This land is your land? Not with eminent domain
The recent surge in population has meant new roads, schools and power lines all across Houston. But to get the land, they need to widen roads and undertake other building projects, government agencies and utility companies rely on eminent domain laws. Most of the time, landowners accept the first offer they get. But they don’t have to, says Houston lawyer Justin Hodge of Johns Marrs Ellis & Hodge, who represents individuals in eminent domain disputes.
Hodge spent a recent morning talking about the surge in public projects and the money many landowners leave on the table. His edited remarks follow.
Q: What is eminent domain?
A: It’s the government’s right to take a landowner’s property for a public purpose. It derives from the king of England’s ability to take someone’s property. We have a constitutional right under the Fifth Amendment to just compensation. We have the same right under the Texas Constitution.
Q: How does eminent domain affect average citizens?
A: The most common would be a road project. Currently in Houston we see that with the Grand Parkway, we’re seeing it with the widening of Interstate 45 to Galveston. And we’re seeing it with acquisitions of land for new schools, sports stadiums, pipelines, power lines, flood control easements and the somewhat contentious high-speed rail project.
Q: So what happens?
A: The government goes through a series of public meetings for the need to widen a highway. Ultimately, the state will approve the widening or in the case of the Grand Parkway create a new highway. Once the state approves the project, any landowner with land in the path of the project is approached by the state to acquire the land. The landowner can accept or reject the offer. If a landowner refuses, the state would file a lawsuit.
Q: How is land value determined?
A: Offers are not routinely not at fair market value. The government knows that 80 percent to 90 percent of landowners will accept the first offer and routinely offer below market value. There are other reasons land is often undervalued. For one thing, government agencies have to live within their budgets. And they work on volume. On large scale projects like the Grand Parkway, government agencies may be in a rush to get the offers out. Along the way they may miss characteristics that would drive up the price.
Q: How can you get more for your property?
A: You reject the offer. The state then sues to take your property. You have a constitutional right to a jury trial to determine the fair market value. Most of the time, the case is settled before it gets to a jury. We recently had a case where the state offered less than $2,000 for less than an acre for a highway expansion, and the case settled for about $7 million.
The state grossly underestimated the value, and there was a change in Texas law two legislative sessions ago that allows landowners to get damages if they lose access to a road, such as a driveway.
Q: How about legal fees? Do landowners get reimbursed for the money they spend fighting the initial valuation, especially when the cases go before a jury?
A: Texas law does not allow the recovery of attorney fees. Landowners have to pay the bills.