USA – TEXAS Law and Practice Contributed by: Taylor Cooksey, Philip Kinkaid, Serena Kramer and David Brooks, Cokinos | Young
2.7 Soil Pollution or Environmental Contamination Owners and operators of contaminated real property can be held liable to remediate hazard - ous substances under existing federal and state law. In order to become protected as an innocent landowner, a Phase I environmental assessment must be performed before a purchaser acquires real property. Depending on what is disclosed in that assessment, it may also be necessary to have a Phase II environmental assessment performed. State protections that may be available to some purchasers include those under two pro - grammes administered by the Texas Commis - sion on Environmental Quality: • the Innocent Owner/Operator Program; and • the Voluntary Cleanup Program. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law See 4. Planning and Zoning . 2.9 Condemnation, Expropriation or Compulsory Purchase Private land may be taken in Texas by eminent domain through condemnation proceedings instituted by authorised governmental entities, quasi-governmental entities such as municipal utility districts, and public utilities, provided the taking is for a public use and just compensation is paid for the taking. Texas law prohibits tak - ings to enhance tax revenues or foster economic development. The process is initiated by written notice given to the property owner. If the parties fail to agree on just compensation, the matter is litigated in the courts to determine the amount of compensa - tion that is appropriate.
may not limit the time for bringing suit on the contract to less than two years. It is unclear how this statutory provision applies to the common practice of requiring a notice of breach in less than two years. Representations and warranties insurance is not commonly used in Texas real estate trans - actions. 2.6 Important Areas of Law for Investors The most important areas of Texas law for an investor to consider when purchasing real estate will depend in part on the nature of the investment itself – eg, is the property producing income, is the plan to develop a residential or multifamily community, retail, office or industrial project, and does the plan involve operating, leasing, holding or selling and over what period of time? Depending on the nature of the investment and the plan itself, prioritising the areas of law in terms of importance will vary, but all areas of real property law are important, including: • title, zoning, land use, regulations, leasing and landlord/tenant issues; • environmental laws – conducting needed assessments for liability protection and iden - tifying potential contamination and develop - ment restrictions, including wetlands and endangered species; • business organisations law – entity selection for acquisition and operations; • tax law, for capital gains and margin tax issues; • oil and gas law, regarding surface use protec - tion from mineral owners; and • contract law.
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