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Section 13: Policy on “Uneconomic Remainders” (Excess Takings) (for State)

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Policy

Ordinarily, TxDOT should not acquire property in excess of its project right of way requirements. An exception to this is the directive in Section 203.0521 of the Transportation Code that TxDOT make an offer to purchase "uneconomic remainders". However, the statute requires that the property owner must consent to such acquisitions.

A potential uneconomic remainder is a parcel of real property that remains after partial acquisition of the owner's property. For TxDOT to acquire the uneconomic remainder, TxDOT will typically determine that an uneconomic remainder (1) has little or no value or utility to the property owner, or (2) that the entire tract could be acquired for substantially the same compensation as the partial tract, including damages to the remainder property.

Make an assessment of the potential creation of an uneconomic remainder based on review of the right of way map, inspection of the property (if necessary), and review of the property appraisal.

Consider the following items in making the assessment:

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  • Generally, landlocked remainders will be considered to be uneconomic remainders if provision of access is not economically feasible.
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  • Partial acquisition from improved properties when the before use will be changed by the taking through substantial loss of parking, change in shape, or other causes should be carefully analyzed to determine the existence of an uneconomic remainder.
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  • If a partial taking eliminates the present utility of the remainder but creates a new potential use of value to the owner, normally the remainder is not considered to be classified as an uneconomic remainder.
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  • TxDOT is not required to make an offer on a remainder if an appraisal or environmental investigation indicates the presence of hazardous materials or substances. Transportation Code, Section 203.0521(e) provides that TxDOT may legally enter a remainder to conduct an appraisal, survey, or environmental investigation to determine whether TxDOT will offer to acquire the remainder. Per Transportation Code, Section 203.0521(f), if TxDOT determines that hazardous materials or substances are present, and TxDOT documents this determination in the project file, no further action to purchase the remainder is required.

If it is determined that there is no potential uneconomic remainder, document the basis for this determination in the project file.

After identification of a potential uneconomic remainder and determination that there is no indication of the presence of hazardous materials or substances, a recommendation to offer to purchase the potential remainder, along with the parcel information should be submitted to ROW Program Office for Division Director approval.

If the ROW Division Director determines that the tract is an uneconomic remainder, TxDOT transmits an offer letter to the property owner for purchase of either: (1) the part required for the transportation improvement, plus damages to the remainder or (2) for purchase of the whole parcel.

If the owner accepts the offer for the whole, arrange to obtain a separate legal description and parcel plat of what was the “remainder tract”, and identify this uneconomic remainder tract as ‘Tract UR” using the same number as that of the parcel tract. For example, if the original parcel was designated as “Parcel 4”, the separately described remainder tract would be “Tract 4UR”.

The portion purchased as an uneconomic remainder is not considered part of the right of way but is surplus property. Any revised ROW map should indicate that the original parcel is part of the right of way but the remainder is outside the right of way. Prepare and submit one executed deed containing two separate property descriptions according to normal acquisition procedures.

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Discretionary Remainder Acquisitions

If a proposed acquisition of a tract of land would leave the owner of the property a remainder of the tract, TxDOT may negotiate for and purchase all or part of the remainder if TxDOT and the owner agree on terms for the purchase. This discretionary authority applies whether or not the remainder property meets the criteria to qualify as an “uneconomic remainder”.

However, remainders not meeting the criteria of an “uneconomic remainder” should not be purchased routinely but only in exceptional circumstances, as approved by the ROW Division Director or authorized designee. Remainder properties suspected of having adverse environmental conditions, including the presence of hazardous materials or substances, should not be purchased.

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