Institutional And Special-Use Properties
Special-use properties such as churches, schools, and other institutional properties present unique compensation challenges. The fact that these properties do not trade in the market based on income produced does not mean they don’t have a market value or are not entitled to compensation. Recognizing the use and function of these properties before the taking can be the key to ensuring that the impacts to these properties are not underestimated.
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.
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, our laser focus is on maximizing our clients’ net recovery.
FAQS: Condemnation And Special-Use Or Institutional Properties
The following answers to some of the most commonly asked questions about condemnation proceedings involving these properties can offer additional clarity.
What qualifies as an institutional or special-use property in condemnation proceedings?
They can include churches, schools, hospitals, and other facilities that serve a specific community function. These properties are unique because they do not typically generate income and are infrequently bought or sold on the open market.
How is the market value of a special-use property, such as a church or school, determined in a condemnation case?
A cost-based approach is often necessary due to a lack of sales and income data associated with special-use properties. This method can involve calculating what it would cost to reproduce or replace the property minus any depreciation. Accounting for any novel characteristics or functions of the property may lead to a higher market value.
What unique challenges do institutional properties face in receiving fair compensation during condemnation?
Several challenges can impact compensation for institutional properties. These include trouble establishing market value (as mentioned), potential undervaluation of the property’s unique features, and the community impact of losing such properties.
How can I ensure the use and function of my property are accurately recognized before the taking?
Documenting the property’s use, including its potential role in the community and its unique features, is essential. Examples include:
- Architectural design (stained glass windows, columns, or pilasters)
- Community significance (historical importance, cultural implications)
- Specialized facilities (operating rooms, teaching facilities)
- Community spaces (auditoriums, gymnasiums)
An appraiser familiar with institutional properties can also help with preparing a comprehensive and accurate valuation.
What steps can a lawyer take to protect the rights and interests of institutional property owners in condemnation proceedings?
There are many ways an attorney can protect your interests and rights during condemnation proceedings for your property. These include:
- Challenging the government’s valuation
- Ensuring all legal procedures are followed
- Negotiating for higher compensation
- Documenting the property’s unique features
Working with an attorney also means having a ready advocate to represent you in court if necessary.
Can zoning changes affect the value of my institutional or special-use property in an eminent domain case?
Yes, in eminent domain cases, zoning changes can significantly affect the value of these properties. When a property is subject to a zoning change, its potential uses and market value can be impacted. Courts often consider the “highest and best use” of a property, which includes potential zoning changes, when determining its fair market value in eminent domain cases.
If a property is rezoned to allow for more valuable uses, its assessed value in an eminent domain proceeding could increase. Additionally, rezoning can influence future development plans and potential income generation, further affecting the property’s value.
Are there any exemptions or special protections for educational or health care facilities in eminent domain proceedings?
Yes, certain properties typically have protections and exemptions from eminent domain takings. They vary by state and local laws, but here are some examples:
- Public schools: Texas law often exempts public schools from eminent domain to ensure that educational services for students remain uninterrupted.
- Hospitals: Health care facilities, especially those serving public health needs, may have special protections to continue providing medical care.
- Religious institutions: Churches and other places of worship often have legal protections against eminent domain to preserve religious practices.
- Community colleges: These facilities may also be shielded from eminent domain to maintain public accessibility to higher education options.
The purpose of these protections is to prevent the essential public services these facilities provide from being disrupted by government acquisitions. Demonstrating the use of the property for public benefit may provide sufficient grounds to challenge the taking successfully.
How does historical designation affect the eminent domain process for institutional properties?
As mentioned, properties that are designated as historical landmarks or part of a historic district may have additional protections against eminent domain. Such protections help to preserve cultural heritage and maintain the historical character of communities.
However, the impact of historical designation can be complex and varies by jurisdiction. In some areas, it may provide a strong defense against eminent domain, while in others, it may not offer significant protection. Additionally, historical designation can influence the compensation offered, as the unique value and significance of the property must be considered.
Can the government condemn property owned by non-profit organizations or religious institutions?
How does the government handle contaminated institutional properties in eminent domain cases?
What strategies can institutions use to challenge a government's claim of public necessity?
- Showing that the taking benefits a private developer more than the public
- Arguing that the stated project is vague, unnecessary, or not feasible
- Demonstrating that the public purpose could be achieved without taking the specific property
In these cases, documentation, expert testimony, and legal precedent play a key role in opposing the condemnation.
We love to talk to property owners. If your property is threatened for condemnation, we can help. Let’s talk.
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