# Texas Condemnation and Eminent Domain Title Issues

## Table of Contents
1. [Overview](#overview)
2. [Eminent Domain Authority](#eminent-domain-authority)
3. [Condemnation Process](#condemnation-process)
4. [Title Impact of Condemnation](#title-impact-of-condemnation)
5. [Pipeline and Utility Easements](#pipeline-and-utility-easements)
6. [Landowner Alternatives](#landowner-alternatives)
7. [Easement Agreement Provisions](#easement-agreement-provisions)
8. [Title Commitment Analysis](#title-commitment-analysis)
9. [Due Diligence Checklist](#due-diligence-checklist)

## Overview

Eminent domain is the government's (or authorized entity's) power to take private property for public use with just compensation. In Texas, condemnation actions directly affect title by creating easements, fee simple transfers, or encumbrances that must be analyzed in every title examination.

**Constitutional basis**: U.S. Constitution (5th Amendment) and Texas Constitution (art. I, § 17)

**Key Texas statutes**: Tex. Prop. Code Ch. 21 (Eminent Domain); Tex. Gov't Code Ch. 2206 (Limitations on Eminent Domain)

## Eminent Domain Authority

### Entities with Condemnation Power in Texas

| Entity Type | Authority | Common Uses |
|-------------|-----------|-------------|
| **State of Texas** | Constitutional | Highways, state facilities |
| **Counties** | Tex. Transp. Code | Roads, drainage, public facilities |
| **Municipalities** | Tex. Local Gov't Code | Streets, utilities, parks, public buildings |
| **School districts** | Tex. Educ. Code | School facilities |
| **Water districts/MUDs** | Tex. Water Code | Water/sewer facilities, drainage |
| **Pipeline companies** | Tex. Nat. Res. Code | Oil, gas, CO2, water pipelines |
| **Electric utilities** | Tex. Util. Code | Transmission/distribution lines |
| **Railroads** | Tex. Transp. Code | Rail corridors |
| **TxDOT** | Tex. Transp. Code | State highways, toll roads |

### Limitations on Eminent Domain (Tex. Gov't Code § 2206)

After the *Kelo v. City of New London* reaction:
- Cannot condemn for economic development purposes
- Cannot transfer condemned property to private entity for economic development
- Agricultural land protections
- Must provide landowner's bill of rights (Tex. Gov't Code § 21.0112)

## Condemnation Process

### Pre-Condemnation Steps

1. **Determination of public use/necessity**: Condemning authority must establish need
2. **Survey and appraisal**: Property surveyed; fair market value determined
3. **Bona fide offer**: Written offer at appraised value (mandatory under Tex. Prop. Code § 21.0113)
4. **Landowner's Bill of Rights**: Must be provided with or before initial offer
5. **Negotiation period**: Minimum 30 days from initial offer before filing suit
6. **Final offer**: Must make final written offer before proceeding to condemnation

### Condemnation Proceedings (Tex. Prop. Code Ch. 21)

1. **Petition filed**: In county court where property located
2. **Special commissioners appointed**: 3 disinterested freeholders
3. **Hearing**: Commissioners hear evidence on value
4. **Award**: Commissioners set compensation amount
5. **Objection period**: Either party may object within 20 days
6. **Trial de novo**: If objection filed, full trial in county court
7. **Deposit of award**: Condemning authority deposits award amount
8. **Possession**: After deposit, condemning authority may take possession

### Inverse Condemnation

When government takes property WITHOUT formal proceedings:
- Physical taking (construction on private land)
- Regulatory taking (regulation eliminates all economic use)
- Landowner must file suit to recover compensation
- Statute of limitations: 10 years (Tex. Civ. Prac. & Rem. Code § 16.026)

## Title Impact of Condemnation

### Types of Takings

**Fee simple taking**: Full ownership transferred to condemning authority
- Eliminates all prior interests in condemned parcel
- Liens attach to condemnation award (proceeds)
- Must analyze impact on remainder parcel

**Easement taking**: Right to use for specific purpose; fee title remains with owner
- Most common for pipelines, utilities, drainage
- Surface owner retains title subject to easement
- May or may not include exclusive possession

**Partial taking**: Only portion of property condemned
- Must analyze effect on remainder
- Severance damages may be awarded
- Access, utility, and use impacts on remainder

### Effect on Existing Liens and Encumbrances

**Deed of trust/mortgage**:
- Condemnation award paid to lienholder to extent of lien
- Surplus to property owner
- Lender may require paydown or release of condemned portion
- Partial condemnation: lender consent may be needed for partial release

**Mineral interests**:
- Fee condemnation may or may not include minerals (depends on instrument)
- Easement typically does not affect mineral rights
- Surface use for mineral operations may conflict with easement

**Lease interests**:
- Tenant entitled to compensation for leasehold interest
- Relocation benefits may apply (federal projects)
- Commercial leases: business damage claims

**Tax liens**:
- Ad valorem tax liens attach to condemnation proceeds
- Must verify tax status before distribution of award

### Recording Requirements

**Instruments to record**:
- Voluntary easement agreement (if negotiated)
- Commissioner's award (if condemnation proceeding)
- Final judgment (if trial)
- Lis pendens during pendency of condemnation suit

## Pipeline and Utility Easements

### Pipeline Easement Analysis

**Types of pipeline easements**:

| Type | Width | Use |
|------|-------|-----|
| **Gathering line** | 25-50 feet | Field collection of oil/gas |
| **Transmission line** | 50-75 feet | Interstate/intrastate transport |
| **Distribution line** | 15-30 feet | Local delivery |
| **Water pipeline** | 30-50 feet | Water transport |

**Key provisions to analyze**:
- Width of permanent easement vs. temporary construction workspace
- Number of pipelines authorized (single vs. multiple)
- Depth requirements (minimum cover)
- Surface restoration obligations
- Indemnification provisions
- Insurance requirements
- Right to assign without landowner consent
- Term: perpetual vs. limited term
- Reversion clause if abandoned

### Electric Utility Easements

**Transmission vs. distribution**:
- Transmission (high voltage): Wider easement, greater restrictions
- Distribution (local service): Narrower, fewer restrictions

**Key provisions**:
- Right to trim/remove trees
- Building restrictions within easement
- Aerial vs. underground
- Right to upgrade/expand facilities

### Water/Sewer Easements

**Municipal utility easements**:
- Typically 15-20 feet wide
- May restrict building, paving, planting within easement
- Access rights for maintenance

**MUD/Water district easements**:
- Often dedicated by subdivision plat
- May include drainage easements
- Check for blanket vs. specific easements

## Landowner Alternatives

### Negotiated Easement Agreement

**Advantages over condemnation**:
- Landowner can negotiate terms, restrictions, compensation
- Can include surface restoration requirements
- Can limit use to specific purposes
- Can include reversion clause
- Faster resolution, lower legal costs

**Key negotiation points**:
1. **Compensation**: One-time payment vs. annual payments
2. **Width**: Minimize permanent easement; separate temporary workspace
3. **Location**: Route selection to minimize impact
4. **Surface restoration**: Specific standards and timeline
5. **Crop/property damage**: Annual payment formula
6. **Insurance**: Require adequate liability coverage
7. **Indemnification**: Pipeline company indemnifies landowner
8. **Assignment restrictions**: Consent required for assignment
9. **Reversion**: Easement terminates if abandoned

### Challenging Condemnation

**Grounds for challenge**:
- Lack of authority to condemn
- No public use or necessity
- Failure to make bona fide offer
- Failure to provide Landowner's Bill of Rights
- Inadequate compensation
- Bad faith in negotiations

## Easement Agreement Provisions

### Essential Title Provisions

**Legal description**: Must precisely describe easement corridor
- Metes and bounds or centerline with width
- Reference to survey plat
- Temporary workspace separately described

**Term and reversion**:
- Most pipeline easements: Perpetual
- Reversion if abandoned or not used within stated period
- Definition of "abandonment" should be specific

**Permitted use**:
- Specific types of product to be transported
- Number and size of pipelines
- Related facilities (valves, meters, pig launchers)
- Restriction against hazardous materials (if desired)

**Surface use restrictions**:
- Maximum depth of cover
- Surface restoration standards
- Restrictions on excavation by landowner within easement
- Building setback from pipeline

## Title Commitment Analysis

### Condemnation-Related Schedule B Exceptions

**Exception type 1: Existing easement**
> "Pipeline easement granted to [Company] in instrument recorded in Vol. ___, Page ___, [County] Real Property Records."

**Analysis**:
- Location and width of easement
- Permitted uses
- Impact on proposed use of property
- Exclusive vs. non-exclusive
- Surface restrictions

**Exception type 2: Pending condemnation**
> "Lis pendens filed in Cause No. ___, [Condemning Authority] v. [Owner], [County] District Court."

**Analysis**:
- Status of proceedings
- Scope of taking (fee vs. easement; full vs. partial)
- Impact on proposed transaction
- May need to await resolution before closing

**Exception type 3: Recorded judgment/award**
> "Special Commissioners' Award recorded in Vol. ___, Page ___, regarding condemnation by [Authority]."

**Analysis**:
- Confirm award paid and accepted
- Check for pending objections or appeals
- Verify scope matches recorded instrument
- Confirm no further proceedings pending

### Endorsements for Condemnation Issues

- **T-19**: May address survey matters related to easements
- **T-23/T-23.1**: Access endorsement if condemnation affects access
- Owner's policy typically excludes eminent domain (Exclusion 2) unless notice recorded

## Due Diligence Checklist

### For Every Transaction
- [ ] Search for recorded easements (pipeline, utility, drainage)
- [ ] Check for pending condemnation proceedings (lis pendens)
- [ ] Review survey for easement locations and encroachments
- [ ] Verify easement widths match recorded instruments
- [ ] Assess impact of easements on proposed use

### For Commercial/Development Transactions
- [ ] Map all easements on site plan
- [ ] Determine if easements can be relocated (developer's expense)
- [ ] Check for blanket easements (common in subdivisions)
- [ ] Review franchise agreements for utility rights
- [ ] Assess whether condemnation risk exists (planned roads, utilities)
- [ ] Review TxDOT plans for highway expansion
- [ ] Check municipal capital improvement plans
- [ ] Verify no pending eminent domain proceedings by any entity

### For Properties with Active Pipelines
- [ ] Identify pipeline operator and product
- [ ] Verify easement terms and compliance
- [ ] Check Railroad Commission records for pipeline permits
- [ ] Assess environmental risk from pipeline operations
- [ ] Review insurance/indemnification provisions
- [ ] Confirm no PHMSA violations or integrity issues

## Red Flags

1. **Multiple pipeline easements**: May severely restrict surface use
2. **Blanket easements without specific location**: Creates uncertainty
3. **Pending TxDOT expansion plans**: May affect property access or take land
4. **Utility easements crossing building envelope**: Must relocate or redesign
5. **Expired or abandoned easements not released**: May need quiet title
6. **Conflicting easement terms**: Pipeline vs. surface owner rights unclear
7. **Missing easement from title commitment**: May indicate unrecorded claim
8. **Railroad right-of-way**: Complex ownership and abandonment issues