Texas has long adhered to the “Property Owner Rule,” permitting property owners to testify as to the value of their property. Recent cases have emphasized that the testimony must relate to market value, rather than intrinsic or other value.
In Natural Gas Pipeline Co. of America v. Justiss, the Texas Supreme Court clarified that the Property Owner Rule only serves to relieve the property owner of the need to retain a qualified expert. In effect, each owner is deemed a qualified expert as to his or her own property. Critically, however, all other requirements of admissibility of opinion testimony remain in effect. The property owner must show that the testimony is grounded in the facts of the market and is not speculative or conclusory.
The Supreme Court held that the property owners before it—who were bringing a permanent nuisance suit against a malodorous gas plant—did not adequately explain the factual basis of their testimony regarding reduction in value. Rather than render judgment for the defendant, the Supreme Court remanded the action to the trial court, explaining that its prior case may have misled the property owners into believing their testimony was sufficient.
Many Texas practitioners have assumed that the valuation testimony of a property owner is per se admissible. The Justiss case provides a pointed reminder that even a property owner must show some kind of appropriate methodology to testify about the value of property.