Bills Seek to Increase the Rights of Texas Landowners Facing Condemnation

Shane Neldner

Shane Neldner, Attorney & Counselor

Several bills have been filed by Senator Lois Kolkhorst this Legislative session that seek to increase the rights of Texas landowners facing condemnation. Three of these bills are Senate Bill 740, Senate Bill 741, and Senate Bill 742.

Senate Bill 740

Senate Bill 740 amends the Property Code to require a condemnation authority to disclose any new or updated appraisals within 10 days of that authority receiving it, or three days before the date of the special commissioners’ hearing — whichever is earlier. If it fails to turn over the new appraisal, that appraisal cannot be used at the hearing. This will help landowners because, too often, a condemning authority shows up at the hearing with a never-before-seen update. The landowner, and his or her experts, have prepared for the previous version, which may contain substantial differences from the update. SB 740 would prevent such a “hearing by ambush.”

Often, easements are drafted in the broadest terms legally permitted. When a landowner seeks greater specificity in these easements, condemning authorities often treat the inclusion of more specific terms as bargaining chips to lower the price they’re willing to pay. Senate Bill 740 eliminates those bargaining chips, and requires specifically-tailored easements, without sacrificing full fair market value.

SB 740 amends the Property Code to require each deed and easement to include specific provisions detailing:

  • the number and spacing of pipelines and power lines
  • width of easements
  • limitations on the easement holder’s means pf access
  • specific types of use permitted under the easement

SB 740 also requires easements to include language:

  • guaranteeing a landowner’s right to grant additional compatible easements to third parties
  • establishing a landowner’s right to have the easement holder maintain, repair, and compensate the landowner for damages to the easement and to the area outside of the easement
  • confirming that the easement holder will indemnify and insure the landowner, and providing specific details on the limits of that

To discourage condemnors from “low-balling” landowners in their final offers prior to filing a lawsuit, SB 740 amends the Property Code to award costs, attorney’s fees, and other professional fees if the special commissioners’ award is at least 20% higher than the final offer.

To prevent a non-governmental condemnor, such as a pipeline or powerline company, from intentionally dissolving it’s business in order to avoid paying a high trial award, SB 740 amends the Property Code to require such condemnors that want to appeal the amount of the trial award, to post a surety bond in the amount of the award. If this bond is not paid in the required time, the condemnor’s appeal will be subject to dismissal, the condemnor loses the right to remain on the property, the condemned property returns to the landowner, and the condemnor must reimburse the landowner for all reasonable damages, costs, expert’s expenses, and fees.

Finally, SB 740 amends the Tax Code to reduce a landowner’s tax burden on property subject to condemnation.

Senate Bill 741

Senate Bill 741 primarily amends the Property Code to include royalties or percentages of the net profits generated from the project as a means of compensating a landowner for taken land.

Senate Bill 742

Senate Bill 742 also amends the Property Code to require greater specificity in the terms of pipeline deeds and easements. It includes much of the same provisions as SB 740, but also requires specificity on:

  • the depth of pipelines
  • the types of material to be transported in those pipelines.

It also puts limitations on:

  • pipeline installation methods
  • a condemnation authority’s ability to transfer its interest to an entity without eminent domain authority
  • third party access to the easement.
  • for power lines, the number and carrying capacity of the lines over the easement.

All of these amendments, if passed by the Legislature in their current form, would go into effect for those proceedings, appeals, and agreements entered into on or after September 1, 2017.

These bills have great potential to strengthen the rights of landowners facing condemnation. We will continue to monitor these bills and inform landowners of the outcome.

If a condemning authority, or an agent of such an authority, has contacted you to acquire your land, or if you want to know how a project you have heard about will affect you, call Patrick Reznik.