Search results for: buyback

Okay, we get it: the text of a statute is the text, and it says what it says. And Virginia’s “buyback” statute — which says that if a condemning agency hasn’t started the project for which property was condemned within 20 years, the agency must reconvey it to the owner upon demand — dictates that the owner must buy it back at the “original purchase price.” 

And the Virginia Supreme Court in Kalergis v. Commissioner of Highways, No. 161347 (Oct. 26, 2017) concluded that “original purchase price” means exactly that — the price for the property which the condemning agency paid back in the day, regardless of whether or how the agency altered the property in the intervening 20 years. And there’s something about that conclusion that doesn’t quite sit right. 

There, VDOT acquired the property from Mr. and Mrs. Kalergis in 1994, taking about 1/2 of their 26-acre improved property for future use as a highway. The land was improved with a house, guest house, swimming pool, stables, fencing, and terraces. The appraisal valued the land at $286,110, and the improvements at $863,890, for a total purchase price of $1,150,000. VDOT tore out the house, guest house, swimming pool, stables, fencing, and terraces. But after 20 years, it had not used the land for the project, and the Kalergis eventually exercised their statutory right to demand VDOT reconvey the property to them at the “original purchase price.”

In the Kalergis’ view, that meant the price of the land. Because, after all, VDOT had removed all of the improvements. So they demanded that VDOT sell back to them at the original purchase price for the land, $286,110. Not so fast, argued VDOT, the “original purchase price” of the property back in 1994 was way more, $1,150,000, and that’s what you have to pay us in order to get the property back. That makes no sense, argued the Kalergis, that price was for the land plus the improvements, all of which you’ve destroyed? 

The Virginia Supreme Court sided with VDOT, concluding that “original purchase price” means the amount the Kalergis paid, not the component parts of the appraised value. Whether that made sense or not didn’t trouble the court, because the court is stuck with the text of the statute which says “original purchase price.” That the court implicitly concluded the legislature meant to say something ridiculous was of no moment: “If the General Assembly had intended for courts to use the ‘appraised value’ instead of the ‘original purchase price,’ the legislature would have used that language in [the statute].” Slip op. at 5. The fact that the parts were appraised separately didn’t matter, what mattered was the total price, regardless of how the agency had altered the property in the interim. 

So the former owners have to buy back the raw land at about 300% more than VDOT originally purchased it for, all because the agency tore out the improvements. 

Thus, the lesson from this case is for condemning agencies which don’t want to be bothered by the statutory buyback provision to alter the land so that it wouldn’t be worth it for the former owner to buy it back if the agency doesn’t eventually use it. The lesson for property owners and their lawyers is to try and structure the original purchase price to not simply recognize appraised values, but perhaps force the agency to purchase each component separately, if that is possible. 

Finally, we ask: is the result in this case really what the Virginia legislature intended when it adopted the buyback requirement? To us, this case illustrates the way that a statute which is well-intended cannot account for the myriad situations that could arise. Will the Virginia legislature revisit the statute in light of this case and tweak it? We’ll see. 

Kalergis v. Commissioner of Highways, No. 161347 (Va. Oct. 26, 2017) 

Continue Reading “Buyback” Statute Requires Owner Pay Premium After Condemnor Devalues Property

The majority opinion of the Texas Supreme Court in State of Texas v. JRJ Pusok Holdings, LLC, No. 24-0447 (June 12, 2026), starts off pretty good:

The right to own property is “fundamental, natural, inherent, inalienable, not derived from the legislature and . . . preexist[s] even constitutions.”

Slip op. at 1-2 (citation omitted).

And it gets better from there. At issue was one of those “buyback” statutes — property taken for a public use that isn’t used for that public use within a defined time frame can be repurchased by its former owner. In this case, Texas’s (as the caption indicates).

Texas’ “Landowner’s Bill of Rights” provides that “[i]f private property was condemned” and within 10 years the property isn’t used for the stated public use, becomes unnecessary for the public use, or “no actual progress is made toward the public use,” the prior owner “may have the right to repurchase the property for the price paid to the owner[.]”

Back in 2013, the state was in the process of developing a highway project and sent an offer letter to the property owners to the effect that if the DOT’s offer was not accepted within two weeks, “eminent domain proceedings will be initiated by the State.” Slip op. at 4. The owners did not respond positively, so the State pulled the trigger and “petitioned for condemnation in April 2014 with a suit in a Harris County civil court at law.” Id. Three weeks later, a compromise: the parties settled the condemnation case in return for $681k. The trial court dismissed the State’s condemnation case.

But then “[g]overnment official decided to reroute the highway project, leaving a portion of the condemned land unused.” Slip op. at 5. Owners pinged DOT about whether the State would be willing to sell back the surplus land. When the State declined, the owners assigned their statutory repurchase claim to JRJ Pusok (the current real party in interest).

When JRJ sued, the trial court dismissed the claim because the State had not waived sovereign immunity. The court of appeals, however, reversed.

The Texas Supreme Court affirmed, agreeing that in 2003, when the state legislature created the first statutory repurchase right (and then responded to Kelo two years later), the people of Texas wanted more substantial limits on government’s power to interfere with property right. Thus, the court concluded, “the State is not immune from repurchase claims.” The court rejected the State’s somewhat bizarre argument that although the statute conferred jurisdiction over a repurchase claim, the State nonetheless remained immune because the legislature had not expressly waived sovereign immunity. Slip op. at 11. The court held no, conferring jurisdiction is pretty much a waiver. For details, see pages 14-16 of the slip opinion (“The 2011 statutory amendments make clear that the Legislature
anticipated the State as a defendant in suits to vindicate repurchase rights.”).

Next, the court turned to the most interesting issue: did the State’s purchase under the threat of eminent domain constitute acquisition “through eminent domain” as the statute requires? The court held yes:

A right of repurchase belongs to “[a] person from whom a real property interest is acquired by an entity through eminent domain for a public use.” The State concedes that it acquired the property for public use, and it does not dispute that JRJ meets one of the five predicates for seeking repurchase. The State argues, however, that its acquisition was not “through eminent domain,” as Chapter 21 requires, because the Landowners settled with the State on a value for the land after the State filed suit.

Slip op. at 21. The court held that the “logical reading of ‘through eminent domain’ is ‘by means of the State’s power to take private property for public use.'” Slip op. at 21-22 (footnote omitted). You don’t need a final judgment adjudicating value for an acquisition to be “through” eminent domain, and it is enough that the acquisition was in the course of an eminent domain lawsuit, even if the parties ultimately compromised and settled before reaching final judgment:

A settlement as to the property’s value does not alter the State’s acquisition of it “through eminent domain.” The deed in this case acknowledges the Landowners conveyed the property as a result of “ED proceedings.” The Landowners did not sell the property in an arm’s length transaction on the open market; rather, the Landowners surrendered their property in concession to the State’s coercive power.

Once the State invokes its eminent domain power, landowners need not proceed to a judgment as to adequate compensation to preserve their repurchase right. The State’s forced transfer via a condemnation suit is an exercise of its power to obtain the property “through eminent domain.”

Slip op. at 22-23 (footnote omitted).

The court also concluded that the buyback provision applies even where only a portion of the property isn’t used for the designated public use, mostly because the statute uses the term “the property” and not “the entire property.” Slip op. at 23.

We think the majority got it right when it employed a plain language interpretation of the statute, and construed it to effect its purpose. You know, like eminent domain statutes are supposed to be applied and interpreted.

State of Texas v. JRJ Pusok Holdings, LLC, No. 24-0447 (Texas June 12, 2026)

Those statutes that require that if a condemnor doesn’t use property taken, that it must try and sell it back to the (former) owner seem like a pretty good thing. You have your property taken, but if the taker doesn’t actually need it or use it, hey you can get it back. Feels pretty good. In theory.

But in practice, maybe not so much. Try tracking down the former owners after years and see how easy it is to find them (not). Try figuring out the price. Now don’t get us wrong: we’re not saying that these provisions aren’t good or — especially — don’t mean well. Just that, as in many things in law, the devil is in the details.

So it is with Utah’s version. At least according to the Utah Court of Appeals in Cardiff Wales, LLC v. Washington County School District, No. 20191035-CA (Mar. 4, 2021). There, the school district wanted Cardiff Wales’s property. It did the right thing: it offered to buy it. But as is often the case, during the negotiations for sale the district reminded Cardiff Wales that the district possess the power to simply take the property if CW didn’t agree to a voluntary sale. “So, ‘[i]n order to avoid an eminent domain lawsuit, [Cardiff] agreed to sell the Property to [WCSD].'” Slip op. at 2.

The parties did what parties do when selling property: they drew up a purchase and sale agreement (statute of frauds flashback), that noted:

The Agreement indicated that WCSD had advised Cardiff that it intended “to acquire a portion of the [Property] through condemnation if necessary” but that the parties had “negotiated an alternative to the condemnation proceeding.” The Agreement further stated, “In lieu of an involuntary conversion thereof, [Cardiff] agrees to sell the [Property] to [WCSD] . . . upon the terms . . . set forth in this Agreement.”

Slip op. at 2-3.  

Flash forward 10 years. The school district decided “it no longer needed the Property and decided to sell it.” Utah’s statute says that “[i]f the state or one of the state’s subdivisions, at the state’s or the state’s subdivision’s sole discretion, declares real property that is acquired through condemnation or threat of condemnation to be surplus real property, it may not sell the real property on the open market unless … the real property has been offered for sale to the original grantor, at the highest offer made to the state or one of its subdivisions with first right of refusal being given to the original grantor…” Utah Code § 78B-6-521. But the district didn’t offer it back to Cardiff Wales and instead sold it to a developer.

Cardiff Wales sued under the statute, asserting it possessed a right of first refusal because it sold the property to the district under threat of condemnation. The trial court granted the district’s motion to dismiss for failure to state a claim because the sale wasn’t “under the threat of condemnation.”

The court of appeals affirmed. The statute defines the term “threat of condemnation” as not merely a casual threat of condemnation as the case here (i.e., “you better sell it to us, property owner, at the price we’re asking because if you don’t, we’re going to take it anyway and force a price”), but only when the state or municipality “specifically authoriz[es]” the use of eminent domain to take. As the court phrased it, “Because Cardiff made no allegation that a final vote was taken and the use of eminent domain powers approved in the complaint, the district court correctly dismissed the complaint for failure to state a claim upon which relief can be granted.” Slip op. at 7.

In short, the property owner here should have held out and made the district institute the condemnation process. 

Now we realize this is a statute, and the court was limited to how the legislature framed the text. So we’re not suggesting that the court got it wrong. Just that the point of the statute seems to be that when an owner sells after being under the eminent domain gun — whether official, or merely “reminded” of — the point is the same: it is not really an arms-length market transaction. Maybe this case is one that pushes the legislature to clean up the wording of the statute.

Either that, or smart real estate transaction lawyers are going to be advising their clients not to voluntarily negotiate and sell to purchasers who possess the power of eminent domain, and instead insist they institute the condemnation process (and only then complete the sale), just to preserve the owners’ rights.

Cardiff Wales, LLC v. Washington County School District, No. 20191035-CA (Utah App. Mar. 4, 2021)

Continue Reading Utah App: Sale Under Threat Of Condemnation Wasn’t Really A Sale Under “Threat Of Condemnation”

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The conference is being held at the Arizona Biltmore.

Proof that we are actually in the room (and not on the golf course).

Here are the cases which I mentioned at today’s conference. What a great turn out (130+ lawyers, appraisers, right-of-way professionals, and others).

Many thanks to colleagues Chris Kramer and Jennifer Cranston for planning the conference and for the the invitation to present, and to my co-panelist Laura Curry.

Public use, public purpose, and necessity

Just compensation and damages

Regulatory takings and inverse condemnation

Other cases and issues of interest

Other conferences of interest

The balance of the presentations are very good, so we’ll be spending the rest day with our colleagues, learning.

Continue Reading Links From Today’s Arizona Condemnation Conference

IMG_20171211_090714This photo of the view from the lectern at the start of the day
proves we really were in the room and not distracted by all the distractions
possible in Las Vegas

Here are the materials and cases which I spoke about earlier today at the CLE International Eminent Domain Conference in Las Vegas. I had the lead off session on updates, and my talk focused on cases that I didn’t cover in the written materials:

My thanks to Autumn Waters and Darius Dynkowski for asking me to present this session.

The view in the other direction
(courtesy of fellow faculty member Anthony Della Pelle)

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Continue Reading Links And Materials From Today’s Las Vegas Eminent Domain Conference

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Here are the links from today’s session on “They’ll Take My Big Gulp From My Cold Dead Hands – Public Health, the Police Power, and the Nanny State” at the ABA Midyear meeting in Chicago.

Joining me was Sarah Conly, Professor of Philosophy at Bowdoin College, author of “Against Autonomy: Justifying Coercive Paternalism;” Alderman George Cardenas, who represents Chicago’s 12th Ward; and Walter Olson, Senior Fellow at the Cato Institute’s Center for Constitutional Studies, and guru of the “Overlawyered” blog. 

And was it cold out today, you ask? Affirmative.

And finally, here’s that John Waters clip that started us off.

Continue Reading Three Cheers For Our ABA Program On “Coercive Paternalism” And The Nanny State