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Section 16: Policy on “Uneconomic Remainders” (Excess Takings) (for State)

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There normally should be no taking of properties in excess of right of way requirements since TxDOT is not authorized under state law to acquire property in excess of the needed right of way, except in the case of "uneconomic remainders." Transportation Code, §203.0521 gives TxDOT the statutory authority to acquire uneconomic remainders. However, the statute requires that the property owner must consent to the acquisition.

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, the Department must initially 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:

  • 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.
  • Generally, landlocked remainders will be considered to be uneconomic remainders if provision of access is not economically feasible.
  • 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.
  • 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, §203.0521(d) 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, §203.0521(c), if the Department determines that hazardous materials or substances are present, and the Department 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, the Department must submit to the ROW Program Office in Austin the Department's recommendation to offer to purchase the potential remainder, along with the parcel information. After approval, the ROW Program Office in Austin submits the recommendation to the Executive Director for a determination of whether the tract constitutes an uneconomic remainder. The ROW Program Office notifies others in the Department of the Executive Director's determination.

If the Executive Director determines that the tract is an uneconomic remainder, the Department 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. "

Provide a revised right of way map to the ROW Program Office in Austin, showing the right of way parcel as originally shown, plus the additional remainder tract as a separate tract numbered as indicated above. The portion purchased as an uneconomic remainder is not considered part of the right of way but is surplus property. The revised map must 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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