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Colorado's Eminent Domain Laws and Property Rights

Property Rights in the State of Colorado

Colorado property right protections are similar in many ways to the laws and constitutional provisions of other states.  It is more favorable than some states regarding the right to recover reasonable appraisal fees and other litigation costs regardless of the outcome of a condemnation case, as well as reasonable attorney fees where the condemnor improperly pursues a taking or where the property owner receives an award 30% higher than the last written offer made before filing a case.  Colorado statutes also place limitations on certain types of private condemnations, and Colorado law generally allows significant judicial review regarding the propriety of government condemnation attempts.  Colorado law also grants a property owner the unilateral right to elect whether to have just compensation determined by a jury or a three-person commission; requires a deposit to be made before taking possession of an owner’s property; and has more generous rights to interest on a condemnation award than many jurisdictions.

Both before, and also in response to the U. S. Supreme’s decision in Kelo, the Colorado General Assembly reexamined the state’s eminent domain laws and enacted legislation to prevent condemnations for private economic and tax revenue generating projects, to place greater restrictions on the ability to condemn for urban renewal purposes, to shift the burden of proof to the condemnor to prove that a public use exists, and several other landowner friendly changes.

On the other hand, Colorado is not as favorable as some states regarding other rights and protections.  For example, Colorado does not have a statute explicitly awarding attorney fees and other damages if a condemnor decides to abandon a condemnation project. Colorado also does not generally allow the recovery of business losses, and has deemed some damages non-compensable or made them more difficult to establish, such as loss of highway access or visibility, or damages caused by the project constructed on abutting lands.  Colorado law also allows a condemnor to offset “special benefits” against damages to the remainder and, for certain types of projects, up to 50% of the value of the property being taken.

Meet OCA's Colorado Attorney

Jack Sperber, CRE

Jack Sperber focuses his practice on eminent domain and real estate litigation representing, clients throughout Colorado. He has significant experience trying complex and high-value cases and has obtained many multi-million dollar awards and settlements on behalf of his landowner clients.

A SUMMARY OF COLORADO'S EMINENT DOMAIN LAWS

The following responses are intended to provide general information about eminent domain laws in the featured state. Such information does not constitute legal advice. Anyone interested in learning more about eminent domain law and the impact it may have on a given set of facts should consult with an OCA attorney or another attorney experienced in handling eminent domain cases.

  • Who Can Exercise Eminent Domain Powers?

    Colorado’s eminent domain statutes delegate the power to condemn property for certain purposes to a variety of governmental bodies and agencies and even some privately-owned entities. One of the most active condemning entities in Colorado is the Department of Transportation, but many cities and towns, counties, school districts, water and sanitation districts, special districts, urban renewal authorities, regulated utilities, and other entities also condemn property. For a comprehensive list of entities with the power of eminent domain, refer to C.R.S. § 38-1-202.

    Colorado’s Constitution also contains specific provisions concerning the exercise of the eminent power by home rule cities; private parties for certain limited purposes, such as private ways of necessity to construct roads to landlocked property; easements to convey water and a few others.

    Under Colorado law, there must be a statute or constitutional provision that delegates the power of eminent domain to the condemning entity, either expressly or by necessary implication. If there is doubt regarding whether an entity has the power to condemn, the power will not be recognized.

  • What Are the Legal Pre-Requisites for Exercising the Power?

    Colorado statutes set out the general process and procedure for exercising eminent domain powers, at C.R.S. § 38-1-101 and the following sections. There you will find laws requiring the government to take certain steps before it can condemn property, such as negotiating with the property owner. A condemnation action starts with the filing of a petition, although you will likely receive notice of the government’s plan for your property well in advance of that.

    Depending on the amount of money involved, a property owner may also be entitled to complete an appraisal at the government’s expense, pursuant to C.R.S. § 38-1-121, although whether to do so within the timelines of that statute depends upon strategic issues that may vary. Even if the owner does not submit an appraisal for reimbursement under the statute, he or she will likely still be entitled to reimbursement of such costs later, as part of a settlement or as part of reimbursement of costs at the end of a condemnation case.

    Colorado’s laws set out the process for the government to quickly obtain the right to use the property to begin construction of its project (called “immediate possession”) and for the property owner to receive just compensation for what is taken. In Colorado, many of the statutory laws regarding the power of eminent domain are also supplemented or expanded upon by case law, which is extensive.

    A property owner has the right to object to the petition and challenge the taking, as will be discussed in more detail below.

  • What Limitations or Defenses Exist?

    A condemning authority in Colorado must follow the correct process and have a proper public purpose for taking land from a private property owner. If the condemning entity does not properly follow that process and comply with all other legal requirements, a property owner may challenge the taking.

    Potential defenses to a taking include challenging: (i) the condemnor’s legal authority to take the property; (ii) the public purpose of the taking; (iii) the necessity of acquiring the specific property to be taken if bad faith or fraud can be shown; or (iv) the condemning authority’s failure to follow the correct process, such as negotiating in good faith. Depending upon the facts and eminent statutes involved, additional defenses may be available as well.

  • What Constitutes a Public Purpose?

    Like the U.S. Constitution, Colorado’s Constitution requires that private property be taken for a “public use.” Colorado courts apply a broad and flexible definition of the term “public use” that encompasses public benefit and advantage. Common public uses include roads, electrical transmission lines, public buildings, or other projects for the public good.

    Like many other states, Colorado reformed its eminent domain law both prior to and following the U.S. Supreme Court’s Kelo decision. As a result, “public use” does not include the taking of private property to transfer to a private entity for economic development or tax revenue enhancement. The reforms also shifted the burden from the landowner to the condemning body to prove that it is condemning property for a proper public use or purpose.

  • How is Just Compensation Determined?

    The U.S. and Colorado Constitutions both require that an owner be paid just compensation if their property is taken for a public project or other proper purpose. In Colorado, just compensation should put the landowner in the same economic position as though the taking had not happened. Colorado law generally measures just compensation by what the landowner lost, not by what the condemning entity gained.

    Just compensation under Colorado law is usually determined based upon the property’s “fair market value” (called “reasonable market value” under Colorado’s jury instructions). The value of the property is determined as of a specific time referred to as the “date of value.” Depending on the circumstances, the date of value is typically the earlier of the date a condemnor takes immediate possession, the date of a valuation trial, or a date the parties stipulate to.

    An owner is not limited to the value of the property based only upon its present use, but instead is entitled to compensation based on the property’s most advantageous, or “highest and best” use.

    Both the condemning authority and the landowner usually obtain an appraisal to determine the reasonable market value of the property and then use the appraisals to either negotiate a settlement or present evidence in a valuation trial to support their position.

    Under Colorado statutory law, a landowner may choose whether to have the final determination of just compensation made by the judge, a jury, or a three-person commission.

  • What About Recovering Damages to Remaining Property?

    Under Colorado law, just compensation includes the reduction in value to a landowner’s remaining property as a result of the taking.

    The standard formula for determining just compensation, including damages, under Colorado law is:

    Determine the overall value of the entire property.
    Determine the value of the property being taken as part of the entire property.
    Determine the value of the remaining property before the taking. Determine the value of the remaining property after the taking.
    The difference between items (3) and (4) will determine damages and/or specific benefits to the remainder.

    The landowner may experience other impacts because of the taking, but not all damages are recoverable under Colorado law. One example of such damages that may not be compensable are losses caused by minor changes to the property’s access. Generally, business losses are also not compensable. But even these limitations may depend on the circumstances and facts involved. For instance, damages may be available for changes in access if the trial court determines they result in a “substantial impairment of access,” as defined under Colorado case law. And an owner may be entitled to business losses if the business itself is being taken by the government.

  • Is the Landowner Entitled to Recover Reasonable Attorney Fees? Expert Fees? Litigation Costs?

    The Colorado Constitution supports the recoverability of a landowner’s litigation costs against the condemning entity, regardless of the outcome of condemnation litigation. Common recoverable costs include: appraisal and other expert fees, filing fees, court reporter and transcript fees, deposition costs, exhibit preparation, copying costs, and similar expenses. The landowner’s costs must be “reasonably incurred” as a result of the condemnation. Landowners have the burden of proving the reasonableness and recoverability of their fees and costs.

    If the condemnor takes immediate possession of the property and the ultimate just compensation is ultimately higher than the deposit made to take possession, the property owner may also be entitled to interest on the difference between the amount of the deposit and the ultimate award.

    In at least two specific situations, landowners are also entitled to reimbursement of their reasonable attorneys’ fees. The first is where the court decides that the government is not authorized to condemn the property. The second is where the amount awarded by the court for just compensation meets two requirements: (1) it is more than $10,000; and (2) it is at least 30% more than the last written offer the government made for the property before filing the condemnation case. This second situation applies to most, but not all, types of condemning entities because some are exempted from the statute.

    The court decides how much of the landowner’s attorneys’ fees, costs and interest are to be awarded at the end of the condemnation case.

  • Can the Government Take Possession of the Landowner's Property Before Final Compensation is Paid?

    A condemning authority may ask for the right to take early, physical possession of a landowner’s property before a final determination of just compensation so that it can start construction of its public project. This process is called “immediate possession.”

    Section 38-1-105(6)(a), C.R.S. generally governs requests for immediate possession. The statute requires the condemning authority to deposit money into the registry of the court to protect the owner’s right to receive full compensation. Unless the owner objects and seeks a greater deposit, this amount is usually the condemnor’s appraised value. If the court grants the condemning body the right to take early possession of the property, the owner may then petition the court to withdraw either a portion of or the entire deposited money. The parties then continue with litigation to determine the total just compensation that is owed for the taking and damaging of the owner’s property, either through settlement or a valuation trial before a commission, jury, or judge.

REFERENCES AND LINKS

Colorado

Faegre Drinker
1144 15th St., Suite 3400
Denver, CO 80202
Tel: (303) 607-3623 | Fax:(303) 607 3600
jack.sperber@faegredrinker.com  | www.faegrebd.com

Throughout his career, Jack Sperber has been involved in virtually every major public project in the state of Colorado, including highways, airports, light rail infrastructure, electric transmission lines, pipelines, and redevelopment projects. He also routinely counsels national corporations on condemnation issues affecting their business and real property interests in Colorado and around the country.

A frequent presenter on topics related to eminent domain and condemnation, Jack often speaks at continuing legal education seminars and before trade and business groups. Since its inception, he has co-chaired the American Law Institute’s Condemnation 101 course, a national seminar he helped create to instruct attorneys in the best practices for preparing and presenting an eminent domain case.

Speaking Engagements

A selection of Jack’s most recent presentations are listed below. For a list of his most recent presentations and published works, please visit here.

  • American Law Institute, Eminent Domain and Land Valuation Litigation, “How Jury Instructions Frame Your Case,” San Francisco, CA February 6, 2015.
  • American Law Institute, Condemnation 101, “Core Valuation Concepts,” San Francisco, CA, February 5, 2015.
  • American Law Institute, Eminent Domain and Land Valuation Litigation, “National Forum: A Discussion of Current National Issues Including the Proposal to Condemn Underwater Mortgages,” New Orleans, LA, January 25, 2015.
  • American Law Institute, Condemnation 101, “Finding the Key Differences in Your Case,” New Orleans, LA, February 24, 2014.
  • American Law Institute, Condemnation 101, “Preparation for an Order of Taking,” Miami Beach, FL, January 24, 2013.
  • American Law Institute, Condemnation 101, “How to Attack or Defend Comparable Sales,” Miami Beach, FL, January 24, 2013.
  • American Law Institute, Condemnation 101, “Effective Closing Arguments in Eminent Domain Cases,” Miami Beach, FL, January 24, 2013.
  • American Law Institute-American Bar Association, Condemnation 101, “Identifying the Key Differences in Your Case,” San Diego, CA, January 26, 2012.
  • American Law Institute-American Bar Association, Condemnation 101, “Practical Advice for Working with Experts (Appraisers and Other Predicate Witnesses to Value),” San Diego, CA, January 26, 2012.
  • American Law Institute-American Bar Association, Eminent Domain and Land Valuation Litigation, “A Clean Look at Dirty Property: Current Issues and Common Problems When Valuing Contaminated Property in Condemnation Proceedings,” Coral Gables, FL, February 18, 2011.
  • American Law Institute-American Bar Association, Condemnation 101, “Understanding the Three Approaches to Value: How Appraisers Use Them and What Lawyers Need To Know About Them,” Coral Gables, FL, February 17, 2011.

Publications

  • Annual Survey of Colorado Law, Co-Author, Eminent Domain Chapter, Colorado Bar Association, 2004-11.
  • Basic Valuation Concepts: Issues of Law and Fact That Frame the Valuation Debate, Lis Pendens, ABA Section of Litigation, Vol. 9, Issue 2, 2008.
  • Blazing a Trail: Condemning Private Ways of Necessity in the New West, Current Condemnation Law: Takings, Compensation and Benefits, Co-Author, American Bar Association, 2006.

Professional Affiliations

  • Designated Member, The Counselors of Real Estate®, www.cre.org, an international organization of real estate professionals recognized as the leading advisors in complex real property matters. Jack is among the fewer than 50 practicing attorneys who hold a CRE® designation.

Education

  • George Washington University Law School, J.D. (1992)
  • Adams State College, B.A. (1988)

Bar Admissions and Memberships

  • Colorado
  • U.S. District Court for the District of Colorado
  • U.S. Court of Appeals for the Tenth Circuit
  • American Bar Association

Honors and Awards

  • AV® Preeminent™ Peer Review Rated, Martindale-Hubbell®
  • The Best Lawyers in America®, Eminent Domain and Condemnation Law, 2008-2016
  • Best Lawyers®, Denver-area “Lawyer of the Year,” Eminent Domain and Condemnation Law, 2013
  • Super Lawyers, Eminent Domain, 2006-2015

Throughout his career, Jack Sperber has been involved in virtually every major public project in the state of Colorado, including highways, airports, light rail infrastructure, electric transmission lines, pipelines, and redevelopment projects. He also routinely counsels national corporations on condemnation issues affecting their business and real property interests in Colorado and around the country.

A frequent presenter on topics related to eminent domain and condemnation, Jack often speaks at continuing legal education seminars and before trade and business groups. Since its inception, he has co-chaired the American Law Institute’s Condemnation 101 course, a national seminar he helped create to instruct attorneys in the best practices for preparing and presenting an eminent domain case.

Speaking Engagements

A selection of Jack’s most recent presentations are listed below. For a list of his most recent presentations and published works, please visit here.

  • American Law Institute, Eminent Domain and Land Valuation Litigation, “How Jury Instructions Frame Your Case,” San Francisco, CA February 6, 2015.
  • American Law Institute, Condemnation 101, “Core Valuation Concepts,” San Francisco, CA, February 5, 2015.
  • American Law Institute, Eminent Domain and Land Valuation Litigation, “National Forum: A Discussion of Current National Issues Including the Proposal to Condemn Underwater Mortgages,” New Orleans, LA, January 25, 2015.
  • American Law Institute, Condemnation 101, “Finding the Key Differences in Your Case,” New Orleans, LA, February 24, 2014.
  • American Law Institute, Condemnation 101, “Preparation for an Order of Taking,” Miami Beach, FL, January 24, 2013.
  • American Law Institute, Condemnation 101, “How to Attack or Defend Comparable Sales,” Miami Beach, FL, January 24, 2013.
  • American Law Institute, Condemnation 101, “Effective Closing Arguments in Eminent Domain Cases,” Miami Beach, FL, January 24, 2013.
  • American Law Institute-American Bar Association, Condemnation 101, “Identifying the Key Differences in Your Case,” San Diego, CA, January 26, 2012.
  • American Law Institute-American Bar Association, Condemnation 101, “Practical Advice for Working with Experts (Appraisers and Other Predicate Witnesses to Value),” San Diego, CA, January 26, 2012.
  • American Law Institute-American Bar Association, Eminent Domain and Land Valuation Litigation, “A Clean Look at Dirty Property: Current Issues and Common Problems When Valuing Contaminated Property in Condemnation Proceedings,” Coral Gables, FL, February 18, 2011.
  • American Law Institute-American Bar Association, Condemnation 101, “Understanding the Three Approaches to Value: How Appraisers Use Them and What Lawyers Need To Know About Them,” Coral Gables, FL, February 17, 2011.

Publications

  • Annual Survey of Colorado Law, Co-Author, Eminent Domain Chapter, Colorado Bar Association, 2004-11.
  • Basic Valuation Concepts: Issues of Law and Fact That Frame the Valuation Debate, Lis Pendens, ABA Section of Litigation, Vol. 9, Issue 2, 2008.
  • Blazing a Trail: Condemning Private Ways of Necessity in the New West, Current Condemnation Law: Takings, Compensation and Benefits, Co-Author, American Bar Association, 2006.

Professional Affiliations

  • Designated Member, The Counselors of Real Estate®, www.cre.org, an international organization of real estate professionals recognized as the leading advisors in complex real property matters. Jack is among the fewer than 50 practicing attorneys who hold a CRE® designation.
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