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 and authorized entities use eminent domain without communicating with landowners about the process and their rights. Property owners should be treated fairly and protected from abusive eminent-domain practices.
Texas REALTORS® position
Our association 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.
Our association supports legislation that:
- Requires pipeline and electric utility easement agreements to include a list of basic terms to protect the landowner during construction and future use of the easement and requiring these companies to use a standard document provided by the Attorney General that includes these terms.
- Provides landowners with information about the project seeking their land and about their rights by requiring a public meeting in each county where affected landowners can ask questions about the project and the company’s eminent domain authority—as is required for public entities with eminent domain authority—and requiring the landowners to be informed of their rights and how the company will calculate fair compensation.
- Protects the landowner’s right to receive a bona fide offer by ensuring a landowner receives an initial offer of fair compensation and information necessary to evaluate whether the initial offer is truly a bona fide offer and requiring a bad actor that negotiates in bad faith to make an additional “penalty” payment to the property owner.
In 2019, lawmakers considered several eminent domain reform bills, including one comprehensive proposal developed in collaboration with key stakeholders, including Texas REALTORS®. Ultimately, a final agreement was not reached but versions of the bill did pass out of both chambers.
We expect to see legislation filed this session that will address the remaining unresolved issues, including constitutional issues of who should have the burden of proof, what kind of entities have condemnation authority, and the definition of public use.
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.