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TXDOT is Coming for a Road Near You, Now What? The Offer Phase

by | May 10, 2022 | Commercial Property |

This is the second in a series of posts outlining the condemnation process in Texas when TXDOT expands or improves a roadway. The first post explained TXDOT’s steps from project initiation to making an offer to a landowner to acquire the property needed for the project. This post examines the offer phase. Texas is one of twenty-four states that require the condemning authority make an offer before it can file a condemnation lawsuit, meaning a majority of states do not afford landowners the guaranteed right to an alternative to litigation. In fact, Texas requires two offers, an initial offer and a final offer, and adds another layer of protection in mandating the offer be ‘bona fide.’ An offer is ‘bona fide’ if:

  • The initial and the final offer are in writing;
  • The initial offer includes the name and telephone number of TXDOT’s representative;
  • The initial or the final offer include the landowner’s bill of rights;
  • The initial or final offer include the instrument of conveyance;
  • The initial or final offer include a copy of the written appraisal;
    • If the offer includes damages to the owner’s remaining property and the appraisal is not a part of with the initial offer, the initial offer must have a statement in bold print and larger font that such damages are included;
  • The final offer is equal to or greater than the amount of the written appraisal.

The initial offer must be open for acceptance for at least thirty days before the final offer can be made, and the final offer must be open for at least fourteen days before a condemnation lawsuit can be filed. In practice, the offer phase can last longer than this minimum forty-five day period because it presents the opportunity for the parties to come to an agreement without expending the costs, time, and other resources litigation demands. To this end, TXDOT welcomes counteroffers from landowners, referred to as Administrative Settlement Offers, that must be supported by market data.

Determining whether a counteroffer is a realistic option starts with a thorough analysis of the appraisal report the offer is based on. TXDOT uses many appraisers throughout Texas and appraising property is often described as an art, not a science. Therefore, offers come in all shapes and sizes, and include the good, the bad, and the ugly. Further, not all market data will be considered by TXDOT and not all negative impacts to a property are compensable under Texas law. These variables and complexities make it imperative a landowner consult an eminent domain lawyer to review an offer from TXDOT before taking any action in response. For this reason, the first step of McFarland’s proven process for representing Texas landowners is a deep dive analysis of the offer, and our lawyers welcome the opportunity to visit with anyone who has received an offer from TXDOT.

If an agreement is reached during the offer phase, TXDOT’s acquisition of the subject property is closed via deed through a title company. Otherwise, the next step is the filing of a condemnation lawsuit that triggers the administrative phase of the condemnation process, which will be the subject of the next post in this series.