How to Select a Right-of-Way Consultant

As a right-of-way agent, I have had NUMEROUS property owners tell me that they consulted their (insert here the title of your choice: attorney, Realtor, broker, appraiser, friend, mother, priest, dog, spiritual guide, imaginary friend, or whatever) who told them that what the agency proposes to do will RUIN the value of their property.

The problem is the most people don't have a clue how to value property. Even fewer understand the nuances of right-of-way. Add to that the skills that someone needs in order to be considered competent to help others, and it becomes obvious that well meaning individuals really do more harm than good.

In an effort to help property owners, I will tell you some of the MINIMUM requirements that someone must have in order to help you understand a particular right-of-way project.

1) Can they read and understand engineering? I have tests that I give my students in order to verify that they have a firm understanding of how to read engineering. Engineering and construction design plans are difficult to read unless you have been taught how to understand them. Things are not always drawn to scale. Often the horizontal scale and vertical scales are different. The person who advises you needs to be able to thoroughly understand the subtleties and nuances of what is being proposed.

2) Do they have a firm understanding of how property is valued? In Texas, the only people who are allowed to value property are appraisers, brokers who follow the Uniform Standards of Appraisal Practice, and property owners evaluating their own property. Ask the person helping you what experience they have valuing property.

3) Do they understand Eminent Domain and Real Estate Law? What might seem obvious to you may not be legal. Often property owners ask me to justify things using their logic. What I tell property owners is to tell me what they want, and let me figure out how to ask for it. The reason is because some things are non-compensable under the law. Asking for something that the law prohibits makes the requestor seem naive. You need your advisors to be competent professionals.

4) What is their education background? Right-of-way acquisition requires competence in engineering, appraisal, law and negotiation / communication. Engineering, appraisal and law all require college degrees. If your advisor doesn't have a college degree, how effective do you think they will be having to work with others who are required to have one as a basic entry into the profession?

5) Are they licensed? In Texas, almost every profession is regulated and requires a license. Heck, my barber has to have a license. If your advisor isn't licensed, they probably aren't qualified to advise you.

6) Do they have experience with your situation? Those of us who are professionally designated are required to disclose if we don't have experience with something. If we don't have the experience with what is needed, we are required to work with someone who does. Everything goes back to working with PROFESSIONALS.

7) How are they paid? This is a VERY important question. For example, if you hire an attorney on a contingency to represent you, will they recommend something you need other than money? Many times I encounter situations where property owners really need engineering concessions. However, attorneys can't make money on engineering concessions. Therefore, you have to ask yourself if your consultant really has YOUR best interest at heart, or do they have theirs?

These are things you need to consider when listening to the advice of other well meaning individuals. If you would like for me to study your situation, I would be pleased to evaluate your situation free of charge as a public service to instill trust in my chosen profession. For me to review your situation adequately, please provide me the following. They can either be scanned as a PDF document (300+ dpi for engineering, drawings or photographs, please) or mailed to me:

· All correspondence from the acquiring agency

· The appraisal report (if one was provided)

· Legal descriptions and plats of the area to be acquired

· Construction design plans

· A copy of the legal document they want you to sign.

Upon receipt of the information, I will notify you with the expected date of my review. It takes me approximately one week to review a file adequately. After reviewing your right of way acquisition, I will send you my thoughts on the matter.

HB 3105: The Texas Gas Drilling Regulation Bill

Have you heard about House Bill 3105 being considered by the Texas Legislature? If you are a property owner in north Texas, you need to be familiar with it.

Over the course of the past few years, it has become fashionable and politically correct for municipalities to pass rules which make it almost impossible for gas companies to drill for gas and petroleum within their city limits. Well, the Barnett Shale is located within the city limits of many cities in north Texas.

Of course municipalities will say things like, "We are trying to protect property values" or "We are trying to protect our citizens" or "We are trying to protect the children." I won't question the motives of those who create the regulations. What I do know is this:

1) Much of the gas is located within the city limits of a variety of cities.

2) Many property owners would love to lease their mineral rights to energy companies.

3) Some of the regulations that municipalities pass prevent drilling for gas within their city limits except in certain circumstances.

4) If a gas company can't drill for gas, property owners won't receive royalties.

Effectively, what municipalities are doing prevents property owners from being paid for their mineral rights. That is what House Bill 3105 seeks to remedy.

HB 3105 does not prevent municipalities from passing rules and regulations that prevents gas drilling. What HB 3105 does is it allows property owners, whose property value has been reduced by more than 25% because of a regulation passed by the municipality, to sue the municipality for the damage to their property caused by the regulation.

I read an article in the Dallas Morning News about this HB 3105. Here is a link to the article. In the article, the Mayor of Flower Mound, which is reported to have one of the most restrictive regulations on drilling, is quoted as saying, "We would have no way to prevent a gas well permit."

This sounds amazing to me. What Ms. Northern is effectively saying is that she does not mind enacting regulations that reduce property values by more than 25%. What she has a problem with is her city having to compensate property owners when they do something that reduces the property values.

How would you like it if I was to do something that reduced your property value by more than 25%? Would you not want to have the right to sue me for damage to your property? What most property owners don't realize is that the government often exempts itself from the rules that the rest of us have to follow. HB 3105 removes the immunity the government has related to damages from drilling regulations.

If you are a property owner whose property has been reduced in value because of an action by a governmental agency, I would love to hear about it. Maybe I can help you.

In the interest of full disclosure, I have a gas lease, and I would be highly agitated if the city did something that prevented me from receiving royalties on my mineral rights.

SB 18 - New Rights for Texas Property Owners?

SB 18, commonly referred to as the Eminent Domain Bill in Texas, has been edited yet once again in a manner that I consider very favorable to property owners. Although SB 18 covers many topics, there is one in particular that should please property owners.

One of the provisions of the current version of SB 18 is that property owners will now have the right to purchase back the property that was taken from them if the acquiring agency does not use the property or advance the project within 10 years.

I have had several property owners express their frustration that an agency purchased property from the owner, depriving the owner from the rent, use or enjoyment of the property, only to have noting happen with the property. This is extremely frustrating for property owners who did not want to have their property taken from them.

SB 18 has a provision for property owners to re-purchase what was taken from them. That is a good step in the right direction.

Property owners should be pleased with the current version because the previous version required that the property owner pay "fair market value" for the property that was taken. The problem with that as I see it is two fold:

1) In 10 years after the property was acquired, what will the new "fair market value" be? Will it be higher than what was paid to the property owner? Probably. That means (according to the prior language of the bill) that property owners would be required to pay more to the acquiring agency than the agency paid the property owner. That doesn't sound fair to me.

2) Being very familiar with how public agencies determine "fair market value" I can tell you that there would be an additional cost of more than a few thousand dollars to hire an appraiser (of the agency's choosing) to determine the "fair market value" of the right-of-way for the property owner to re-purchase. Again, that does not sound very fair to me.

In summary, property owners should appreciate the added protections and rights granted to them in the most current version of SB 18. The Texas Senators are working on behalf of the property owners.

Welcome to Left-of-Way! Right-of-Way Information for Property Owners

Frequently we are asked if something is appropriate, if a property owner is being treated fairly, how to get a fair deal from an agency, how to negotiate for something and a variety of other topics. Realizing that property owners might like some help, I have decided to answer some of the questions in this format.

Please select a topic of your choice and let me know if the information helps you or others.

Jay