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Eminent domain

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Issue
The Texas Constitution limits the use of eminent domain by requiring adequate compensation for the land on which eminent domain is used. The exercise of this power, while considered a necessary tool of government, has been argued to have been expanded and abused. Texans continue to struggle with an unbalanced set of laws at odds with a state known for private-property rights.

What does this mean for the real estate industry?
Private-property rights are threatened whenever the government uses eminent domain. Property owners should be treated fairly and protected from abusive eminent-domain practices.

The Texas REALTOR® position
The Texas Association of REALTORS® understands the need for legitimate property condemnations; however, landowners should be justly and timely compensated. As the leading advocates for private-property rights, Texas REALTORS® are uniquely positioned to ensure fair treatment of property owners.

Significant improvements can be made to enhance protections on private-property rights for Texans.

The Texas Association of REALTORS® supports legislation that:

  • Reimburses the costs and fees incurred by property owners in eminent domain proceedings if final damages awarded are 125% greater than the entity’s offer

  • Clarifies that a true bona fide offer should require the condemning entity to provide minimum property rights protection and delineate all uses or restrictions for the condemned property

  • Allows for the admissibility in court of freely negotiated comparable easements in condemnation proceedings

  • Requires a condemning entity to either pay the jury award or secure a bond in the amount of the jury award in order to guarantee payment to a prevailing landowner at the conclusion of the legal proceedings

  • Allows for any written agreement made between the condemning authority and the property owner during a condemnation case to be enforceable and property taxes to cease to be applied on dispossessed property

  • Clarifies state law that allows condemning entities and landowners to agree to rental payments

  • Requires appraisals or opinions of property value, and damages caused by the condemnation, to be made available to the landowner at the time of the initial and final offer, no less than three business days prior to the special commissioners court hearing.

Legislative outlook
Some issues remain unresolved, including the constitutional issues of who should have the burden of proof, what kind of entities have condemnation authority, and the definition of public use.

Historical perspective
In 2005, during the 79th Legislature’s second called session, lawmakers passed SB 7 prohibiting entities with the authority to use eminent domain from condemning private property for economic purposes.

In November 2009, Texans took the first step toward strengthening private-property rights against abusive eminent domain by passing Proposition 11 with an overwhelming 81% of the vote.

Eminent domain was one of Gov. Perry’s emergency legislative items for the 82nd Texas Legislature in 2011. SB 18, which strengthened property owners’ rights in eminent-domain takings, passed and was signed into law. The law limits the purposes for which a property may be condemned and specifies that taken property must be made available for resale to the original owner if it’s not used for its intended purpose after 10 years.

In 2013, during the 83rd Texas legislative session, the Texas Open Beaches Act (HB 3459) granted the public the free and unrestricted right to access state-owned beaches and a right to use any public beach or larger area extending from the line of mean low tide to the line of vegetation bordering the Gulf of Mexico.

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