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Section 8: Eminent Domain in LPA Acquisition

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LPA Use of State’s Appraisals and Appraisers in Condemnation

Condemnation proceedings are the counties’ and cities’ responsibility without state participation except as specified by law and agreed upon in the contractual agreement. The use of TxDOT department-certified appraisers is provided for in the contractual agreement; however, the contract sets out that the state’s prior approval of the LPA’s use of the appraiser and his/her report is necessary. This is so that TxDOT can maintain sufficient control to ensure that the state’s appraisers requested by the LPA are qualified and that their testimony will be in the state’s best interest. In executing the 90-10 contract, the LPA agrees to pay the appraiser under the terms of his/her appraisal contract with the state. Since condemnation and negotiations are the responsibilities of the counties and cities, the state employs fee appraisers only to establish approved values upon which to base state cost participation as provided by the law; however, it is in the best interests of all concerned for the state to make its appraisers and appraisal reports available to the LPA for use in eminent domain proceedings. An appraiser will be considered the state’s appraiser only if he/she is a ROW Division staff appraiser or a TxDOT department-certified fee appraiser under contract to the state. This requires that R/W-PD make all assignments for initial appraisals, revised appraisals, or updating letters. This also requires all appraisals be submitted by the appraiser to the state only, never the LPA. Before a value is released to the LPA, R/W-PD must review the report(s).

When the LPA is contacted concerning its request for use of a TxDOT department-certified appraiser, it should be advised that if it makes appraisal assignments or accept reports direct from such an appraiser who is under contract to the state, then the LPA’s payments to the appraiser would not be eligible for state participation.

When an appraisal assignment is made, the state’s appraiser should be reminded that his/her contract is with the state and that he/she should not contact the LPA regarding his/her value without first being released to do so by the state. The appraiser should also be advised that payment of his/her fee would be made by the LPA unless a new value based on a new report is established before the Special Commissioners’ hearing or in the event the appraiser is not released by the state.

Before releasing any appraisal report, the state should determine whether the appraiser’s opinion of compensation is well supported and documented, that such opinion will support the filing of condemnation proceedings, or that possibly there is a need to establish a new value for reopening of negotiation. Appraisal reports released to the LPA are to be treated as confidential information for use only in eminent domain proceedings. Reports are to be returned to the state at the earliest practicable date.

Once the LPA has selected the appraiser, R/W-PD will instruct the appraiser to update the appraisal or prepare an initial report, whichever is indicated. If it is the appraiser’s initial assignment on the parcel, he/she will prepare a report as is customary for negotiation purposes and will defer other work as necessary for testimony until it is determined that condemnation preparation is required, and he/she is released for use as a witness.

Before the Commissioners’ Hearing, the updating of a previously approved report should be accomplished by letter, supplemented by Page One of form ROW-A-5, by one of TxDOT’s department-certified appraisers, whose opinion of value does not exceed TxDOT’s approved value. In that letter, the appraiser should stipulate that his/her previous value is still appropriate and that he/she will testify to that value. A copy of the updating letter and the appraiser’s report with the Page One supplement should be furnished by R/W-PD directly to the LPA. A copy of the updated letter is to be sent to ROW Division HQ for permanent filing.

If objections are filed after the Commissioners’ Hearing, and the case goes to jury trial, the original appraiser will re-inspect the property on the “date of taking” or a date shortly thereafter, and submit an appraisal report with a valuation as of that “date of taking.”

In those cases where the LPA recommends values and no TxDOT appraisers were used in the original determination of values, the LPA may request the use of a TxDOT department-certified appraiser as a witness in the eminent domain proceedings, either before or after the Commissioners’ Hearing. In such a case, TxDOT will contract and assign an appraiser in the usual manner. If, in preparing for condemnation either before or after the Commissioners’ Hearing, the LPA finds a material increase in value, all data will be submitted to R/W-PD with the LPA’s recommendation. If necessary, R/W-PD may employ TxDOT department-certified appraisers at TxDOT’s expense to prepare appraisals of the properties involved. All data will then be submitted to ROW Division HQ in the usual manner.

Before the Special Commissioners’ Hearing, any initial or revised appraisal reports received by R/W-PD shall be reviewed by R/W-PD staff and then forwarded to ROW Division HQ with such comments and recommendations that R/W-PD believes appropriate for further handling of the parcel. This also applies to the initial report prepared by a new appraiser on the parcel. If the revised or initial reports and the recommendation of R/W-PD properly support a material increase in value, the usual process will be followed to establish a new TxDOT approved value, R/W-PD will inform and authorize the LPA to re-negotiate at the new value and TxDOT will pay the appraiser’s fee based on the appraiser’s contract with TxDOT. If the revised or initial reports do not warrant an increase in the approved value, R/W-PD when submitting the reports for review by ROW Division HQ will recommend approval or disapproval of the appraisal reports and the appraisers in the Special Commissioners’ Hearing. If approved for testimony, the reports will be released to the LPA, the appraiser notified, and the LPA will pay the fee that will be eligible for reimbursement. If disqualified, the appraisal reports will not be released and the LPA and the appraiser will be notified accordingly and his/her fee will be paid by TxDOT. The appraiser should be reminded that should the appraisal be released to the LPA or should testimony be given without TxDOT approval, TxDOT will consider this a breach of the appraiser’s contract with TxDOT.

If the appraisal reports obtained at the request of the LPA after the Special Commissioners’ Hearing support an increase in value, the reports along with comments from R/W-PD documenting their analyses and recommendations for settlement should be forwarded to ROW Division HQ for review. If approved, the LPA will be authorized to settle at the revised figure on the basis that the owner will not be allowed to retain any improvements. If the appraiser’s estimate of value is excessive or is not well supported, his/her report should be released to the LPA with the department’s comments regarding the report and a recommendation that the appraisal not be used.

However, even though the appraiser’s value may be considered excessive, some discretion should be left with the LPA as to a proper defense against exorbitant claims in the trial. Where state appraisals are obtained at the request of the LPA after the Special Commissioners’ Hearing, there are no direct state payments to appraisers for services rendered and all payments are to be made by the LPA with state reimbursement where eligible.

The following shall constitute the basis for fees due the appraiser:

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  • If an appraiser selected by the LPA is one of the appraisers used by the state in determining its initial approved value for the parcel, any work done in confirming the values in the initial report or in preparing a revised report will be considered as preparation for testimony and the appraiser shall be entitled to the hourly rate as fixed by his/her contract with TxDOT for preparation for testimony, and payment will be made on this basis even though the parcel is negotiated and court action avoided.
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  • If a new appraiser is selected, he/she will be entitled to the fee established in the contract for an initial report. The appraiser will not be entitled to payment on an hourly basis for preparation for testimony until his/her initial report has been reviewed and he/she has been released to prepare for testimony.
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LPA Use of Expert Witness/Technical Expert

In addition to the provision for the LPA’s use of the state’s appraiser in condemnation, the state will also participate in the cost of contracting with expert witnesses or technical experts. When the LPA wants the state to share in the cost of employing an expert witness or technical expert for use in condemnation proceedings, it will contact R/W-PD for guidance and instructions. R/W-PD will place such witness or expert under contract with TxDOT.

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