Acquiring property for construction through eminent domain

| Oct 12, 2020

Texas law allows railroad and energy companies to exercise eminent domain. This may allow them to acquire private property from owners through a forced sale. By offering fair market value, a company may purchase private property for a construction project that provides a public service.

The process, however, may face challenges when an owner refuses to sell. Private property owners may file a legal action to prevent a company from purchasing their land. As reported by Global Construction Review, a lengthy court battle may then hinder the project’s start for several years.

Proving the need for public use

When property owners contest the purchase, companies may provide a court with documentation showing the land’s planned use provides a needed public service. Authorized projects that may justify an eminent domain purchase in The Lone Star State include the construction of gas and electrical lines, railroads and sewers.

Construction plans, land surveys and projected revenue statements may serve as evidence of how the project benefits the public. As noted by Reuters, courts may also consider whether a company already has an existing contract. A company may have established ties to its local community that serve as a compelling justification to provide a necessary service.

Determining fair market value

Texas and the U.S. Constitution require paying private property owners “just compensation” when companies rely on eminent domain to obtain land use. To determine a fair market price generally requires a negotiation between seller and buyer. Reaching an agreement may hinge on an understanding of the property owner’s needs and his or her reluctance to sell the land.