In City of Houston v. Carlson, 451 S.W.3d 828, 830 (Tex. 2014), the City of Houston declared a condominium complex uninhabitable and posted notice that the affected owners would have to obtain certificates of occupancy. See id. at 829-30.
The posted notice warned that "failure to comply with this notice may subject you to a municipal court citation." See id. at 830.
The owners did not seek certificates of occupancy, but the City did not issue citations to the owners for failing to obtain the certificates. See id.
Instead, the City ordered all residents to vacate the premises. See id. Proceeding under the theory that their property was taken when they were ordered to vacate, a group of owners sued the City for inverse condemnation. See City of Houston, 451 S.W.3d at 830.
The City filed a plea to the jurisdiction, which was granted by the trial court. See id.
On appeal, the trial court's decision was affirmed by the Texas Supreme Court, which held that the owners had not alleged a regulatory taking. See id. at 831-33.
In so holding, the Supreme Court concluded that the owners were, in fact, challenging the procedure used by the City, not a land-use restriction, because their complaints were directed at the penalty imposed and the manner in which the City enforced its standards. See id. at 832.
The court observed that the owners had not contested any of the City's various codes or property-use restrictions or argued it was unreasonable to require multi-family residential facilities to obtain occupancy certificates. See id. at 831.
In City of Houston v. Carlson, an investigation by the City of Houston revealed various alleged structural, electrical, and plumbing problems in a condominium complex.
Of primary concern was evidence that an underground parking facility might fail, posing serious risk to dozens of units located above the garage. Id.
The city declared the condominiums uninhabitable and posted a notice throughout the complex stating (1) the condominium owners had ten days to apply for a certificate of occupancy and (2) failure to comply with the notice "may subject you to a municipal court citation." Id. at 829-30.
The owners did not apply for an occupancy certificate or make the requisite repairs. Id. at 830.
After a month passed without compliance, the city did not issue a citation, but rather ordered all residents to vacate the complex within thirty-one days pursuant to a city ordinance that authorized officials to "order the use discontinued immediately" when a structure "creates a serious and immediate hazard." Id.
After an administrative hearing, the city upheld the order to vacate. Id. The order to vacate was later reversed by a district court based on due process violations and the owners sold the complex for redevelopment. Id.
Subsequently, a group of owners (the "owners") filed an inverse condemnation action, alleging their property was taken when residents were forced to vacate. Id.
They sought compensation for years of lost use and other unspecified damages. Id.
The trial court sustained the city's plea to the jurisdiction, concluding the owners had not alleged a taking. Id.
The Fourteenth Court of Appeals in Houston reversed and the city filed a petition for review. Id.
The supreme court reversed the court of appeals' decision. The supreme court observed that the owners (1) "do not contest any of the city's property-use restrictions" or the "standards imposed" by the city, but rather "object only to the penalty imposed and the manner in which the city enforced its standards" and (2) "complain, for example, that the city did not specify the alleged violations," that "the punishment was excessive," and that "the safety regulations were misapplied vis-א-vis their property." Id. at 831-32.
Further, the supreme court stated the owners "appear to suggest that a civil-enforcement procedure alone can serve as the basis of a regulatory-takings claim," but "have identified no authority for such a proposition." Id. at 832.
Then, the supreme court reasoned as follows:
"We do not doubt, and the city does not deny, that the order to vacate interfered with the use of the respondents' property. Yet nearly every civil-enforcement action results in a property loss of some kind. The very nature of the action dictates as much. Nevertheless, that property is not "taken for public use" within the meaning of the Constitution. Accordingly, where a party objects only to the "infirmity of the process," no taking has been alleged." Id. at 832-33.
Additionally, the supreme court stated "it is immaterial that the city may have been mistaken regarding the actual safety of the complex" because "even assuming the city made a mistake, the owners' allegations would 'amount to nothing more than a claim of negligence on the part of the city, for which it is immune under the Texas Tort Claims Act.'" Id. at 833.
The supreme court concluded that because the owners "simply have not alleged a taking," the city retained its immunity from suit and dismissal for want of jurisdiction was proper. Id.