Shock Treatment: Negotiating Transmission Line Easements

1/31/2010 9:48:32 AM

(Article Source: Tierra Grande)

The Trans-Texas Corridor threatened to take massive amounts of land for transportation purposes before the project was scrapped. Now, with wind turbines sprouting up across Texas, the need for transmission lines sets the stage for more condemnation of private land. Texas wind farms can generate about 8,000 megawatts (MW), but existing transmission lines can carry approximately 4,500 MWs. Plans are underway to construct 2,334 miles of lines to transport an additional 18,456 MWs. The project anticipates taking over 56,000 acres. This article discusses the condemnation process in Texas and highlights issues landowners need to address to protect their property and property rights.

Three-Stage Process

Texas law divides condemnation into three stages. The first stage is devoid of court involvement. Past judicial interpretation of Chapter 21 of the Texas Property Code indicated that the condemnor must attempt to purchase the needed land in lieu of condemnation. This required condemnors to make a bona fide effort to purchase the land based on its fair market value. The Texas Supreme Court modified this requirement in 2004 (Hubenak v. San Jacinto Gas Transmission Co.).

The court ruled that, “The dollar amount of the condemnor’s offer should not be scrutinized nor compared with other indications of value. A single offer by the condemnor satisfies the requirement regardless of the amount.” Thus, condemnors are no longer obliged to offer fair market value in the first stage. Whether they must negotiate in good faith is questionable. If the parties agree on a purchase price (or "damages" as it is referred to in the statute) in lieu of condemnation, the process ends. Otherwise, it moves to the next stage. Stage 2 begins with the condemnor petitioning the court for the appointment of three disinterested landowners, better known as special commissioners, to conduct a hearing to determine damages from the proposed taking. The commissioners hear evidence from both parties before posting an award. Landowners do not need an attorney for the hearing, but the assistance of an appraiser is recommended. After the commissioners make their decision, the condemnor may start construction of the project by posting adequate security with the court. The construction continues even though either party may appeal the commissioners’ decision. Stage 3 begins when either party appeals the matter to the court. If neither party appeals, the process concludes. If appealed, landowners need both an attorney and an appraiser for representation. The attorney fees and the appraiser fees cannot be recovered as part of a judgment even when the landowners prevail. Stage 3 ends when no further judicial appeals occur. The appeals cannot go beyond the Texas Supreme Court. (For more details on the condemnation process, see "Understanding the Condemnation Process in Texas," recenter.tamu.edu/ pdf/394.pdf.) Four Condemnation Limitations Texas law imposes four restraints on the condemnation process.

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