Retail And Commercial-Use Properties
Retail and commercial-use properties require the access and exposure to traffic afforded by highways, major thoroughfares, and heavily-traveled roadways. These same locational characteristics that make commercial property more valuable also make them more susceptible to takings for roadway widening and expansion.
Roadway improvements are core public infrastructure and likely meet the threshold of public use required before the state or another governmental entity can exercise the power of eminent domain to take the property necessary for its project. But the exercise of that power comes with the responsibility to pay just compensation, not only for the property acquired but for the diminution in value that results to the remaining property.
In takings involving retail or commercial-use properties, we find that the condemner often fails to appreciate the impacts even a relatively minor taking can have on parking, internal circulation, proximity to the roadway, and compliance with setback, green space, and other requirements that contribute to the overall market value of an asset. Even if a site can continue to function, the property owner is entitled to be compensated for the diminished function of the site.
Charles McFarland is board-certified in civil trial law by the Texas Board of Legal Specialization. He is one of just two lawyers in the state that earned this distinction by trying condemnation cases. He has won more jury verdicts for landowners than any other attorney in the state, including one of the largest jury verdicts ever achieved in a Texas condemnation case.
We believe a good settlement is better than a great verdict. But it is a fact that great verdicts result in better settlements for our landowner clients. While we cherish our opportunities to get into the courtroom and fight for our clients, this isn’t always the best strategy; our laser focus always is on maximizing your net recovery.
Frequently Asked Questions On Commercial Property
Condemnation, also known as eminent domain, can significantly impact property owners, especially those with retail or commercial properties. Understanding your rights and how to navigate these proceedings is crucial for protecting your investments and ensuring fair treatment.
What factors are considered when determining just compensation for commercial properties in eminent domain cases?
Typically, an array of different factors is taken into account for eminent domain takings. These include:
- Fair market value: The property’s value on the open market
- Highest and best use: The most profitable potential use of the property
- Loss of business goodwill: Compensation for lost business reputation and customers
- Damage to remaining property: Decrease in value if only part of the property is taken
- Cost of relocation: Expenses associated with moving the business
- Improvements and fixtures: Value of any enhancements made to the property
The government must consider these and other factors to determine fair and reasonable compensation for affected property owners.
How does eminent domain affect leased commercial properties?
When a leased property is taken by eminent domain, the tenant’s leasehold interest is typically extinguished. In other words, the tenant may lose their right to occupy the property and may be entitled to compensation for their leasehold interest.
However, specifics can vary based on the lease agreement and state laws. Potential impacts include:
- Lease termination: The lease may be terminated, and the tenant may need to vacate.
- Leasehold interest: The tenant may be compensated for their leasehold interest value, including the remaining term and any improvements made.
- Business losses: Tenants may also be entitled to compensation for business damages, such as lost profits and relocation costs.
Further, the lease agreement may contain specific provisions (condemnation clauses) that outline the rights and responsibilities of the landlord and tenant amid eminent domain procedures.
What is condemnation, and how can it affect my retail or commercial property?
Condemnation is the legal process by which the government exercises its power of eminent domain to take private property for public use. This can affect retail or commercial properties in several ways:
- Loss of property: The property owner may lose all or a portion of their property.
- Business hardships: Affected businesses may face disruptions, relocation and potential loss of customers.
- Compensation: Owners and tenants are entitled to just compensation for the value of the property taken and associated losses.
- Legal proceedings: Condemnation involves various legal proceedings, which can be time-consuming and costly without skilled guidance.
The right attorney can mitigate the potential harm eminent domain takings can pose while prioritizing fair compensation in exchange for your property.
What are my rights as a property owner if my property is threatened with condemnation?
As a property owner in Texas, you have several rights if your property is threatened with condemnation:
- Right to notice: You must be given proper notice of the condemnation action.
- Right to appraisal: You are entitled to a fair assessment of your property’s value.
- Right to challenge: You can challenge the condemnation action if you believe it is not for public use or the compensation offered is not just.
- Right to compensation: You are entitled to just compensation for your property.
Our board-certified civil trial law attorney can help you understand your legal condemnation options.
How is compensation determined in a condemnation case for retail or commercial properties?
Compensation in a condemnation case is determined based on the property’s fair market value at the time of the taking. For retail or commercial properties, this includes considering the property’s current use, potential future use, and any loss of business goodwill.
Factors such as location, income generated, and any costs associated with relocating the business are also taken into account.
How can a lawyer help me fight against or negotiate in a condemnation proceeding?
A lawyer experienced in condemnation and eminent domain law can provide invaluable assistance by:
- Evaluating the case
- Negotiating compensation
- Challenging the action
- Protecting your rights
By engaging a knowledgeable lawyer, property owners can better navigate the complexities of condemnation proceedings, helping to ensure they receive fair treatment and just compensation.
We love to talk to property owners. If your property is threatened for condemnation, we can help. Let’s talk.
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