Property Valuation and Just Compensation

Under Texas eminent domain law, a property owner is entitled to receive the fair market value of the property being taken.  If only a part of the property is being taken—for example, a sliver of land to expand a roadway or an easement to lay an underground pipeline—the property valuation will consider the effect on the landowner’s remaining property.  The valuation will also consider factors particular to the property owners, such as their use and enjoyment of the property.

For example, the effect that power transmission lines have on a property owner’s view of the remaining property may be a factor considered in the valuation.  If power transmission lines or underground pipelines affect the market value of the remaining land and the landowner’s ability to sell the land, such factors may also be considered.  And the ability of the landowner or the landowner’s customers to access the property may be a critical valuation factor.

The potential uses of the land may also be taken into account.  In fact, a landowner is entitled to have the “highest and best use” of the property considered in reaching a valuation number.  Not surprisingly, the condemning entity and the landowner may not agree on what the “highest and best use” is for a particular property.  For example, the owner of a North Texas home located on a busy commercial street was initially offered an amount similar to homes on nearby residential streets.  Because of the potential commercial uses of the land, the landowner did not accept the offer, eventually went to trial, and won a verdict in an amount many times greater than the initial offer.