Business Impact in Texas Eminent Domain

Where Texas is narrow

Owners often arrive assuming that lost business value, lost profits and relocation costs follow automatically from a taking. In Texas the position is more restrictive than in several other states, and it depends heavily on the facts and on how a claim is framed.

What is usually recoverable

The land and the improvements attached to it are compensable in the ordinary way, and that includes a good deal of what a business owner cares about.

• The real property taken, at market value.
• Improvements and fixtures attached to the realty, such as buildings, canopies, racking, pens, wells and paving.
• Damage to the remainder, including lost parking, circulation and access that reduce what the site is worth.

What is treated restrictively

Lost profits, business interruption during construction, goodwill and moving costs are the categories where Texas is least generous and where the answer is most fact dependent. Some may be reachable in particular circumstances. None should be assumed.

Tenants and leases

Where the business occupies leased premises, the lease decides how compensation is apportioned between owner and tenant, and whether the lease terminates on a taking. A tenant may hold claims of its own for fixtures or for a leasehold interest. Read the condemnation clause before negotiations begin, not after.

What to gather

• The lease, with the condemnation clause identified
• An inventory of fixtures and improvements attached to the realty
• Site plans showing parking counts, circulation and loading
• Photographs of access and frontage before construction
• Records showing how customers and deliveries reach the site