Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

Need a little legal ammo? Search for caselaw on legal theories and defenses here:

Friday, May 11, 2012

Condemnation of privately-owned land by government [elsewhere called expropriation]


CONDEMNATION OF REAL PROPERTY FOR PUBLIC USE IN TEXAS

What is the land owner entitled to when the government takes his or her property?
  
Under the Texas Constitution, governmental entities are required to adequately compensate landowners when real property is taken for public use. Tex. Const. art. I, § 17; Cnty. of Bexar v. Santikos, 144 S.W.3d 455, 459 (Tex. 2004).
  
When a governmental entity condemns real property, the normal measure of damages is the fair market value of the land at the time of the taking. Tex. Prop. Code Ann. § 21.042(b); Zwahr, 88 S.W.3d at 627.  Thus, the central issue in the typical condemnation case is how to measure the market value of the condemned property. See City of Harlingen v. Estate of Sharboneau, 48 S.W.3d 177, 182 (Tex. 2001).
 
Market value is “the price the property will bring when offered for sale by one who desires to sell, but is not obligated to sell, and is bought by one who desires to buy, but is under no necessity of buying.” Id.

METHODS FOR DETERIMING FAIR-MARKET VALUE OF REAL PROPERTY
  
The three traditional approaches to determining market value are the comparable sales method, the cost method, and the income method. Id. Regardless of the appraisal method used by an expert, the goal of the inquiry is always to find the fair market value of the condemned property. Id. at 183. An appraisal method is valid only if it produces an amount that a willing buyer would actually pay to a willing seller. Id.
  
Courts have long favored the comparable sales method when determining the market value of real property: If the goal of an appraisal is to ascertain market value, then logically there can be no better guide than the prices that willing buyers and sellers actually negotiate in the relevant market.
  
Under a comparable sales analysis, the appraiser finds data for sales of similar property, then makes upward or downward adjustments to these sales prices based on differences in the subject property. Id. Comparable sales must be voluntary and should take place near in time to the condemnation, occur in the vicinity of the condemned property, and involve land with similar characteristics. Id. at 182.
 
Comparable sales need not be in the immediate vicinity of the subject land, so long as they meet the test of similarity. See City of Austin v. Cannizzo, 153 Tex. 324, 267 S.W.2d 808, 815 (1954). But if the comparison is so attenuated that the appraiser and the fact finder cannot make adjustments for differences, a court should refuse to admit evidence of a “comparable” sale. See, e.g., Holiday Inns, Inc. v. State, 931 S.W.2d 614, 623-24 (Tex. App.-Amarillo 1996, writ denied) (remoteness in time); Urban Renewal Agency v. Georgetown Sav. & Loan Ass'n, 509 S.W.2d 419, 421-22 (Tex. Civ. App.-Austin 1974, writ ref'd n.r.e.) (similarity of neighborhood).

Texas courts have long held it appropriate, in the context of condemnation proceedings, for a jury to consider “all factors . . . which would reasonably be given weight in negotiations between a seller and a buyer” of the property. Cannizzo, 267 S.W.2d at 814, 815 (instructing the fact finder to consider all uses to which the land is “reasonably adaptable and for which it either is or in all reasonable probability will become available within the reasonable future”). Courts should admit as market-value evidence “such matters as suitability and adaptability, surroundings, conditions before and after, and all circumstances which tend to increase or diminish” market value. Coble v. City of Mansfield, 134 S.W.3d 449, 454 (Tex. App.-Fort Worth 2004, no pet.) (citing State v. Carpenter, 126 Tex. 604, 89 S.W.2d 194, 200 (1936)). See also State v. McCarley, 247 S.W.3d 323, 325-26 (Tex. App.-Austin 2007, pet. denied) (jury determining fair market value in a condemnation proceeding may consider current and reasonably probable future potential uses of the property, and consequential damages that in reasonable foreseeability will result from the condemnor's uses of the condemned property, “as such factors would ordinarily be given weight by willing buyers and sellers and, therefore, would be reflected in the property's fair market value.”). A jury hearing opinion and “all testimony bearing on the issues of [condemned property's market] value” is “enlightened to give weight to the evidence and render its own conclusion.” Reeves v. City of Dallas, 195 S.W.2d 575, 579 (Tex. Civ. App.-Dallas 1946, writ ref'd n.r.e.). This Court noted an expert witness and a jury would consider: [t]he location and environment of the property, the purchase and sale price in an open market of similar property in the same or near-by vicinity, the price that was voluntarily paid for the property taken, the availability of the property for similarly zoned business, the kind and character of occupancy, the encumbrances, contracts, liens, leases, etc., and many other elements . . . .Id.

SOURCE: DALLAS COURT OF APPEALS - 05-10-00601-CV – 5/9/2012





SOURCE: DALLAS COURT OF APPEALS - 05-10-00601-CV – 5/9/2012