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Right of entry held to be compensable under the takings clause

September 20th, 2013 by Joseph William Singer

The Texas Supreme Court held that a transfer of land to a city with an option to repurchase if the property were ever used for non-park purposes constituted a fee simple subject to condition subsequent and that the right of entry was a property right for purposes of the takings clause and compensable when then city failed to honor the condition. El Dorado Land Co., L.P. v. City of McKinney, 395 S.W.3d 798 (Tex. 2013). The deed provided that the conveyance was “subject to the requirement and restriction that the property shall be used only as a Community Park” and gave the grantor the right to repurchase the property at the price the city paid for it or the current fair market value whichever was less if the property were not used for the designated purpose. Although the repurchase right was called an option to purchase, the Texas Supreme Court interpreted it as a right of entry.  When the city built a library on the property, the grantor sought to exercise the option; when the city did not respond to its demand, the grantor sued claiming the city had taken its right of entry without just compensation, and the high court agreed with its claim. The court remanded to determine whether construction of the library violated the conditions in the grant.

Posted in Estates & future interests, Real estate transactions, Takings, Title issues | Comments Off on Right of entry held to be compensable under the takings clause

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