Landowner Condemnation Rights Attorney Philip Hundl talks about the Kinder Morgan Permian Highway Project in this video, recorded during a Landowner Forum in Luling, Texas. Mr. Hundl’s goal is to provide affected landowners with information to help them better understand the Texas condemnation and eminent domain process. Call 800-266-4870 for an appointment with Philip Hundl.
Summary of the Kinder Morgan Permian Highway Landowners Forum Video
A Little Bit About My Background
I think I’ve met everybody. My name is Philip Hundl. I’m an attorney at a firm called Wadler, Perches, Hundl, and Kerlick.
Just a little bit about me, because it was asked. I did go to Texas A & M, I’m an Aggie, class of ’92. And the ring, sometimes you’ll see the ring that I have on. Someone will say that’s not an Aggie class ring, you must like A & M or have gone there but you didn’t graduate.
I do have a class ring but this is my letterman’s ring. I played football there one year. Most people look at me and say, “You don’t look like a football player.” You’re right, I don’t look like a football player. I was a walk on, I wasn’t a scholarship player. So I walked on and I played enough to letter, and that was a lot of fun. But now sometimes when the weather changes, I’m regretting my experience as a football player with my knees.
I practiced at a large firm in San Antonio and Houston called Fulbright and Jaworski. Maybe you’ve heard of it. It’s like many firms have been merged and bought since I worked there. Now it’s called Norton Rose Fulbright. I worked for Fulbright and Jaworski in their civil litigation and product liability litigation departments.
Then I had an opportunity to join some of my life-long childhood friends who had graduated from high school together in Wharton, Texas, and they joined me in Wharton at a small firm. It’s been a lot of fun, I’ve been there for 18 years now.
That’s where we practice law. We have multiple offices in Fort Bend County (Fulshear and Richmond) and Wharton County (Wharton and El Campo). Our practice covers cases from San Antonio to Galveston to Houston to Dallas.
How I Started Representing Landowners in Condemnation
Someone asked me this question so I’ll go into it. My practice has been a lot of litigation, probate litigation, commercial litigation, land litigation, a lot of partitions and things like that. And then some years ago, I began to do condemnation work. And it happened almost by happenstance.
I had a former client of mine on a completely non-condemnation matter, call me and say out of the blue, “Would you mind taking a look at this easement agreement? “You know there’s this pipeline coming through my property ” and I’m concerned that an easement agreement “has all the things that I want in it.” Okay. Sure send it over I’ll take a look at it, happy to no problem. And then when I got it from him, he emailed it to me and I looked at it and I said, well it’s already signed. And he said, “Yeah I know but the right of way agent said that we can always change it.”
And that’s just beyond frustrating. I was upset. I told him someone’s been really taking advantage of you and deceived you. And so that started my career in condemnation cases and handling condemnation cases for landowners. I don’t do any condemnor work (for the pipelines and other entities taking land), only for the landowner.
My Website Is an Information Resource for Landowners Facing Condemnation
This is an educational presentation, and you may have seen this video camera. Why are we doing that? Because there are parts of the presentation that I’ll put on the internet. I have a website and I try to educate folks on their rights as property owners in the condemnation process. My website is mentioned on the brochure. It’s, https://txcondemnationrights.com.
If you visit the website, it’ll have lots of different videos of various topics related to the condemnation process, and the different condemnation projects that are out there that are occurring right now in Texas. I’ve tried to create a very good resource for landowners. So that’s part of what the videotaping of this session is for. It’s videotaping me, it’s not videotaping you all. So you won’t be on the internet. So with that let’s get started.
There Are Increasing Numbers of Condemnation Projects in Texas
There are lots of condemnation projects throughout the state. You’ll hear the word infrastructure and the phrase, developing infrastructure. And infrastructure comes with cost. I’d say the negative side is related to how it affects landowners.
There are various areas on condemnation. Pipelines, that’s what we’re here for today. There are various types of pipelines projects. While most are natural gas or crude oil, there can be water lines involved in condemnation projects. Also, related to those black lines [referring to the map displayed in the video] can be other associated items that would also taken. They could be valve sites perhaps with power lines.
Highway projects are another reason for condemnation. We talked a little bit before the program about some other landowner condemnation work I do related to highways and the expansion of highways.
Power lines and different sizes of power lines are another example of condemnation projects. And then there are other projects I just call miscellaneous. These are condemnation projects that you don’t see or hear about often. It could be canals, it could be water lines, or sewer lines.
The canals are sometimes associated with LCRA, most of you all know that’s the Lower Colorado River Authority. They will often times take canals. A farmer will create an irrigation canal and the LCRA will decide the canal is necessary for their system. They’ll condemn the canal and take ownership. That’s very common as well.
There’s been a huge increase in pipeline projects. We’ve all heard about the production in the Permian Basin in West Texas. All of that capacity needs to be taken out and sent to somewhere. Where’s it transported? It gets sent to the Texas Gulf Coast.
These are just some names [referring to slides in the video] of various companies that have projects or multiple projects, recently or in the near future. This is a map of a variety of lines. This one is also. This is the Kinder Morgan Permian Highway Project. This line right here this is the, I’ll refer to as a PHP.
The Kinder Morgan Permian Highway Pipeline Project
The Kinder Morgan Permian Highway Pipeline is shown on the map in green. And that’s a rough estimate of where it’s going to go. These are the counties it affects, and it affects a lot of counties, it’s 423 miles long. I know most people here are from Caldwell County. We’ve got one person here from Gillespie County, Hays County, I’m sorry.
This is just the filing for the Texas Railroad Commission, and it’s just kind of a brief timeline. In September they filed their application. As part of the application, the T-4 application, they classify themselves as a gas utility. That classification allows them to be a common carrier. As a common carrier that allows them to take your land.
It’s useful to review this timeline because you can see how fast things happen, it’s very swift. Many things in government doesn’t happen very quickly. It seems that these permits, these T-4 permits with the Railroad Commission get approved fairly quickly.
On September 10, 2018, they filed their application, and by October 22 it was approved by the Railroad Commission. Then in November they supplemented their information, and they said the whole line will be 42 inch diameter pipe. That was quickly approved by the Railroad Commission.
The T-4 mentions, who’s the operator and who’s the owner of the line. Very frequently they are different entities. Phillips 66 might be the large company behind the project, but the owner of the pipeline is some other subsidiary or some other entity that’s created just to own the pipeline.
For the PHP, Permian Highway Pipeline LLC is the owner of the pipeline. But the pipeline operator is Kinder Morgan. This is just what I mentioned. You’ll hear this sometimes, check the box. I tried to highlight this, it didn’t work. But this where on the T-4 number 2d, where they say it’s a gas utility. This the route. Very hard to see. This is what they filed with the T-4 application. This is the route in green. Obviously a little more detail than the route that they had in their marketing publication on their website. But still, not exact.
Interestingly, when a pipeline company files with the Railroad Commission, you would think they would have to specifically say, this is exactly where it’s going. What actually happens is that it’s more of an estimated route of the line.
And all you have either been contacted or will be contacted because maybe it’s going to affect you now. So there’s always some leeway in the route of the pipeline.
Facts about the project. If you received a packet from Kinder Morgan, this is what was included in the packet.. They’re saying this is a $2 billion project. This is part of their marketing Information.
There’s been some public opposition to this project. More so than usual. What I’ve heard most about is the opposition in the Hill Country — Gillespie County and Hays County. Kinder Morgan PHP has put out more marketing information in response to the opposition. You can see this on the website https://phpproject.com. So if you want to see what Kinder Morgan is telling to everyone, go there.
Audience Question – Why Does Kinder Morgan Have to Market the PHP?
– [Audience Member] Why do they even have to market the Kinder Morgan Permian Highway Pipeline? [Philip Hundl] Because of the opposition about the pipeline. And here’s kind of a fun fact. They like to point out in Gillespie County the estimated effect on the tax revenue is going to be $650,000 annually. So that’s what they’re saying. They list off these great things about the pipeline.
The Pipeline Condemnation Process for Texas Landowners
Most of you are here because one day, out of the blue, you are contacted by a right of way agent. You were going about your normal day and you get a call or a knock on the door. Or you get a letter from somebody saying we need to get on your land to do some things because there’s going to be a pipeline going across your land. Thank you very much.
I think for most of you that’s happened to you, or you know people that that’s happened to. It’s not something they want. It’s not something they asked for.
I will tell you that last week I was meeting with right of way agents on a different project, a different line completely, and they didn’t understand why people weren’t so cooperative. In other words, they said they don’t understand why all these people haven’t signed yet. The right of way agents thought they were offering landowners a reasonable amount of money. What’s the problem?
I said the problem is, number one you need to remember that these landowners don’t want this on their land at all. Number one. And I think that step is skipped a lot of times, by pipeline companies and land and right of way agents.
When the gentleman asked about the opposition earlier and need to market, there’s lots of reasons for the opposition. As you can imagine. Number one is that this is not something landowners want on the property.
I’d guess this to be true for most landowners based on the history of a lot of cases that I’ve had. Unfortunately when there’s one pipeline on your property, the next thing you know there are multiple pipelines on your property. The pipeline companies like to run the pipelines parallel because a lot of the work is done already. Or this land is already damaged by the pipeline so therefore what’s one more pipeline? I hear those arguments over and over. We have counter arguments to those.
How Does Kinder Morgan Have the Right to Condemn Property?
Next we get to this, the right to condemn. I think we all understand that the state, the city or the US government has the right to condemn for public purposes. Public purpose as been stretched these days. Also quasi-governmental agencies have a right to condemn for that same reason, a good example is LCRA.
Private for profit companies have the right to condemn. That’s where a lot of times a lot of clients just don’t understand how a private company can have a right to condemn your land. The example here is Kinder Morgan. The reasoning for saying this project is for a public purpose is the transmission of gas to different markets. This distribution of gas to markets will help people, the public, so the reasoning goes.
Steps in the Condemnation Process for the Kinder Morgan Permian Highway Pipeline
Steps in condemnation. This is something we can spend some more time on because I think this is sometimes unclear to a lot of folks. On this slide [in the video] I break it down into steps.
First contact is somebody showing up and saying, please give me the right to go on your land to do things like survey. They’ll also ask to conduct civil engineering surveys or other types of archeological surveys. And a lot of times there was very little explanation or reasons, just that there’s going to be a potential pipeline. Then, the landowner would agree — they’ll agree verbally or they’ll agree in writing.
My recommendation is not to agree verbally and not to agree in writing to what they present to you. I have my own temporary access agreement, which limits when they can come on the property, how they come on the property and if they’re going to go on the property. It’s limited to certain days and certain parts of the property.
We require that right of way agents and survey crews give notice to the landowner prior to entering your property. They cannot just show up unannounced. Yes, you can prohibit access completely.
The next step by the pipeline company will be to get a temporary restraining order from the court or a court order allowing them to access your property for a survey. And if that’s the route the landowner wants to go that’s absolutely fine.
Normally I prefer to enter into this limited temporary access agreement on our terms, not on their terms. I’ve seen proposed access agreements by condemnors [pipeline companies] that actually allow them to begin construction and basically circumvent the condemnation process. I don’t want to say circumvent it completely, it’s just they can start construction and deal with compensation later. Be very careful with those proposals.
So this is the next step. The right of way agents attempt to informally buy the easement across your property. There are some shorter smaller projects where right of way agents will attempt to get 100% of the easements by private agreement to not go to condemnation.
So the right of way agents go out and they make offers and talk to you about easement terms and things like that. If they’re unsuccessful then yes, you will get the notice of condemnation. You’ll get the final offer, which will be prepared after an appraisal of your land. This is the compensation that you should receive according to the pipeline company, so this final offer with the appraisal is going to be favorable to the pipeline company.
And what do I mean by that? Let’s just say in simple terms, the easement is going to take one acre of your property. Their calculation and their appraisal will say that acre in your area is worth $5,000. Okay. But guess what. Because we’re not taking 100% of that land, we’re not taking 100% of one acre, we’re taking an easement. So there’s things you can still do on that strip. You can walk over it, you can, in their mind you can do lots of things on that easement.
But if you read the easement and the restrictions that are placed on you, you’re limited in what you can do. So their appraisal will say there will be some percentage of what they take of your land. They’ll calculate we’re taking 90% of that land, we’re not taking 100% because if we took 100% we would own it, in other words. So their calculation is $5000 times the 90%, if my math is right that’s $4500, yeah $4500.
So they’ll say that’s what you’re entitled to. That’s your compensation. That’s how much we’re taking from you. Okay, and what I see, over and over is they fail to calculate the damage to the remainder. They say there is no damage to the remainder of your property You have 100 acres and that easement goes across your land, how does it affect the other 99 acres? They say there is no effect, zero.
I differ in that opinion and most condemnation landowner lawyers do. I believe that there is a damage to the remainder. I believe that someone before the pipeline would pay you x amount of dollars for your 100 acres, and after the pipeline it’s going to have an effect on the value of the entire property. Someone comes along and wants to buy your land is going to pay slightly less, or a lot less, because of that pipeline. That’s part of what we call damage to the remainder. And we’ll get into that later.
So in the steps, we’ve got final offer, and this is where the pipeline company files condemnation. And that is a lawsuit. The first part of that lawsuit is a special proceeding. That’s where special commissioners are appointed. They’re not the county commissioners from the county. They’re landowners of the county and they’re called special commissioners. They’re appointed for the special commissioner hearing.
It’s just part of the procedure. Each side can strike [remove] one special commissioner that they choose themselves. I’ve actually struck a special commissioner. The landowner had a history with one of the special commissioners. They didn’t like each other. So we asked to strike that person. Most of the time you’ll not want to strike special commissioners, I’ll tell you why in a second.
So there’s a special commissioners’ hearing, their job is to come up with an award for compensation. Normally a special commissioners’ hearing will take anywhere from one hour to three hours. They’ll deliberate for 15 to 30 minutes, and come up with an award.
Either side, this is the important part, either side can object to the award within a certain amount of time. I always have to remind my landowner clients, we did really well, we got a very high award from the special commissioners. Guess what? Pipeline companies will object to your award. We know that.
If for whatever reason the special commissioners’ hearing award is extremely low, then we’re not happy with the award. Guess what? We can object to it as well. So sometimes, you maybe won an award that’s kind of Goldilocks award, it’s not too high it’s not too low. My experience is that any award that’s different than what the pipeline company proposed, they’re probably going to object to it anyway. That’s my experience.
Next, once the special commissioners’ award is issued and the award is deposited, construction can begin. The pipeline company can start their construction once it’s deposited. And then if either side objects to the award then the case then leaves the special proceeding part of condemnation and just goes to regular civil litigation.
The main issue at trial, and in civil litigation it ends in an agreement, a settlement or trial. At trial what that issue is how much should the landowner be compensated. Like in any other civil litigation there’s certain mechanisms after trial, it could be appealed. Either side can appeal on different points, it just depends on what happened in trial. So those are the steps in condemnation.
More About Negotiating with Right of Way Agents and Pipeline Companies
I threw this in there, so this part of it talks about right of way agents. This is an article that was recently in the Pipeline and Gas Journal. It talks about new day for pipeline tolls. It’s not tolls, what he really meant is pipeline compensation is what he was really trying to get at, compensation.
He starts out and says, “Hey, back in the good old days it was the across the fence approach.” The right of way agents would come out and say “we paid your neighbor this much, that’s what your land is worth too”. Most people would say I guess that’s the way it works and I guess that’s what I have to take.
And then the article says, “if things got sticky, or time consuming negotiating with the landowner in question the agent can always play the condemnation card and direct them to invoke an eminent domain seizure”. That was the strategy, and I hate to say that still is the strategy. They say, if we can’t get this thing worked out, look out because here comes condemnation. And unfortunately it’s a pretty successful strategy for them.
Why are we having this educational meeting today? Because of that. They do things like that, that I think are unfair to a landowner. Here he also goes into what he calls the problem nowadays? This author says that more enlightened landowners are objecting the old assumptions and are demanding more lucrative contracts. And he says that’s basically because of the internet information.
So landowners are more informed now, and that’s a problem for pipeline companies because they’re having to pay more. And this is about the right of way company for the Kinder Morgan Permian Highway project. The right of way company TRC, it’s a large company, they have 140 offices throughout the US. They handle a variety of services for large energy companies.
Please, please remember the right of way agents don’t represent you, the landowner. Just the other week I was talking to a landowner, a different project but he he said, “I hired you after I lost trust in the right of way agents.” And I said let’s back up, I said, “I’m very interested in what you just said.” “So let me get this straight, you trusted them at first”? And he said, “Absolutely, I didn’t see any reason why not to trust them.”
I have to remember that I guess that’s how most folks are, they are trusting and that’s an admirable quality. In my line of work I always know there’s different sides and there’s different positions. I just know that a right of way agent has a job to do. And their job is to get the easement as quick and as cheap as possible. That’s their job. So watch out for the high pressure sales, the scare tactics, misrepresentation and false promises. And I’ve seen each one of these. I wish I was making some of this stuff up but I have examples of all of them.
And then don’t rush to sign, we were talking earlier before we ate about different deadlines. That you’ll hear the word “deadline” or we have to get this done or we’re behind schedule. So they really want to put the pressure on you the landowner to take the amount they’re offering to sign. You’re not behind schedule, it’s not your project. So be careful, don’t get in a hurry.
The dos and don’ts of negotiating. Do reject the first offer in the proposed easement agreement. Right away don’t use their easement agreement. And don’t take their first offer. Unfortunately, you would think well surely no one takes the first offer. I already know people on this Kinder Morgan Permian Highway Project that have taken the first offer and signed the first document. Which boggles my mind because the actual survey wasn’t even completed. So how can you grant an easement? Well you can, but you shouldn’t grant an easement when you don’t even know exactly where it’s going to go. But that’s already happened so, beware.
Don’t provide information to the right of way agents. What information would we provide? You probably received a questionnaire or you received a request to allow them to access your property, part of that was a questionnaire. Do you have a well on the property? Do you have this on the property? Do you have other easements on the property? All these things, that information you are not required to provide to them. And my recommendation is to not provide it to them. There’s a time and a place to provide that information.
The monetary part — with great confidence I can tell you the first offer is not their best offer. Do work on the non monetary terms first and then the monetary part. Well what does that mean? Let’s kind of unpack that. The easement agreement that they normally propose is going to be very pipeline company friendly. If that’s, at the end of the day, the easement agreement they want and they get from a special commissioners’ hearing, they do not budge on at all. Then your monetary part should definitely go up.
In other words, most of easement agreements I see, sure it’s for 30 to 50 foot, or 75 foot easements, but their proposed easement agreement says that we can put as many pipelines as we want to in the easement and most of them start off that way, then your damage should be very high because it’s an unlimited amount of pipelines that may be in that 50 to 75 foot strip.
Most of the time the pipeline companies will agree, okay fine, if you want us to limit it to one pipeline we’ll limit it to one pipeline. But in most easement agreements they will have a permanent ingress and egress over not just the easement area but all your land adjacent to the easement area. More often they’ll say they have access to any other land you have that may be adjacent to the subject property. If you own 100 acres and the easement is going over a total of one acre, but you have adjacent land that’s contiguous another 50 acres or 25. That easement agreement is written such a way that says the pipeline company will have an ingress and egress right over all your land.
You may say that’s impossible because there’s no way that it says that. I can show you an easement agreement that says that. Doesn’t seem like it says that but it says that. So be careful because if that easement agreement gives them more of what they want and they demand, then for sure your compensation should go up. Right? If you get better terms, landowner friendly terms, then of course your compensations, arguably, could potentially go down.
Now I still say we always push for as high a compensation as possible. And don’t rush to sign, I mentioned that at some point. Be patient. These are key terms of an easement agreement. Go to Texas AgriLife there’s a document about how to negotiate an easement or key easement terms. That’s an excellent document. It’s put out by Tiffany Dowell Lashmet. She’s the Extension Specialist and she’s a lawyer so she did a great job of that.
This will look familiar because these are kind of the key terms that everyone knows about. Be specific on the easement, not a blanket easement. Back in the ’30s and ’40s and ’50s you’ll see blanket easements. Texaco has a right to put a 30 foot easement over your property. It wasn’t defined where exactly and that could go anywhere. So that’s definitely not something you want.
Non-exclusive, we don’t want this to be an exclusive easement but a non-exclusive. Which should allow for other things in that easement.
The easement width, always make sure that’s defined, that’s typically defined. Limit it to one pipeline. Limit the type of product that will run though the line. Limit the pipeline diameter. And depth is something we really push for and often times we have turf grass farms so they want to pipe lower or deeper. So it just depends on your situation but we really push. Pipeline companies tend to start out at 36 inches and we’ll push to have it deeper.
These are other key portions. Surface facilities for above ground appurtenances, this is critical, this is also where a few words can make a huge difference. We want to be very, very careful that the pipeline companies are not allowed to put a huge valve station or compression station on your property. And if you don’t limit the above ground facilities, they call it facilities in easement agreements sometimes, but above ground facilities or appurtenances this could be a problem.
Reserve the surface use. What I mean by that is specify, or a lot of times it’s included but not limited to, these are all the things that I want to be able to do in the easement area and you pipeline company are okay with it. We want that, because if not a pipeline company could say that interferes with my easement right, the pipeline and therefore you can’t do it. So we want to get the language in the easement agreement that’s going to allow us to do as many things as possible.
Access roads in the pipeline area, that’s something that you really need to watch out for. Sometimes that can be more burdensome on the land than potentially the pipeline. I had a case where the actual permanent access road the pipeline company was pushing for went right through what would probably be a Buc-ee’s in the next two or three years. My client definitely wanted to be able to develop that commercial area that was at the intersection of two major highways in the future. Unfortunately that’s exactly where the pipeline company wanted their permanent access road. So that was a problem. Luckily we were able to get that changed from permanent access to just a temporary and it was going to go away after construction.
The double ditching term, you all have probably heard of that but it’s just making sure that the top soil is segregated from the sub soil.
Add in damage provisions for extra damages. There could be extra damages to fences, gates, culverts lots of different things, barns, different improvements that could be in the easement area.
We have to watch for provisions for a temporary workspace. With the easement there’s normally a temporary workspace and that could be a very big problem — the pipeline company may want 30 feet to 40 feet to an additional 50 feet. And often they’ll call it additional temporary workspace and those areas are located where a pipeline company may bore under a road or a creek, something like that.
Require restoration, this is something we always push for if it’s through pasture level it, disc it, reseed it. And if it’s a road, restore it frankly to a better condition than what is was. And not just say restore it to the condition the same or better than it was but go so far as to say which also includes add 4 inches of gravel whatever.
Specific fencing and road repairs, we’ll talk about termination of the easement. This is something that I would say folks like to push for, I like to push for but realistically is not something the pipeline companies very often agree to. This easement agreement only lasts for 10 years, only lasts for 20 years. That’s not a term that you’ll probably be able to get.
Now can you get a provision that says if this pipeline isn’t used for a certain amount of time then this easement agreement does terminate. Sure, that’s a provision that we’re successful in getting.
I don’t see this provision very often I have seen from time to time, is an arbitration provision. And I’m just strongly against arbitration provisions. I already touched on this, I kind of jump ahead sometimes.
But all damage calculations, we talked about a value of the land at its highest and best use. That doesn’t always mean what it is right now being used for. You are all in counties that I want to say, often times there’s land that is very close to development, cities are growing. Your land, although it may be agricultural, in time you could suggest it may be residential or it may be commercial if it’s on a main road. You have to look at the highest and best use and what’s the value of the land. What’s the value of the taking, that’s what we talked about and how much is in the easement area, what percentage of value. That’s one component.
The next component is damage to the remainder so we talked about before is how does this easement affect the rest of my property? And that’s extremely important because it’s often given zero by the pipeline companies. And that is kind of the way you figure all the damages.
And I must add on too that there are other damages for cost to cure, loss of production, loss of crop production. Cost to cure, because if there’s a pipeline crossing your irrigation system, you’re going to be required to buy another irrigation system. Let’s say your agricultural land was irrigated completely before the pipeline so cost to cure is important.
I added these two asterisks for additional damages for access roads and temporary easements. You always have to be careful, I said this already and I apologize for repeating myself. Buried in that easement agreement and what they’re trying to take, once again could be not just a pipeline easement but a permanent access road easement. We have to be careful. And if the permanent access road is in the agreement you need to value that as well. Once again that’s an additional easement that’s sometimes hidden.
How Are Attorneys’ Fees Typically Handled in Condemnation Cases
Attorney’s fees and expert fees. We talked about the steps in condemnation and let’s say you get past the special commissioners’ hearing, you have to go to court. Unfortunately as of right now attorney’s fees in Texas are not recoverable. Even if you win at trial. Can you get your attorney’s fees? The answer’s no, it’s not allowed. There are other states that allow that but not in Texas. So that’s important. Although you may go all the way to trial and get the compensation you want, there’s a cost in that.
This is the part I like to talk about, how do attorney’s fees work? So this is between you and your landowner condemnation lawyer. If you’re facing condemnation I strongly recommend getting a landowner condemnation lawyer. It doesn’t have to be me but get one because it’s important. You need representation to somewhat level the playing field.
How do attorney’s that handle condemnation cases typically work? Some may handle condemnation cases on an hourly basis. Most do not. Most handle on a contingency fee basis. How does a contingency fee work? It works, and every situation is slightly different but typically it’s whatever your initial offer was, think of that as a base. The way I’d say it is that base or initial offer is 100% yours. Anything above that initial offer or base is what the contingency fee is counted on. That contingency fee could be any range from a third, but I’ve seem some at 45%. I’ve seen some at 30%. I’ve seen some at 25%. It varies but I typically see a 30 to 40% contingency fee.
How Are Expert Fees and Case Expenses Handled in Condemnation Cases
A question you need to ask is if we have to get an expert or pay case expenses, who pays for that. If you hire a lawyer on a condemnation case with a contingency fee, that lawyer should give you a fee agreement, or an engagement letter. They call it different things but it’s a contingency fee agreement. That fee agreement should talk about how you handle expert fees and case expenses.
Some want to take it out of all of your portion, the landowner’s portion, others will share the cost. How do I handle it? I share the cost with the landowner. That’s what I do.
This is more of, these are the questions you need to make sure to ask. What do you do? It’s great to hear about all this information, but really when the rubber meets the road what should you do?
How Landowners Can Better Prepare for the Condemnation Process
Document your land. Take photos of your land, and especially the part that’s affected. After they survey, you’ve got that center line, you’ve got their flags, different places. Take a picture of what’s being affected by the areas being used for temporary workspace. Things like how many trees, what kind of trees, how big are the trees all those things.
I’ve got a client who has about 40 large pecan trees that are going to be affected. He’s got cattle and a cattle pen that has to be moved I have another landowner who has a well that’s going to have to go away. He’ll have to drill another well.
The improvements, when we talk about improvements, yes we want to be able to show what that improvement costs. How much it did cost you? How much a new one will cost you. This are all things that help, have that for your attorney.
Don’t lose pipeline letters, and plats, and all these things they send you or give you. If you’re not a very organized person just get a box, get a folder and shove them all in there. Try to keep it all together in one place. And once you do have that lawyer you can share that information with the lawyer.
Keep notes on conversations with right of way agents. Right of way agents came by three times this week asking me to sign this easement waiver or whatnot. Jot down important issues, concerns and questions that you have. This happens to everybody. You’re in a conversation and you forget about what to ask. So jot down any questions you have for the lawyer so that way when you meet with the lawyer, talk to the lawyer on the phone, email the lawyer, you can cover everything that’s on your mind.
Also the things that concern you may not be obvious to the lawyer. Just like I had one client who said with this pipeline he would have have a problem getting cattle to the other side to water, there’s only one water source. So that’s a huge concern. Most easement agreements I’ve proposed deal with that — there’s a temporary pathway for cattle during construction.
As much as that may be a concern for one landowner for another landowner it may not be a problem because he has water sources on both sides of the pipeline easement. Or the landowner may be able to rotate his cattle to another tract. All that’s important.
Let your lawyer know, these are the things that concern me. Talk to your landowner condemnation attorney. Like financial advisors, interview several, talk to several, and then hire one that you’re comfortable with.
Eminent Domain Reforms by the 2019 Texas Legislature
What’s coming up? the Texas legislature is in session. What about condemnation and eminent domain? Yes, are eminent domain reforms out there. So Senate Bill 421 and House Bill 991. I’ve looked at these briefly, I won’t go into too much detail because who knows if it will pass or not.
The Senate Bill is being authored by Kolkhorst and Perry. The House Bill has multiple coauthors. The key parts of the take aways from these bills. They require these basic favorable landowner easement terms. So they’re saying the pipeline company has to have these terms in their easement agreement. And it’s something we’ve already talked about — double ditching, size of the pipe, depth of the pipe. So all the basic things that we most landowners condemnation lawyers push for. This is what these bills are pushing for. It’s just to say at minimum pipeline companies need to have these things in easement agreements.
The public meeting, it’s requiring pipeline companies to conduct public meetings. Similar to TexDOT and other government governmental agencies when they have these projects. So I find that an interesting concept and as a practical matter I think there’s some procedural parts up here that I’m curious about how they will work if it passes.
Another interesting part of the bills, they both have the same thing, is the low initial offer penalty. That means that if you the landowner have to go to a special commissioners hearing, and the special commissioners award you a certain percentage higher than the offer the pipeline company made to you, then there’s a penalty against the pipeline company and you would be awarded additional compensation. You’re getting something called a landowner bonus. The hope is this will cause the pipeline companies to increase their initial offer. I think the real question is, will it make the pipeline companies increase their initial offer enough or not?
That’s all I have, I welcome questions. This is my email here, so if later on you’ve got some questions, go home and say, I really should have asked him this, email me, it’s not a problem. And this is my firm website, this is my website that I have dedicated just to condemnation projects and information. I think it’s becoming a good resource. Here’s what it, kind of the first page looks like. So this is it right here. This is a picture I was out looking at a board road and my web guy put that as the first picture on the website. So I’m squinting because I’m looking right into the sun.
Audience Question – What do you charge to review a contract or negotiate a contract?
– Like most condemnation lawyers, I work on a contingency basis on these. And so, that’s the way I would handle it okay. If you would like me to work with you, I’d be happy to do that, and like I said we’d do it on a contingency basis. Whatever that offer, and really it’s, I phrased it as the initial offer but really, whatever the offer you receive from the company is that would be our baseline. Anything higher than that I get for you I take a percentage of it. But also included in that, we focus on negotiating the easement terms first. And making those as good as we can for you. And then we switch our focus to the compensation part. What’s been tricky, it’s all projects. You all may have not received an offer yet because it’s so early on in the project. But I’ve already been hired by lots of landowners. So what we do in those situations is generally, whatever your initial offer is, when you get an initial offer, we establish that as a baseline. And then above that I get a percentage. My percentage on this project is a third.
Audience Question – Who are the commissioners who assess the land value? Where do they come from?
– [Philip Hundl] They come from a variety of places. They are not always the same people, so in one county the same special commissioner won’t do all the PHP cases. You will see that they’ll probably be most of the same people. How does the court get those names? What the court normally does is judges will appoint special commissioners. They’ll appoint realtors who are knowledgeable about land but they won’t appoint a realtor who primarily sells houses in town. The won’t appoint that kind of realtor. They’ll appoint a realtor who deals in farm and ranch land and rural land. That’s the land involved in most pipeline condemnation cases. Judges may also appoint farmers and ranchers — the owners of large amounts of land. It’s just people that the judge knows personally or has been appointed for other cases.
Audience Question – When will the Kinder Morgan Permian Highway Pipeline actually begin construction?
– [Philip Hundl] You hear and see different things. The word right now is fall of 2019. That’s when construction starts. Does that depend on the weather or the speed of getting condemnation cases filed, and the number of landowners who agree? There are many factors. Are these projects always on time? I think they run behind slightly. But that’s what they’re saying.
Audience Question – Is that in Caldwell County?
– [Philip Hundl] Yes, right now they’re still doing their surveys. They’re still doing archeological surveys. Most people don’t know this but, if there’s a water body on the property they’re going to go out and do an archeological survey. Which means they dig around in the water a little bit and see if they can find any arrowheads, artifacts, things like that. If they do then do more digging to determine do we go around it or do we leave it. So that’s up to them
So as of right now with all the different tracts I’m involved with, from Gillespie County all the way down to Lavaca County they’re still just doing surveys. Is the route completely finalized? I’d say no, not completely. But if it’s going to move, it’s only going to move slightly.
Audience Question – Where’s it going to?
– [Philip Hundl] A lot of times they say Katy because people don’t know where Sheridan is.
Thank you all very much for attending. Any other questions feel free to call me at 800-266-4870.