Strategies for Eminent Domain?

[Schema Thing]

Anyone know how to get the most from a municipality in the event of Eminent Domain?

Here's the situation:

My wife's house sits on a busy, major street, across from the library, of a large Texas suburb. At an approx value of 100-110K, it's not the sort of house that the city would like to see "framing" the neighborhood (and indeed, as you drive into the ajoining neighborhood, the houses get a little nicer and more well maintained...but this one is on the main street, and a few of the other houses are investment/rent houses).

The city has been purchasing the houses next to her house, and then knocking them down. About 5 houses so far, and they've just purchased three more, making it a clean sweep for the block from my wifes house and west.

There is no clear statement of purpose from the city. There is rumor that they would like a developer to develope the land with nice townhomes, or perhaps small proffessional buildings... but it also stands to reason that they would like land as a greenbelt/park, as again, it is just off a main street that intesects a major highway a block away, and has government property just across the street.

I understand that as of a few months ago the law no longer allows them to simply take houses for commercial projects, but they could take it for city park type use.

I'd love any advice on getting the very most out of the City. They seem to have been paying a small premium above the "market" price for the homes they've bought (but I'm no expert, so I'm not sure if that premium is 5% or 20%). Of course, we want to get the absolute most from them we can, but if they imminent domain it later, they may be able to pay less than they would be willing to pay now?

One thing I've considered negotiating with the city is for them to go ahead and buy it, but allow us to live in it until they own a few more houses to the east of us, so that we are, in a sense, "the last house standing".

Any advice from legal eagles or anyone with experience/ideas would be appreciated.

Thanks!

[TwilightGardener]

1. Do you mean "eminent" domain?

[Schema Thing]

2. oops, yes

thanks

[bbgrunt]

3. My house is currently under eminent domain confiscation

also. I have no strategies to suggest except unless you are good at negotiations, you should to talk to a lawyer. I believe every state has different requirements regarding the process. Here I was allowed to get a second appraisal at the city's expense and have the right to challenge every step along the way. They must also pay for moving expenses and market value for an equivalent residence. I have not yet negotiated the final contract, that should come next month.

[Schema Thing]

7. So the price you are negotiating

is the price of an "equivalent" residence?

Are you doing your own negotiating?

What is the city going to use your land for?

[bbgrunt]

10. the price is the appraised value (which came in high)

plus a contingency fund for finding a current equivalent residence. I at first hired an eminent domain attorney which was very expensive; 480/hr plus a percentage of the gain he negotiated--and even though I only talked to him for twenty minutes on the phone, ended up paying 365. for that time plus time to set up appointments etc. Since I am not actually contesting the procedure, I decided to drop this attorney for a cheaper one from an adjacent city who handles such cases for that city. My house is being taken for the expansion of the local library.

[Throwing Stones]

4. You're right that you could probably squeeze more out the city now

Your best bet is to find an attorney who specializes in this area - not just any real estate attorney but an eminent domain attorney. It's a niche, so you might have to go to a larger firm (and pay more), but based on what you think the market for the house is, a $2-5k investment in a lawyer and an appraisal might get you and your wife an extra $15 - 30k, which would be a net gain. If you don't want to, or can't, pay those costs up front, you might be able to work out a creative payment plan (e.g., atty keeps a percentage of gross selling price above a certain baseline). good luck.

[Schema Thing]

8. Thanks!

[Raven]

5. I'm a Massachusetts Real Estate lawyer, not a Texas one but

here is what I'd advise.

Don't do any negotiating with the city without your own lawyer. If the city approaches you, try to get them to pay your legal fees.

Get an appraisal so that you know what you're looking for. Get that from a reputable RE Appraiser.

The way this works (at least in Mass.) is that the city takes the property by a Writ of Eminent Domain and then the fun begins...the "award" or the price the city is willing to pay. If the parties don't agree, there will be a battle of the appraisers in court. This is why I say you should get a lawyer on board because there are court deadlines and the like.

I'm not sure about your statement that the law doesn't allow the city to take for commercial projects. I thought there was a recent Supreme Court case that says they can but I've been retired for awhile so I might have missed something.

There doesn't seem to me to be a reason why you couldn't negotiate an arrangement with the city to stay in the house until the last dog dies. Maybe an option to purchase (or take, in this situation) that kicks in after certain other events have occurred.

Free legal advice is worth what you pay for it, especially from an out-of- state lawyer, so line up counsel and start looking for a good appraiser, preferrably one who has expert witness credentials and who has testified in court. In these things, the appraiser is really important.

GOOD LUCK!

[Schema Thing]

6. You're right about the Supreme Court

But the Texas legislation recently made some changes to protect homeowners. Stricter rules against declaring things "blight", and changes to governments' ability to take land to give to developers. I do need to review the law though, and get specifics.

At this point, the city is definitely giving (a little) more than market for the houses, so I probably don't need an appraiser for that, but I guess if they go to eminent domain I will for sure?

Thanks for the advice.

[musiclawyer]

9. I do this for a living sometimes

All I can say is see a pro who does nothing but ED or mostly ED. He or she can negotiate and build in his time. Public Agencies and thier engineers are really happy when the negotiating agent settles with a homeowner and they don't have to bring the case to someone like me to get the order of possession. Because then it can cost a lot more to the agency to litigate AND pay what they would have paid anyway. Likewise you have an incentive to settle early because even if you go to the mat, any extra money awared by a jury is money that may not necessarily go to you. It will be divided up between lawyers , expert witnesses and other costs. A good lawyer will get you a good appraiser, and everyone's numbers should be pretty close. In short don't get greedy. Sometimes trying to take the Public Agency hostage is justified when they are trying to screw you. But many times that is not the case. That's when being greedy backfires. I see it all the time.