT DOMAIN LAWS

The following responses are intended to provide general information about eminent domain laws in the featured state. Such information does not constitute legal advice. Anyone interested in learning more about eminent domain law and the impact it may have on a given set of facts should consult with an OCA attorney or another attorney experienced in handling eminent domain cases.

  • Who Can Exercise Eminent Domain Laws?

    The State, as the sovereign, has the inherent power of eminent domain. Through the legislature, Texas has delegated the power of eminent domain to many political subdivisions and to some private concerns deemed to serve the public use, such as railroads, gas utilities, and common carrier pipelines.

  • What Are the Legal Requirements for Exercising the Power?

    A governmental or public-use entity with the power of eminent domain must comply with a number of statutory requirements before filing a condemnation case to acquire private property for public use. Once property is identified as potentially necessary for a public project, the entity must provide the landowner with a copy of the Landowner’s Bill of Rights, which sets for a general description of the landowner’s rights when faced with a condemnation and the procedures applicable.

    Any exercise of the power of eminent domain must serve a public use. The condemning authority must pay adequate compensation, typically measured in terms of market value, and must make a good-faith offer of compensation before filing any condemnation action. If a condemning authority’s initial offer is not accepted, it must make a final offer before filing the condemnation petition, and this final offer must be supported by an appraisal estimating the compensation owed for the taking.

  • What Limitations or Defenses Exist?

    The most obvious limitation on a condemning authority’s exercise of the power of eminent domain is the public use requirement. As a practical matter, however, challenges to the public necessity of a condemning authority’s project face a decisively uphill battle.

    The compensation obligation can serve as a more practical deterrent to a governmental or public- use entity’s abuse of the eminent domain power.

  • What Constitutes a Public Purpose?

    Texas courts have held that a “public use” is one which concerns the whole community in which it exists, not a particular individual or a number of individuals, and have recognized that the question is largely one for the legislature, the courts refusing to interfere except to inquire whether the legislature could reasonably have considered the use a public one. The term is not limited to business necessity and ordinary convenience, but may extend to matters of public health, recreation and enjoyment.

    When a condemning authority’s governing body makes a determination of public necessity, it is not subject to judicial review unless the property owner can establish that the condemning authority has committed fraud or has acted purely arbitrarily.

  • How is Compensation Determined?

    In whole takings cases, compensation is typically measured by the market value of the property before the taking, without considering any influence of the project for which it is acquired. In partial takings cases, the measure of compensation is the difference in market value of the whole property before the taking, without considering any influence of the project for which it is acquired, and the remaining property after the taking, taking into consideration the uses to which the part acquired is to be put. In all instances, the landowner is entitled to have his property valued at its highest and best use, being the reasonably probable and legal use of the property which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

    To estimate compensation, it is often necessary to engage an independent real estate appraiser. For unimproved properties, the Sales Comparison Approach is typically the only relevant methodology for estimating market value. For improved properties, the appraiser may consider the Improved Sales Comparison Approach, the Cost Approach, the Direct Income Capitalization Approach, or some combination of these three approaches in concluding a reconciled market value.

  • How Is Market Value Defined?

    In Texas, “market value” is defined under the willing-buyer, willing-seller test, i.e. the price that the property would bring when it is offered for sale by one who desires to sell, but is not obligated to sell, and is bought by one who desires to buy, but is under no necessity to buy, taking into consideration all the uses to which the property is reasonably adaptable and for which it either is or in all reasonable probability will become available within the reasonable future.

  • What About Recovering Damages to Remaining Property

    In a partial takings case, the landowner is entitled to the market value of the property taken and damages for the decrease, if any, resulting to the market value of its property that remains after the taking. Importantly, not all of a project’s impacts on market value are compensable, at least as against an entity with sovereign or governmental immunity. For example, impacts suffered in common with the general community are considered “community damages” and are not recoverable. Landowners do not have a property interest in the traffic that travels in front of their properties, and therefore a diversion of traffic or increased circuity of travel are not compensable. Access to and from one’s land is a property right, but not every change in access is compensable. A material impairment of direct access on or off the property is compensable.

  • Is the Landowner Entitled to Recover Reasonable Attorney Fees? Expert Fees? Litigation Costs?

    Unless a statutory condemnation case is dismissed for lack of eminent domain authority or public use, landowners in the State of Texas cannot recover reasonable and necessary fees or expenses incurred in a condemnation case. All prevailing parties may recover taxable court costs, but these costs do not include attorneys’ fees or expert fees.

Texas

McFarland PLLC
811 Louisiana St, Suite 2520
Houston, TX 77002-1401
Tel: (713) 325-9700

cmcfarland@mcfarlandpllc.com

Education

  • University of Texas School of Law, J.D.,1995 (Order of the Coif)
  • University of Texas, B.A. with honors, 1991

Honors and Awards

  • Best Lawyers in America, Eminent Domain and Condemnation Law, 2011-2019
  • Texas Super Lawyers, Eminent Domain, Thomson Reuters, published in Texas Monthly, 2012-2018
  • AV Preeminent Rating, Martindale-Hubbell
  • Board Certified, Civil Trial Law by the Texas Board of Legal Specialization (since 2003)

 

 

Charles McFarland is the founding member of the Texas law firm of McFarland PLLC. He is Board Certified in Civil Trial Law by the Texas Board of Legal Specialization and achieved this certification by trying condemnation cases. Charles has tried dozens of condemnation jury trials and handled several hundred condemnation hearings before special commissioners.

Mr. McFarland has represented property owners across Texas in significant condemnations against the Texas Department of Transportation as well as various local and County agencies.

Charles has been recognized as an expert in real estate valuation matters, has published several articles and lectures regularly, both in Texas and nationally, on eminent domain and real estate valuation issues.

Charles is the Past President and current Board Member of the Texas Association of Civil Trial and Appellate Specialists, established in 1986 to promote the availability, accessibility and quality of the services of civil trial and appellate lawyers to the public. He is a lifetime fellow of both the Texas Bar Foundation and the Houston Bar Foundation, dedicated to providing legal representation to the indigent, promote community understanding of our legal system and foster the administration of justice. He is a Keeton Fellow to the University of Texas School of Law. He is also the Past Chair of the Damages Subcommittee of the Condemnation, Zoning and Land Use Litigation Committee of the Section of Litigation for the American Bar Association. Charles is also a frequent speaker and panelist on the topic of Condemnation and Eminent Domain Law and has been a contributing author to the American Bar Association, the American Law Institute, and other publications. 

Significant Eminent Domain Representations

  • Favorable award as lead counsel against the State of Texas in highway widening case on State Highway 146 involving property improved with a pharmacy
  • Favorable jury verdict as lead counsel against the State of Texas in condemnation case involving the extension of the Grand Parkway (SH 99) through a planned regional retail shopping center in Harris County
  • Favorable award as lead counsel against the State of Texas in highway widening case on IH 45 South (the Gulf Freeway) involving property improved with a fast food restaurant
  • Favorable award as lead counsel against the State of Texas in highway widening case on IH 45 South (the Gulf Freeway) involving property improved with a retail store
  • Favorable jury verdict as lead counsel against the State of Texas in condemnation case involving the extension of the Grand Parkway (SH 99) through the 500-acre retail town center component of a 1400-acre master-planned community in Montgomery County
  • Favorable settlement as lead counsel against the State of Texas in highway widening case on US 290 (the Northwest Freeway) involving property improved with retail and industrial buildings
  • Favorable settlement as lead counsel against the State of Texas in highway widening case on IH 45 South (the Gulf Freeway) involving multiple retail pad sites
  • Favorable settlement as lead counsel against the State of Texas in highway widening case on IH 45 South (the Gulf Freeway) involving property improved with restaurant pad sites and a retail shopping center
  • Favorable award as lead counsel against the State of Texas in highway widening case on IH- 610/US 290 Interchange involving property improved with retail shopping center
  • Favorable jury verdict as lead counsel against the State of Texas for big box retailer in highway widening case in College Station, Texas
  • Favorable award as lead counsel against the State of Texas involving retail bank and office building in Pearland, Texas
  • Favorable jury verdict as lead counsel in highway widening case against the State of Texas involving multi-use retail property in Dallas, Texas
  • Favorable settlements as lead counsel in highway widening cases on IH-10 West (the Katy Freeway) against the State of Texas involving properties improved with a big box retailer and with an automotive retail store and repair center
  • Favorable awards and settlements as lead counsel in highway widening cases against the State of Texas involving properties improved with gas station/convenience stores in Houston, Lufkin, and Dallas
  • Favorable jury verdicts as co-counsel in highway widening cases on IH-10 West (the Katy Freeway) against the State of Texas involving properties improved with front-line retail space in a power center and a big box retailer in Houston, Texas
  •  Favorable jury verdict as lead counsel against Harris County, Texas in roadway widening case involving property improved with midrise office building
  • Favorable settlement as lead counsel against the State of Texas in highway widening case for SH 249 involving the taking of a church building and parking
  • Favorable settlement as lead counsel against the State of Texas in highway widening case on IH- 610/US 290 Interchange involving property improved with retail automotive service facility
  • Favorable settlement as lead counsel against the State of Texas in highway widening case on US 290 (the Northwest Freeway) involving industrial property improved with industrial pipe fitting, manufacturing, and storage facilities
  • Favorable settlement as lead counsel in highway widening case on IH-10 West (the Katy Freeway) against the State of Texas involving property improved with multi-family residential townhome development
  • Favorable jury verdicts and settlements as lead counsel in high-voltage electrical transmission line cases against CenterPoint Energy and the Lower Colorado River Authority involving rural acreage in Austin, Waller, Wharton, and Harris Counties
  • Favorable jury verdict as lead counsel in whole for flood control purposes against Harris County, Texas involving residential-use property in Houston, Texas
  • Favorable jury verdict as co-counsel in highway widening case against Harris County, Texas involving property improved with collision center in Houston, Texas

 

 

Charles McFarland is the founding member of the Texas law firm of McFarland PLLC. He is Board Certified in Civil Trial Law by the Texas Board of Legal Specialization and achieved this certification by trying condemnation cases. Charles has tried dozens of condemnation jury trials and handled several hundred condemnation hearings before special commissioners.

Mr. McFarland has represented property owners across Texas in significant condemnations against the Texas Department of Transportation as well as various local and County agencies.

Charles has been recognized as an expert in real estate valuation matters, has published several articles and lectures regularly, both in Texas and nationally, on eminent domain and real estate valuation issues.

Charles is the Past President and current Board Member of the Texas Association of Civil Trial and Appellate Specialists, established in 1986 to promote the availability, accessibility and quality of the services of civil trial and appellate lawyers to the public. He is a lifetime fellow of both the Texas Bar Foundation and the Houston Bar Foundation, dedicated to providing legal representation to the indigent, promote community understanding of our legal system and foster the administration of justice. He is a Keeton Fellow to the University of Texas School of Law. He is also the Past Chair of the Damages Subcommittee of the Condemnation, Zoning and Land Use Litigation Committee of the Section of Litigation for the American Bar Association. Charles is also a frequent speaker and panelist on the topic of Condemnation and Eminent Domain Law and has been a contributing author to the American Bar Association, the American Law Institute, and other publications. 

Significant Eminent Domain Representations

  • Favorable award as lead counsel against the State of Texas in highway widening case on State Highway 146 involving property improved with a pharmacy
  • Favorable jury verdict as lead counsel against the State of Texas in condemnation case involving the extension of the Grand Parkway (SH 99) through a planned regional retail shopping center in Harris County
  • Favorable award as lead counsel against the State of Texas in highway widening case on IH 45 South (the Gulf Freeway) involving property improved with a fast food restaurant
  • Favorable award as lead counsel against the State of Texas in highway widening case on IH 45 South (the Gulf Freeway) involving property improved with a retail store
  • Favorable jury verdict as lead counsel against the State of Texas in condemnation case involving the extension of the Grand Parkway (SH 99) through the 500-acre retail town center component of a 1400-acre master-planned community in Montgomery County
  • Favorable settlement as lead counsel against the State of Texas in highway widening case on US 290 (the Northwest Freeway) involving property improved with retail and industrial buildings
  • Favorable settlement as lead counsel against the State of Texas in highway widening case on IH 45 South (the Gulf Freeway) involving multiple retail pad sites
  • Favorable settlement as lead counsel against the State of Texas in highway widening case on IH 45 South (the Gulf Freeway) involving property improved with restaurant pad sites and a retail shopping center
  • Favorable award as lead counsel against the State of Texas in highway widening case on IH- 610/US 290 Interchange involving property improved with retail shopping center
  • Favorable jury verdict as lead counsel against the State of Texas for big box retailer in highway widening case in College Station, Texas
  • Favorable award as lead counsel against the State of Texas involving retail bank and office building in Pearland, Texas
  • Favorable jury verdict as lead counsel in highway widening case against the State of Texas involving multi-use retail property in Dallas, Texas
  • Favorable settlements as lead counsel in highway widening cases on IH-10 West (the Katy Freeway) against the State of Texas involving properties improved with a big box retailer and with an automotive retail store and repair center
  • Favorable awards and settlements as lead counsel in highway widening cases against the State of Texas involving properties improved with gas station/convenience stores in Houston, Lufkin, and Dallas
  • Favorable jury verdicts as co-counsel in highway widening cases on IH-10 West (the Katy Freeway) against the State of Texas involving properties improved with front-line retail space in a power center and a big box retailer in Houston, Texas
  •  Favorable jury verdict as lead counsel against Harris County, Texas in roadway widening case involving property improved with midrise office building
  • Favorable settlement as lead counsel against the State of Texas in highway widening case for SH 249 involving the taking of a church building and parking
  • Favorable settlement as lead counsel against the State of Texas in highway widening case on IH- 610/US 290 Interchange involving property improved with retail automotive service facility
  • Favorable settlement as lead counsel against the State of Texas in highway widening case on US 290 (the Northwest Freeway) involving industrial property improved with industrial pipe fitting, manufacturing, and storage facilities
  • Favorable settlement as lead counsel in highway widening case on IH-10 West (the Katy Freeway) against the State of Texas involving property improved with multi-family residential townhome development
  • Favorable jury verdicts and settlements as lead counsel in high-voltage electrical transmission line cases against CenterPoint Energy and the Lower Colorado River Authority involving rural acreage in Austin, Waller, Wharton, and Harris Counties
  • Favorable jury verdict as lead counsel in whole for flood control purposes against Harris County, Texas involving residential-use property in Houston, Texas
  • Favorable jury verdict as co-counsel in highway widening case against Harris County, Texas involving property improved with collision center in Houston, Texas
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