This is Attorney Philip Hundl’s Seminar on Landowner Rights in Condemnation in Bellville, TX, on February 12, 2019 . To make an appointment with Mr. Hundl please call 800-929-1725. You can also click this link for a free case evaluation.
Summary of the Presentation on Landowner Rights in Pipeline Easements
– Let’s go ahead and get started. I appreciate everyone here that came. I know it’s a little early in the morning but I wanted to have this, and then you all can get about your day. Once again, my name is Philip Hundl, and I’d like to introduce my staff here. This is Esperanza Cuevas, she’s one of my paralegals. Angela Alanis, another one of my paralegals.
You may be looking at all of the setup here. What we do is video tape these sessions for the benefit of the people who can’t attend. The camera’s on me, not on any of you, so don’t worry about that. And I’ll put the video up on my website. I try to provide a lot of educational information to landowners about the condemnation process. So that’s what this is about, is trying to educate everyone.
Many of you I’ve already spoken to, and you’ll probably be hearing this for the second or third time. But for those of you that I haven’t met yet, this is all about providing information to landowners who are facing condemnation.
So with that, we’ll get started. There are several areas of condemnation. We’re going to talk specifically about the AMP line here in Austin County, Washington County and Waller County, but there are some other areas of condemnation. So when you hear people talk about condemnation or eminent domain, that may cover some other items.
The pipelines are a big issue right now. Normally we’re looking at a pipeline company wanting to take easements that are 50-foot wide. I’ve seen easements that are up to 75-foot wide, from time to time 30-foot wide. These easements have areas called temporary workspaces associated with them. Also, there’s condemnation that involves the actual taking of the land, and not just an easement and that’s what we refer to as fee simple. That may be for valve sites or power lines, and also highways.
The infrastructure in Texas is always expanding. I live in El Campo, Texas in Wharton County. They call it the I-69 Corridor now, but I call it Highway 59 still. It’s expanding, and the landowners that live along on the highway there, are not giving up an easement to the state. The state is taking strips of their land, so that’s a fee simple taking.
I mentioned power lines. This can be directly with the Center Point or Reliant, or LCRA. You’ll see LCRA take power lines, or take land for power lines, but then also a lot of times these pipeline projects will require power lines.
Then there are also miscellaneous areas of condemnation. This can be the canals for LCRA. I refer to LCRA because I’ve had several cases against LCRA in which they take canals.
An interesting aside, I asked an LCRA representative about how they construct canals. He said, “well we actually don’t build canals, we just take canals.” So, that answered my question.
Water lines and sewer lines can also be areas of condemnation. In any metropolitan area there’s big growth in water lines. Normally with the water line, the water company will argue that the damage to the remainder is a lot less, and we’ll talk about what that means.
Talking about the increase in pipeline projects, and this is just over the last three years. These are some familiar names that maybe you’ve heard of like Magellan, Targa, All Plains, Phillips 66, Kinder Morgan, Aspen Midstream, that’s the AMP, EOG, and Enterprise. And then there’s a new project, multi-county Whitewater Midstream. And this is just a handful of the names.
This is a map, and at this point, let’s hand out these handouts. And we have some pens that we can also hand out. I know back in school I liked to take a lot of notes. That didn’t mean I always looked back at my notes, but I took a lot of notes. We printed out about 20 of them If we don’t have enough maybe you can share if you came with someone.
So this is some of the slides that I’m going to go over, not all of ’em, but what triggered my memory on this was I remember excluding this slide. It’s a map of some of the recent projects that have either been constructed or are into construction or plan to be constructed.
The AMP line that we’re here for today is not on the slide. It’s a multi-county line but it’s not a 200 or 300 mile line. This slide only shows the larger pipeline projects, and most of this is all coming from the Permian Basin in West Texas. Tons of production out there. They’ve got to find a way to get it to the coast, and so that’s what these lines are doing.
Now specifically about AMP, the AMP Pipeline LLC, it’s a company owned by Aspen Midstream. I’ve just had a rundown of what Aspen Midstream says on their website about their assets and their system. They’re expanding on from the Austin Chalk. They’re talking about what they internally have and then their plans, and this is the bottom part, is creating this 72 mile system to get rid of this residual gas, and I’ll show you a map of that. Here, this is the map of what they call their Aspen Chalk assets.
– [Male Attendee] Do they have a more detailed map that actually shows all the Austin County properties affected? You can see your property–
– I’ll show you a map that’s the most detailed–
– [Male Attendee] Is it on the computer anywhere?
– I’ll answer that–
– Yeah, okay–
– So much of this information obviously is on the internet but then not all of it is on the internet. This is on Aspen Midstream’s website. This talks about their current assets that they have, and then also this residual pipeline, the green line, that’s the one that I think is affecting probably most everybody in this room. The other one that has yet to be is this plan, it’s a light blue, the Planned Rich Gathering Expansion, that’s what they’re calling it.
It’s an expansion. They’re gathering lines in Fayette and Washington and Burleson counties. Currently, based upon the information that’s out there and what I understand from my research, the dark blue is what they have existing right now, and the light blue is what they plan on doing and the green is what they’re working on right now. So the green is the easements they are getting right now.
They haven’t started construction on that, and you’ll hear a lot of things from the right-of-way agents about what they have or haven’t done, but that’s right there. So now to get to your question, is there a more detailed map of this residual line, of this transmission line? Surprisingly, this is as detailed as they’re required to give to the Railroad Commission. So this is not online, you really don’t find this–
– [Male Attendee] That’s no good–
– This is what they file with the Railroad Commission—
– For their T-4 permit. We get into a political debate or a legislative debate on what they should or shouldn’t do, or what the Railroad Commission should or shouldn’t require, but this is what they submit, and this is what was approved by the Railroad Commission. A little bit more about, the details of this project.
So Aspen Midstream created this company, AMP Intrastate Pipeline LLC. This is not uncommon, Phillips 66 creates this Gray Old Pipeline Inc., LLC for this particular pipeline project. That’s what almost all these companies do.
This particular project, I’ve seen it from plus or minus a few miles, 69.95 miles, it’s a 30-inch line, the T-4 Permit says that they’re classifying AMP as a gas utility, that’s where they get their common carrier status, okay?
Their first T-4 was rejected as incomplete with incomplete information provided. They corrected it and then it was approved October 8th, 2018.
I don’t know exactly when a lot of you were contacted by right-of-way agents but it was probably before that. They were sending out their right-of-way agents going to get easements before they even have this line approved.
Can they do that? Yes, technically they can do that. I think it’s a little deceiving to the public, because the public didn’t even know anything about this project yet, right? Until, something’s filed with the Railroad Commission.
Let’s now get into the right to condemn. The right to condemn belongs to state and county governments, the Federal Government as you know from a lot of talk about the federal border wall. So the State of Texas does have the right to condemn.
Quasi-governmental entities have the right to condemn as well — LCRA as I mentioned. Private, for-profit, this is the part that is oftentimes hard to understand, is how is it possible that a private, for-profit company has the right of eminent domain? Well the law and the courts have said, if it’s for a public purpose, a public good, then yes, they have the right to condemn.
And you can be upset about it as much as you want and complain about it, I’m just telling you the law. So, infrastructure projects would include infrastructure projects like pipelines. Recently, as for this determination of whether a pipeline project is for a public purpose or public good, the courts have said, if in the T-4, they classify themselves as a utility or common carrier. That covers it, that gets it there.
If a company misrepresents what it’s actually doing on a T-4 that’s a whole other issue. But the Supreme Court of Texas has given much flexibility to pipeline companies. This is just an example of a T-4, and you’re not going to find this online either.
You go on Railroad Commission and there is a way to find T-4s. They do have T-4 permits on the Railroad Commission but unfortunately they were for-profit four or five years ago, they’re not updated. We acquired this by submitting a public records request.
Steps in Condemnation
This is a real frequent question. You all may have this question right now. I’m going to go through the steps of the condemnation process, and where we are right now in the process with the AMP project.
So first contact is with you as a landowner. You get a contact out of the blue from somebody saying, hey can I go on your land to survey or walk on the property, because we’re going to put a pipeline on your property. That’s unfortunately your first experience. Is that pretty accurate?
– Yep. So right out of the blue you’re getting contacted and you don’t know what this is about. You don’t know if this is true or if this person just wants to get on your property to trespass. So that’s the first contact unfortunately.
And then the next contact is by the right-of-way agents attempting to, I’m going to say informally, and it is informally, buy an easement from you. You all have probably been approached by the right-of-way agents. Who are right-of-way-agents?
Landowner Rights in Dealing with Right of Way Agents
For every need in any industry there’s a business that’s created, and that’s these companies of right-of-way agents. The right-of-way agents are hired by pipeline companies, or even the State of Texas for highway projects.
When they’re expanding a highway, they hire these right-of-way agents to go out, and they’re like landmen with oil and gas leases. Some people call them lease hounds. Their job is to go out and be very persistent, and their objective is to get the easement from you for as cheap as possible.
In the next step, landowner gets notices regarding condemnation. Notices from buyer through the right-of-way agent on behalf of the pipeline company, with a initial offer, and then a landowner’s bill of rights. That in and of itself tends to shake people up and get nervous because they see a law suit and they see, these are the things that a pipeline company could do.
Then the next step is, and in-between here obviously there’s a lot of contact back and forth between the right-of-way agents in calling you, and calling you back, and coming by. Then there will be a final offer with an actual appraisal, and make no mistake this appraisal will be favorable to the pipeline company.
You will see that valuation and be surprised and shocked why it’s so low, and then after that, the pipeline company has the right to file a condemnation suit. So, giving you the final offer with an appraisal, that’s all part of the step before they can file a condemnation suit.
A condemnation suit is filed, along with the filing of that condemnation suit oftentimes a pipeline company will go ahead and have special commissioners appointed, and you all probably have heard about special commissioners, but they’re not the county commissioners. These are three landowners from the county that are appointed by the court.
You might wonder how are these three people picked? Are they picked like a jury selection? Is that the same kind of jury role? It could be. A lot of times it’s just three landowners that are familiar to the court. Maybe they’re realtors or appraisers, but normally, they’re persons that are familiar with real estate. Maybe they are farmers, ranchers, or people like that.
Landowner Rights at the Special Commissioners’ Hearing
Next step is the Special Commissioners’ Hearing. Special Commissioners’ Hearings normally last, in a pipeline case, two to three hours, so call it just a half-a-day.
At that hearing, normally you put on testimony. the pipeline company will put on their pipeline company representative, he’ll talk about the pipeline project, the importance of the pipeline project, all these different things about the pipeline project, and they’ll be represented by an attorney.
The pipeline company’s attorney will put on evidence of the appraisal, or the valuation by their certified appraiser. This is the appraisal that was given to you as their final offer. That appraiser will appear, and talk about the appraisal.
The landowner can appear by himself or he can appear represented by a lawyer. The landowner has a right to cross-examine every witness that the pipeline company puts on. The pipeline company asks its witness questions, and you or your lawyer have a chance to ask that witness questions as well.
Then also, the landowner has a right to testify, and also has a right to put on the landowner’s own witnesses. So what does that mean? At special commissioners’ hearings I have my landowner testify about the value of the property. The landowners testify about all the unique characteristics of the property and what they believe the property is worth. The landowner can also talk about how this pipeline is going to affect the value of his or her property.
Those are all things that I have my landowner testify to, and depending on the circumstance and the case, we have our expert as well. For strategic purposes, sometimes we don’t have our expert there. Sometimes we’ll have a tree expert there, sometimes we’ll have other experts there. If the landowner is leasing the property to a farmer or rancher, we’ll have a farmer or a rancher there talk about the effect of this on the current operation. That’s what the Special Commissioners’ Hearing looks like.
After that the Special Commissioners will issue an award, and that award is their interpretation based upon the evidence of how much the landowner should be compensated.
Then the question is, well is that it? [Is the process over at that point?] Well, no it’s not it. Either side, landowner or pipeline company can object to the award and you’ve got a certain time period in which to object to the award, but either side can object to the award.
That’s why I always tell my clients, if things go really, really well for us, the pipeline company will probably object to the award. So don’t get too excited from a huge award from the special commissioners. On the flip side, if things don’t go well for us for whatever reason, don’t be too upset because we will object to the award. And then what does it mean?
Landowners Rights – Starting Pipeline Construction & Litigation
The case goes into normal litigation, and we can talk about exactly what that means, but one other catch before that is the pipeline company has to deposit the award in the court. So whatever the award is, to begin construction they have to deposit the award. Then key part is yes, construction can begin. It cannot begin before that.
So for the pipeline company, yes, oftentimes they’re in a real big hurry to get the Special Commissioners’ Hearing out of the way, because after that they deposit the award, they can get started with construction.
The regular civil litigation process includes sending out discovery, taking depositions, going in mediation, having a trial, different motions with the court. Maybe you all have been involved with other types of litigation, breach of contract, you name it, — it’s the same type of process.
At a trial, and the trial can be with just a judge or a jury. Most of the time one side or the other will ask for a jury, so they can have a jury trial. Like any other civil litigation, either side, if they’re unhappy with the result of the trial can appeal. This could be a very, very lengthy process if not resolved somewhere along the way.
Their objective is to get a signed easement as soon as possible, as cheap as possible, that’s all. And that’s their role, just like my role is to represent a landowner. Everybody has their role.
Right of Way Agents Don’t Work for Landowners
Now right-of-way agents, I talk about this because I believe that they deceive and misrepresent things to landowners, and that extremely infuriates me. I shouldn’t say too much more than that. I get a little hostile with the right-of-way agents, and most of time I deal with the attorneys for the pipeline company.
Sure, I talk to the right-of-way agents, because I know that they’re involved through the beginning stage. But normally, the cases that I handle move on to further stages and that’s when I deal with the attorneys.
Just know that the right of way agents don’t represent you. They will make it sound like they are trying to help you out and take care of you. Of course they’ll say that they’re working to get you as much as they can from the company. I’ve heard it all. Just know, they don’t represent you.
One of the first landowner condemnation cases that I started handling was representing a client of mine from years before. This is a client who years before had me handle a breach of contract case for him. And he calls says, “Hey Phil, can you take a look at this easement agreement, and can you help me get it fixed?”
I said, “send it over”. He sent it over and of course what did I see? I saw his signature at the bottom and I saw it recorded. And I said, you’ve already signed this thing and it’s recorded, it’s too late. And this is his words not mine, “The right-of-way agent said that we could always change it.”
So that, once again, I want to warn everybody. I want to warn landowners, just be aware of your right-of-way agents, that’s all. Are they helpful in providing you schematics and surveys? Sometimes they are. Don’t rush to sign.
When I speak to right-of-way agents, once again, it always feels like, well it’s got to be, this Friday, we’re looking to wrap everything up, or, you name it, and I’ve heard it. There is no rush, I’ve explained the steps, right? There is no rush.
There may be a rush for the right-of-way agents, they may get a bonus for getting as many done as possible within a certain amount of time, I don’t know. There probably is an incentive for them getting more easements for less money, I just don’t know. But once again, not your concern, they don’t represent you.
There are do’s and don’ts in negotiating. Do reject the first offer in the proposed easement agreement. I met somebody three weeks ago, and the guy said, “Oh yeah, well I took their first offer and signed.” I guarantee the first easement agreement is not landowner friendly, that’s all. And the first offer, is not their best offer, end of story.
Don’t provide information to the right-of-way agent. One of the first things I always see is a permission to survey, a little simple, one-line sentence that says you allow us to go on your property. Please sign here, and then it’s a questionnaire saying, please provide us all kinds of information about your property, and what’s that for? It’s for them to use that information against you in the valuation, that’s all.
So, there’s information that the pipeline company will be entitled to at a certain point, in litigation. If they send over discovery, written discovery, to you the landowner and you’re represented by a lawyer, that lawyer will visit with you about getting responsive material together to respond to them. That’s the appropriate time, okay?
Also, at the Special Commissioners’ Hearing, if you and your lawyer are going to use an appraisal, or have an expert at your special commissioners’ hearing, there’s a deadline in which you need to provide that to the pipeline company. But it’s not at the very beginning when you’re right-of-way agent is sending you over this questionnaire and saying, “fill all this information out.”
Also, don’t agree on a monetary number first. What does that mean and why, and why not? Your monetary number depends a lot on the easement agreement. If the easement agreement is very landowner friendly, you know they’re landowner friendly, it’s very good for you, then your monetary number may not be as high as it would if the easement agreement was very favorable to the pipeline company. Well what does that mean, and what are some examples?
Many of these easement agreements disguise permanent ingress and egress easements. There’s so much focus on the pipeline easement — the 50-foot, permanent pipeline easement. Normally in the pipeline-friendly easement agreements, there’s maybe a sentence or two sentences that say, oh, and by the way, the pipeline company has a right to go on, over, through, your property to get to the easement.
So, if you got 100 acres, and then pipeline easements in the back of your property, they, the pipeline company can go from the county road, farm market road or whatever it is, all the way on your property, cross your crops, cross your pasture, to get to their easement. And it won’t be a well-defined ingress and egress, so it’s essentially a blanket easement okay? If that’s included in the easement agreement, then your compensation should go way up.
So, there’s lots of components that will affect how much you should be compensated. I always try to focus on the easement terms, the non-monetary easement terms first. So let’s get all that nailed down, and know what this easement is going to look like, from now until forever. And when we know that, then we can really start calculating your damages. We can determine your damages now and your damages to the remainder.
This is very important and maybe I went over a little too fast, I can break it down and talk about it more, but step one, really try to get the non-monetary agreement done, and then next, work on the monetary. And be patient, and please don’t rush, don’t rush to sign.
A lot of times, I try to look back on the psychology of why people rush to sign, and I think sometimes it’s just, I want to be done with this and get it out of the way. It’s the avoidance personality. There’s a lot of things I avoid too. This past weekend my wife was cleaning out dresser drawers and I wanted to avoid that, ’cause I don’t like organizing. But, this is not something that you need to just sign and get it out of the way because you want to avoid it. Don’t do that.
Landowner Rights & Key Terms in the Easement Agreement
These are things that I go through in my first meeting with my clients or prospective clients. I go through, these are almost always questions that landowners have right away. I talk about my proposed easement agreement that I send over to pipeline companies and it deals with all of these things, and it’s easement-specific.
You look at easements from back in the ’40s and they might say that Texaco has a right to have a pipeline over your property. That was a blanket easement, and they could put it literally wherever. Sure, those don’t really exist much anymore, but we want to be specific on the pipeline easement.
Often there’s this other ingress and egress, or call it a road easement, or whatever you want to call it, access easement. Those are oftentimes just appraised as a blanket easement so be careful, watch out. Non-exclusive, we want it to be a non-exclusive easement.
An easement with, absolutely you want to define that. Limited to one pipe, there’s always a lot of different anecdote situations where it wasn’t limited to a pipe and next thing you know, up in Dallas there’s a company coming back, 30 or 40 years later and going to put in another pipe. And they said, “Oh, sorry we’re not going to compensate you because the easement agreement that three landowners ago before you signed, didn’t limit the pipelines. So be careful with that.
Limit products that run in a line, and it could be limited to gas, or petroleum products, or just different things. Limit pipeline diameter, yes, we like to do that, and then the depth requirement, people say, well what’s the standard? Well, they like to say 36 inches. That’s normally the minimum, I’d say, we really push for 60. What we normally see, well we push for 60, we normally see 48 inches. For a lot of my turf grass farm clients, we obviously really push for more because we know that some of that cover is going to be taken over time.
You want to really watch out for surface facilities, that’s a big one. I’ve had a case where that wasn’t dealt with long time ago, and the next thing you know they were putting some surface facilities in the easement. We want to limit above ground appurtenances is what you’ll see the term called. These are above ground facilities.
Reserving the surface use for a broad range of things. You don’t want them to limit you to just having a pasture over it. You want to be able to have row crops, pasture, you name it. You want to be able to use your land for residential, commercial uses, you name it.
Access roads, we’ve already talked about this but I just really want to stress that double-ditching should be included. Everyone always asks about that, and so that’s a pretty key term. A key term, is the double-ditching.
Damage provision, if there’s extra damages, sometimes, I’ve seen situations where a company says, “We covered that, in our payment to you we covered that.” Well, you didn’t cover, there’s provisional fences, but in this particular case it was, they had a spill of oil, a spilled product out there on this guy’s couple of acres of property. And I said, well that wasn’t covered in the compensation we got when you paid us for the easement.
Required restoration, we go into detail on what we would like them to do, even though most of the time we don’t assume that they’ll do it the way that you all want it done. So we try to get compensated as well for the restoration, because we know that there’s going to be some sinkage, and you’re going to have to do some more disking and leveling, but we definitely try to address restoration. So that’s about fencing and road repairs, and then termination of the easement.
Termination of easement is always difficult. We ask for that, sometimes we get it, but if this pipeline’s not used for a period of two years then it terminates and either the pipeline’s removed, or capped, or things like that.
No arbitration, I don’t see this very often, but I don’t like arbitration provisions in any agreements, that’s all.
Landowners Rights in Damage Calculations
There’s a couple of components, I’m not going to get into all the details, but the key parts are, so what’s the highest and best use of the land? It could be farm and ranch and pasture, that’s probably going to be a lower valuation, and sometimes that is the highest and best use of the land. But as we see with, and it very much could be your piece of property or it may not, but depending on the piece of property in the geographical location, near a suburb, near a city, near a town, it could be future residential, or if it’s on a busy highway, although it’s agricultural land, it could be it’s highest and best use commercial or retail. So that’s an important component, is what the highest and best use of your land. That’s going to play into what’s the average value per acre? Or what’s the value of your tract of land?
Once an appraiser comes up with that, then we go into what’s the value of the part taken? So you’ll hear these terminology in condemnation, what’s being taken, the taking, what’s the value of the part taken? Let’s assume the easement is 50-foot wide, and certain amount long, and so that means the easement area is two acres. You’ll see that on the survey, it’s how many square feet or acres. If that area of the 50-foot wide easement is two acres, they’ll say, well the part taking is two acres.
Is it completely 100% taken? Well the answer would be no, because if it was 100% taken they would own that strip of land and you would not, right? So you’ll see a little percentage down there. Because it’s an easement, there’s a percentage of what they’re taking, or flip it around, there’s a percentage of what you’re keeping. A lot of times we’ll say, the part that’s being taken is 90%. Why, because you really only have the right to walk on the easement, or graze cattle on the easement or go across the easement, but you can’t build a house on it and you can’t build any other structures on it, so essentially they’re taking almost all the rights on that two acres.
Anyway, we talked about what’s the value of the part taken, what’s the percentage of what they’re taking, and so you’ll see this calculation. If they say look, the land is worth $10,000 an acre, they’re taking two acres, that’s two times 10, that’s 20,000, and then 10% you’re still keeping, that’s 2,000, so the value that they’re taking is $18,000. That’s part of this calculation. And most of the time, the pipeline companies will say, and that’s it! We’ll offer you $18,000, thank you very much.
Because they say, there is no damage to the remainder. Once that pipeline’s in the ground, don’t worry, we’ll cover it up, you’ll never know it’s there, right? Well, you can’t build on it, you can’t have trees on it, because in their easement agreements they say, we have the right to cut down any trees and remove ’em from the easement area and we’ve got the continued right to go on the easement area, maintain it, all these different things. Our position is, and from time to time I see pipeline companies agree with this but most of the time they don’t, but our certified appraisers will say, there’s a damage to the remainder. Simple example, if your property is worth $100,000 prior to the taking, prior to them putting in a pipeline, and after they put in the pipeline it’s only worth $90,000, then there’s a 10% reduction in the value. The damage to the remainder would be 10% to the whole. It’s now not worth $100,000. It’s worth $90,000. That’s the damage to the remainder.
So just real quick, our calculations are, what’s the value of what they’re taking and what’s the damage to the remainder. We total that up and that’s your total damages.
Now there’s some other components. We don’t forget that look, they may be taking several easements. Sure, an easement for the pipeline like we said, maybe they’re takin an easement for an access road, don’t forget about that, oh-oh, so that’s another taking, that has another effect on the damage to the remainder.
Then there could also be some cost to cure. What would be an example of a cost to cure? A recent case, LCRA case, my client was going to be able to irrigate all his property with one irrigation system. LCRA comes in, puts in a canal, divides the land, and he’s going to have to put in two irrigation systems. So the cost to cure, to be able to irrigate all his property now is going to cost him another cost of an irrigation system. Cost to cure is also disking, leveling, things like that to get it back into shape. Cost to cure, repair the road, things like that. Loss of production.
There could be a loss of crops in that easement area. Say you’re growing turf grass, row crops, you name it, there’s going to be some loss of production during construction and there may be loss of production for several years after that. So that’s the damages.
Attorney’s Fees in Condemnation Cases
I always talk about this. It’s something that I want to bring out and talk about. Sometimes clients are, I don’t know if I want to say reluctant or bashful about asking. That’s something you need to ask about.
I want to provide information, that’s why we’re video taping this. What’s my recommendation, you’ll see it in a second, but it’s get a landowner condemnation lawyer. Somebody, it doesn’t have to be me, it can be anybody. But get a lawyer who knows what they’re doing, who handles these kind of cases, and that’s why I want to talk about attorney’s fees.
If you are going to hire a lawyer, ask the lawyer about attorney’s fees. If you want to talk to me, ask me about attorney’s fees. The way I operate and most condemnation lawyers operate is, they operate on a contingency fee basis.
If we go to court and we win, or we get more than what the pipeline company was offering shouldn’t we get our attorney’s fees paid? Unfortunately the answer’s no. You don’t get your attorney’s fees paid for in Texas. There’s been legislation proposed before that tries to give the landowners their attorney’s fees if they’re successful in getting a higher amount in court or at a Special Commissioners’ Hearing.
It’s been unsuccessful. You don’t recover your attorney’s fees or expert fees. Many states do allow that, not in Texas.
Now we talk about, let me jump to how attorney’s fees work. Hourly vs. contingent. Most landowner condemnation lawyers work on a contingency fee basis. The contingency fee normally operates on whatever your initial offer was, that’s yours 100% to keep. Anything above that amount is the result of your lawyer’s work for you. The contingency fee is typically 1/3 of that result of your lawyer’s work, but I’ve seen it as high as 45% of that gain. If it’s a third then you would keep 2/3 of the extra money you receive over the initial offer.
Who pays for the experts and case expenses? That’s always a question you should ask your lawyer. Some lawyers will say all of it comes out of the settlement, or all of it comes out of the landowner’s portion. Some lawyers say it comes off of the top. What I do is I say let’s share it, I’ll pay 1/3 of the case cost, expert fees, you pay 2/3. So, we share it.
I was talking to a lawyer yesterday, and he says he does it the same way. We were talking about a different lawyer who takes the case expenses out of the landowner’s portion of the payment. So ask that question, be aware of how the arrangement is, it’s really important.
Document Your Land when Faced with Condemnation
What should you do when you’re faced with condemnation? I’m going to say we’re already past the initial step because you’ve all already been contacted, but I always say document your land. Take pictures, take video. Everyone’s seen the before and after pictures right? Get good pictures and video, right now, of how your land is, right now, okay? Of everything, the fences, the trees, the areas that are going to be affected, obviously.
If you’ve a got a road and it’s going to be cut through, we want to document that and know exactly, be able to show the Special Commissioners and the jury potentially, what that road looks like and how it’s going to be affected. These are photos in our most recent Special Commissioners’ Hearing two weeks ago. Extremely helpful are pictures of the irrigation and the existing piping on the property and how it’s going to be affected by the pipeline. We’re going to have to reroute a lot of irrigation piping.
Keep all the correspondence that you get from the pipeline company, the right-of-way agents. Keep all that and provide that to your attorney. It happens a lot of times where a client won’t keep track of a lot of that, and then the pipeline company tells you the right-of-way, well I already sent that, I already sent the appraisal, and we’re happy to track down the appraisal because it got misplaced. So keep track of all that, and the different times that you spoke with the right-of-way agents, and frankly, the number of times that the right-of-way agents have called you.
I like saying, or asking the question to my landowners, so how many times did they contact you about this easement agreement? Well 20 times, or 18 times after I told ’em to stop calling, that’s all. It’s powerful and it’s true, so jot down important issues and concerns and questions that you have. Who’s this for, jot that down for your attorney. If there’s something that is extremely important to you, let us know, we’ve got to know.
There was a creek on a particular property that, that was where my landowner and his siblings grew up, swimming in this waterhole, it was a creek with a lake. That’s where we grew up swimming all the time. Make sure they either go around it, or bore, and in the boring, make sure that it doesn’t drain the waterhole. That was really important to them. Out of everything that we talked about, that was the most important.
Other times it’s, this is pasture, the only water source for my cattle is back over here by the pens. this is going to bisect my property, I need to make sure that my cattle can get to water, right? Okay, so we need to make sure that’s dealt with. Another one, it was just a rotation of some cattle, and so we wanted to make sure that my guy, he grazed his cattle, we knew that construction was going to happen a certain time so he made sure he grazed that particular pasture right before construction and then he didn’t have to worry about it for awhile.
It’s something like that, jot those things down and mention them to your attorney. And then like I said, talk to a landowner condemnation attorney. I’ll say it again, it doesn’t have to be me, but find a good one that knows what he’s doing and talk to him, it’s that important. I’m happy to take any questions, I feel like a ran through it a little quick, I apologize, but like I said, it’s a lot of information.
This is just to give you a taste of the issue that it sounds like all of you are facing right now, and I want you to be a little more familiar with the steps and what the time frame is. I don’t want you to feel pressure, don’t want you to feel like something’s got to happen right away or else. You’re going to give up something, and I think that’s what you’re led to believe a lot of times. My experience is that there’s no rush to have to agree on anything, and don’t agree on anything if you’re not comfortable.
And also I say this, not everybody’s the same, not everybody’s tract is the same either. Why do I say that, because, you may hear someone saying, well I signed for this much, it may be true, it may not be true. Also, if they’re happy with that and satisfied with that, then that’s good, good for them. I always say let’s focus on your piece of property, your tract of land, every tract of land is unique, it’s special and different, and I can into how, and I don’t probably need to but you all know that.
If a pipeline runs through some structures, that’s different than if it runs through a piece of your property way at the back that you probably never even see, that it’s pasture and it’s not going to affect much of anything. Are you damaged, sure you’re damaged. Is it going to be the same as someone else’s damage? Probably not, that’s all. So, lots of things to take in consideration. No rush, with these right-of-way agents, and like I said, they’re going to put a lot of pressure on you. Just come up with a technique to I guess defer that pressure.