Representing the Landowner in Condemnation Cases
| Publication year | 1994 |
| Pages | 1103 |
| Citation | Vol. 23 No. 5 Pg. 1103 |
1994, May, Pg. 1103. Representing the Landowner in Condemnation Cases
The landowner owns property subject to the government's inherent condemnation powers.(fn1) Article II, § 15 of the Colorado Constitution and the Fifth Amendment of the U.S. Constitution provide the most significant limitation against these powers---the landowner's right to just compensation. In representing the landowner, an attorney's principal objective is to maximize the award of just compensation for the client.
This article provides practical advice about achieving that objective. It addresses only condemnation under state law in the context of a total taking. It does not address federal condemnation or a partial taking where there may be a claim for damages to remainder land.
Through the Colorado Constitution and statutes, eminent domain powers have been delegated to a wide range of governmental and quasi-governmental bodies. For example, home rule cities, state universities, urban renewal authorities and even the Baseball Stadium District all may exercise condemnation powers.(fn2) A condemnation is an in rem action against the property.(fn3) As the petitioner, the condemning authority institutes the action. It must name the landowner and all other interested parties of record as respondents.(fn4)
The attorney representing the landowner must be familiar with the fundamental principles of condemnation valuation. Colorado follows the undivided basis rule, which requires that the condemned property be valued as a whole, without regard to the separate interests within it.(fn5) Thus, all respondents share the common objective to obtain as much just compensation as possible in the valuation phase. The larger the award, the more there is to distribute among the respondents. After value is determined, the landowner and other interested parties become adversarial, with each competing for a share of the award.(fn6) This is the distribution phase.
Colorado also adheres to the unit rule, which mandates that all natural resources and appurtenant rights in the property be valued as a whole.(fn7) The courts draw an important distinction between the measure of market value and the evidence admissible to prove it. The award of just compensation cannot assign separate values to component parts of the property. In other words, one value cannot be given to the land, another value to the water rights, and another value to the mineral rights.
However, to demonstrate how the value of the property as a whole is enhanced by the natural asset, evidence can be introduced of its separate value.(fn8) The distinction is a tricky one. It generated considerable controversy, for instance, in the new Denver International Airport condemnations, where the landowners introduced evidence of the separate value of the groundwater beneath the land. Over strong objection by the City of Denver, landowners placed into evidence large values for the groundwater to establish how it contributed significantly to the overall value of their property. The evidence generally resulted in awards recognizing the contributory value of the groundwater.(fn9)
Market value must be awarded to indemnify fully the landowner for the loss.(fn10) Colorado Jury Instruction 36:3 defines market value as:
[T]he price the property could have been sold for on the open market under the usual and ordinary circumstances, that is, under those circumstances where the owner was willing to sell and the purchaser was willing to buy, but neither was under an obligation to do so.
In determining fair market value, several condemnation principles come into play. First, the property is valued under the highest and best use, which can be its present use or a reasonably probable future use.(fn11) For example, raw agricultural land may be valued as development property if the landowner establishes the reasonable probability of a future development use. Second, influence by the project on the value is excluded. An increase
in value because of the new development or a decrease in value because the threat of condemnation lingers over the area are not considered.(fn12) Third, listings and offers for the property or condemnation sales of similar properties are not admissible for value.(fn13) Finally, the property is valued...
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