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Section 8: Owner Retention of Improvements (for State and LPA)

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The property owner may retain some or all of the real property improvements located on an improved parcel if the parcel is acquired through negotiation. When improvements are retained by the owner, just compensation for the real property interest acquired will not be less than the difference between (1) the amount determined as just compensation for the owner's entire interest and (2) the salvage value of the retained improvement. The amount deducted from just compensation for a parcel when any improvement is retained is referred to as "retention value." Retention value is usually the same as the salvage value.

An example Tabulation of Values shows improvements to consider in negotiations and retention values. When a right of way taking bisects an improvement, identify the improvement as either Category I or II on form ROW-A-10 Tabulation of Values. Form ROW-A-10 Tabulation of Values and retention value determination are discussed in TxDOT's ROW Appraisal and Review Manual.

If improvements are retained, the property owner's deed to TxDOT must properly indicate all retention. Deed clauses required for retention of improvements are discussed in Approved Special Clauses for Use in Conveyance Instruments.

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