On Monday, May 23,  Gov. Rick Perry signed Senate Bill 18, an eminent domain reform bill, into law.  The legislation dramatically tightens restrictions on state and local entities’ eminent domain authority.   The new law will require government entities to make a reasonable offer for the land, allow the previous land owner to buy the land back at the government’s purchase price if the land is left unused, and provide additional criteria that agencies must meet before declaring eminent domain over the land.

“I’m proud to sign into law stronger eminent domain provisions protecting Texas landowners from local and state government entities that might consider abusing private property rights,” Perry said in a press release.

In November 2009, Texans took the first step toward strengthening private-property rights against abusive eminent domain by passing Proposition 11 with an overwhelming 81% of the vote.  However, while passage of Proposition 11 was a good step, the legislature needed to complete the job and enact legislation to ensure property owners are treated in a fair manner.

The new law signed by Gov. Perry requires: 1) local and state government entities interested in acquiring private property to first make an offer, in writing and based on an appraisal, to the landowner to purchase the property through a voluntary sale for a fair price, 2) condemnation petitions to specifically state the public use for which the land is needed, 3) a governmental or private entity may not take private property through the use of eminent domain if the taking is not for public use, 4) a government entity that takes land to first have a record vote stating the land to be taken and the project for which it is being taken, and 5) entities to provide all appraisals of the property they have during negotiations.

Also in the law, landowners may repurchase their land if in 10 years it is not used for the public use for which it was condemned.

The Texas Association of REALTORS® supported the passage of S.B. 18.  While eminent domain does not have an impact on most common real estate transactions, it is important to remember that virtually the entire population of the world lives on land it does not own.  However, in the United States, Americans enjoy real property rights that are far more generous when compared to the rest of the world.  REALTORS® are uniquely positioned to ensure private-property rights are protected from abusive eminent domain practices.