Suppose you are a business owner that has been operating for years out of the same location. Then you get a letter from a governmental authority indicating that all or some of your property will be subject to acquisition for the expansion of the road that helped grow your business. This is the scenario that confronts many property owners every year as the Houston area expands its infrastructure.

Condemnation is the process of the government taking private property, without the consent of the owner, for public use through the power of eminent domain. Condemnation by a public agency can occur for various reasons, such as road expansions, regional drainage, or transit facilities. Some private sector companies such as railroads or utilities also have the power of eminent domain. The law requires that parties engage in Good Faith Negotiations (including independent appraisals and counter offers) to reach an agreement. This is how most acquisitions are completed, but if no agreement can be reached, then the property is subject to condemnation proceedings. Owners whose property has been acquired are entitled to just compensation under the law.

Although there are legal distinctions between acquisitions vs. condemnations, the effect on the property owner is similar. If a property owner is facing a forced governmental taking, there are several steps that should be taken.

Analyze the Impact - Review the preliminary plans and maps and plot the legal description so you know how much property might be taken. Stay in touch with the agency in charge of the project, because the preliminary plans can change. Reevaluate your business real estate needs. What will remain after the acquisition, and will it support your business? It may be best to identify a new property.

Know the Agency and the Schedule - You need to know which governmental agency you are working with and their schedule. For example, it is widely believed that the proposed Hempstead/290 Corridor right-of-way acquisitions are controlled by the state. This is only the case on the Northwest Freeway where the process has yet to begin. Property along Hempstead Rd. will be acquired by Harris County, and those acquisitions are moving ahead within 18 months.

Negotiate Access Issues - As the government reconfigures your property, they may also change the ways that you are allowed to access the property. The number and location of driveways can affect the value and usefulness of the property. Many agencies have broad powers in determining the access permits granted to a property owner. So in addition to getting monetary compensation you may need to negotiate the access permits.

Tenant Issues - If there is a tenant leasing the property, then the condemnation language in their lease will determine the tenants options to terminate the lease, be compensated or find another suitable location.

Know Your Rights and Get Professional Help - Depending on the scope of a project, some owners represent themselves, others will retain an attorney. If the agencys offer seems low or unfair, it may take the efforts of an attorney and an appraiser to negotiate a settlement. An experienced commercial broker can also assist in evaluating alternative scenarios for maximizing the value of the property and the business located on the subject property.

For property owners and tenants, it pays to be informed. By keeping abreast of developments and condemnation proceedings, you can avoid a negative outcome.