LEGAL PITFALLS OF RIGHT OF WAY : DELAYS IN ACQUISITION. Darby F. Venza, ROW Attorney
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1 LEGAL PITFALLS OF RIGHT OF WAY : DELAYS IN ACQUISITION Darby F. Venza, ROW Attorney
2 WHY NOT JUST GO OUT AND BUY THE LAND? The Acquisition of ROW for TxDOT projects, whether by voluntary purchase, donation, or eminent domain, is a complex legal process Relevant Laws Texas and U.S. Constitution National Environmental Policy Act (NEPA) 42 USC 61: Uniform Relocation Assistance and Real Property Acquisition Policies Act Texas Government Code Texas Property Code Texas Transportation Code Regulations 43 Texas Administrative Code, Chapter Code of Federal Regulations, Part 24 6
3 ENVIRONMENTAL CLEARANCE The National Environmental Policy Act (NEPA) requires that certain actions of the Federal Government must undergo a review process to determine if their proposed actions have significant environmental effects and to consider the environmental and related social and economic effects of their proposed actions This includes the approval of the alignment of and or reimbursement for Federal Aid highway projects Only upon final environmental clearance is ROW clear to begin making offers to landowners Surveying, mapping, and appraisals can all occur prior to Environmental Clearance. All MUST occur prior to any offer to purchase. 7
4 Uniform Relocation Assistance Act A Federal Law which establishes minimum standards for federally funded programs and projects that require the acquisition of real property (real estate) or displace persons from their homes, businesses, or farms. This requires, amongst other things, that TxDOT: Pay for property based on an appraisal before possession Provide relocation advisory services to displaced tenants and owner occupants Provide a minimum 90 days written notice Reimburse for moving expenses Provide payments for the added cost of renting or purchasing comparable replacement housing Provide a second, 30 day notice to vacate Texas Property Code Section requires that TxDOT and other agencies conform to this process when acquiring real property Furthermore, all property used in a Federal Aid Project must have been acquired in accordance with this law 8
5 CONDEMNATION OF REAL PROPERTY Texas Transportation Code : The commission may acquire by purchase, on terms and conditions the commission considers proper or by the exercise of eminent domain 9
6 EMINENT DOMAIN PROCESS IN TEXAS Governed by Chapter 21 of the Tex. Property Code & Tex. Gov t. Code A series of strict, detailed steps with mandatory timelines 1. An initial offer along with TxDOT s appraisal provided to landowner days later, a final offer is provided to the landowner days later a petition in condemnation may be filed. However, prior to this petition, the Texas Transportation Commission must make a finding of necessity for public use in a Minute Order. 4. After filing of suit, Court appoints Special Commissioners. Hearing held at least 20 days after appointment. Parties must received 20 day notice. Parties given reasonable opportunity to strike commissioners. Scheduling of the date hearing is NOT within TxDOT s control. 5. Hearing held; Award issued. As soon as award is deposited, TxDOT takes legal possession of property. Litigation continues. 10
7 What can go wrong? This is too brief a presentation to encompass that question. Some brief items: 1. Unable to locate landowners to effectuate service requires the court to appoint an attorney and for notice to be published in local paper for 4 weeks 2. Determination that more land is needed Begin again. 3. Determination that less land is needed Potential attorney fees 4. Landowner will not vacate after TxDOT possession Potential Eviction proceeding 5. Missing any of the Statutory timelines (Eminent Domain or Uniform Act) 11
8 What can go wrong? 6. Challenge to TxDOT s Right to Condemn 12
9 Conclusion Acquiring ROW for TxDOT projects is neither simple nor expeditious Part of the counter-balance to the use of the power of Eminent Domain There are parts of this process that TxDOT can control Early coordination to complete LPA agreements (a requirement under the 43 TAC 15.55), surveying, mapping, title and appraisal prior to Environmental Clearance Being prepared to complete each statutory timeline as efficiently as possible There are many parts that TxDOT CANNOT control Locating all necessary parties Timely appointment of Special Commissioners Timely Scheduling of Special Commissioners Hearing 13
10 LEGAL PITFALLS OF RIGHT OF WAY: HOW TO KEEP YOUR PROJECT FROM BEING DELAYED Melinda B. Skillern, ROW Attorney 10/12/2016
11 TYPES OF OWNERSHIP IN REAL PROPERTY An ESTATE defines the type of ownership of real property rights The property rights will be presented in order of ownership rights, strongest to least Several types of ownership or an agreement for use, TXDOT policy prefers to acquire in fee or easement 15
12 TYPES OF OWNERSHIP IN REAL PROPERTY (CONT.) Different Levels : Each level means something else regarding the ownership and the rights granted within the ownership and your ability to utilize the property. Three main estates and three agreements TXDOT utilizes: 1) Fee Simple 2) Easement 3) Lease (kind of, rarely) 4) License 5) Possession and Use Agreement 6) Right of Entry 16
13 FEE ESTATE Strongest type of property interest. TXDOT owns the property from the center of the earth to the heavens above in absolute. TXDOT preference in the majority of its acquisitions Our land- TXDOT controls the way the land is used for the project. 17
14 EASEMENT Easement: Permanent right to use someone else s underlying fee estate for your benefit. Partial ownership in the property, not the same as a Fee estate. TXDOT can use the easement how we need to- ex: Highway Drainage Easement Easement is the dominant estate because the underlying land must accommodate the easement; runs with the land (subsequent fee owner takes subject to the easementservient estate) Next preferable alternative to a Fee Estate; may work better than owning in fee for some projects. 18
15 LEASE NOT the fee or an easement, but it is a real property interest governed by Title 8 of the Texas Property Code affords protection to TXDOT as a tenant due to tenant s rights Property is subject to a lease thereby granting TXDOT possession of and a specific use of the property. Can be utilized while trying to acquire a parcel in fee More difficult to retract or breach- additional legal damages 19
16 TEMPORARY CONSTRUCTION EASEMENT Temporary right to use someone else s underlying fee estate for TXDOT s benefit. Partial TEMPORARY ownership in the property, Not the same as a Permanent Easement as seen above Ends at a specific date, must be specified in the instrument or when construction is completed (vague- should specify a milestone so it is clear when the TCE terminates) Same attributes as an Easement except the time limit: Next preferable alternative to an Easement Benefits TXDOT 20
17 CONSTRUCTION LICENSE Permits TXDOT to enter the property of others and perform specified activities for a specified amount of time. Compensation is paid NO property ownership right- A license gives the permission of the owner to an individual or an entity to use real property for a specific purpose for a specific period of time. It is personal to the licensee and any attempt to transfer the license terminates it. (transfer to contractor or consultant?) Terminates at a specific date or at the end of construction Because no enforceable property rights are transferred, they are not subject to appraisal or SB18 or the Uniform Act 21
18 POSSESSION AND USE AGREEMENT INCENTIVE PROGRAM: This INSTRUMENT gets us a contractual right to use another s real property- Merely an agreement to use the property for a specified period of time Requires the SAME amount of work as to acquire in FEE or in EASEMENT because there must be clear title. Cannot use if there are title issues to be cleared. No real property interest is conveyed need title work, appraisals, maps, surveys - Same work to acquire in fee. Typically works if we have a landowner whose property would benefit directly from the project. Owner can receive compensation up to 100% of the appraised value ; flat incentive of up to $3,000. Minimum incentive $3000. Maximum incentive $25,
19 RIGHT OF ENTRY Document utilized during construction Allows TXDOT enter onto a landowner s property on a temporary basis to perform environmental testing, or surveying. Not a legally binding agreement. They are no longer encouraged. Should only be used for scoping purposes, not highway improvements. including temporary detours. 23
20 TITLE ISSUES Divorce- getting two feuding people back together Entity ownership: corporation, LLC, partnership, etc. Heirship Issues: cleaning up an estate Property in foreclosure Bankruptcy- Automatic Stay 24
21 MINERAL RIGHTS TXDOT does not acquire the mineral estate- acquires a surface right to use the property for highway projects Avoid active wells- we may be (and have been) acquired- very expensive to acquire Difficult to build new wells and any other fixtures to extract oil and gas Mineral owner has the right to come onto the surface estate to access minerals 25
22 CEMETERIES AVOID-Very time consuming and difficult to acquire From the pyramids in Egypt to the churchyards in Europe, civilizations have given cemeteries special protections. US perceptions are that the grave is : the domus ultima,and the domus aeterna CANNOT Be Condemned!!!!!!!!!!!!! (e) Texas Transportation Code: prohibits the condemnation of a cemetery Cemeteries must be dedicated and platted: Health and Safety Code long process for approval The uniqueness of these properties will force you to start planning way out into the future. Many people cannot understand moving the dead to benefit the living- Societal reluctance- icky Solution in the Health and Safety Code: remove the dedication, show that the cemetery has been abandoned- easier said than done- 26
23 FEDERAL PROPERTIES Federal Lands Transfer and Facilitation Act: 43 USC 1701 (excludes post offices and the IRS) Permits the Federal Government (through the BLM) to sell unused Federal Lands for State Use Involves a lot of coordination with many government agencies- this takes TIME Federal Land often is usually subject to a ground lease- TXDOT acquisition also involves coordination with the landlord Must wait until a comparable lease-able property is available 27
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