Real Estate Law

"My real estate experience, coupled with my experience as a litigator, has proven to be invaluable for handling real estate litigation."

The practice includes both commercial and residential real estate. Clients include individuals, businesses, builders, contractors, developers, property owner associations, and government entities. Projects range from individual residential transactions and commercial leases to assisting developers subdivide large tracts of land. In addition, his litigation experience includes boundary line disputes, suits to quiet title, adverse possession, prescriptive right claims, deed restriction controversies and eminent domain.

Texas Private Real Property Rights Preservation Act?

By: Michael C. Beller

Twenty years ago you and your wife bought a ten-acre tract of land with the thought of someday building your retirement home. You finished paying for the land about five years ago; since then you and your wife have been looking at house plans and visiting the site looking forward to the day when you will retire and build your dream home. You are aware that in the past, a majority of the property has flooded, but you plan on raising the elevation of the area where you are going to build. The time has come. You are going to retire in the year 2005. You decide to be your own general contractor, so you go to the county to get your building permit. While filling out the paperwork, the clerk all of a sudden gets a funny look on her face. She then tells you that you cannot build on the property. The entire tract of land is located within the flood way, not just within the flood plain, but within the flood way. As it turns out, about six months after you bought the property twenty years ago, the County passed flood plain regulations which completely forbid any kind of construction, even a fence, within the flood way. You grew up believing that the government could not take your property without compensation. You head straight to your attorney's office.

The Fifth Amendment to the U.S. Constitution and Article I Section 17 and 19 of the Texas Constitution both provide that private property shall not be taken without just compensation. The problem is that the Constitution does not define what constitutes a taking. A physical taking where the government actually trespasses or takes physical control of the property is clearly a taking which must be compensated. The issue that is not so clear is when the government regulates real property and in the process restricts its use and therefore diminishes the value of the property. The ownership of real property is thought of as a bundle of rights, which can be taken or conveyed individually. Anytime property rights are taken or conveyed, the owner has a right to expect compensation. If the government takes away property rights through regulatory action, isn't that a taking? The Supreme Court has defined what constitutes a regulatory taking in Nolan v. California Coastal Commission, First English Evangelical Lutheran Church of Glendale v. Los Angeles County, Dolan v. City of Tigard and Lucas v. South Carolina Coastal Council. Assuming that the government action is reasonable, these cases essentially hold that in order to be compensated for a regulatory taking, there must be a complete loss of all economic use of the land.

Over the years, individual states, under pressure by private property advocates, have begun passing legislation regarding what constitutes a regulatory taking. In 1995, Texas passed the Texas Private Real Property Rights Preservation Act ("the Act"), which took effect for County governments in September of 1997. To be compensable, the government action must restrict a landowner's use of his property, in whole or in part, temporarily or permanently, and cause a reduction of at least 25% of the market value of the property. The Act also requires government to comply with procedural safeguards which if not followed can cause the action to be invalidated. The Act does help protect private property rights, however the list of government actions not covered is quite long. Some of the actions specifically not covered by the Act are the following:

Actions taken by municipalities inside their city limits.
Action taken to fulfill an obligation mandated by State or Federal law.
Action necessary to prevent a grave and immediate threat to life or property.
Action to restrict the use of real property in a way that constitutes a nuisance.
Floodplain regulations.
Public health regulations.

Note that the scenario at the beginning of this paper would still not be compensable under the Act. The above list of exceptions is not complete. If you are faced with a regulatory taking you should seek advice from an attorney well versed in the area of imminent domain. Critics of the Act claim it does not do enough to protect private property owners while others say it goes too far and costs too much to administer. Suffice it to say, the battle over private real property rights in the State of Texas is far from over.