Changes to Colorado's Vested Property Rights Law

• Jurisdiction: Colorado,United States
• Citation: Vol. 28 No. 7 Pg. 83
• Pages: 83
• Publication year: 1999

28 Colo.Law. 83 Colorado Lawyer 1999.

1999, July, Pg. 83. Changes to Colorado's Vested Property Rights Law

---

83

Vol. 28, No. 7, Pg. 83

The Colorado Lawyer
July 1999
Vol. 28, No. 7 [Page 83]

Specialty Law Columns
Government and Administrative Law News
Changes to Colorado's Vested Property Rights Law
by Claire B. Levy

This legislative session, Colorado's vested property rights law, CRS § 24-68-101 et seq., received its first major overhaul since 1987, when the law was enacted. The path from the first bill draft to its final language was full of twists, turns, bumps, and stumbles. What finally emerged as House Bill ("H.B.") 1280 represents a true compromise between the interests of Colorado's homebuilders and local governments

Background

The common law affords landowners a vested right to complete improvements to their property, notwithstanding subsequent changes in laws or regulations, if they have taken substantial steps in reliance on a valid building permit.1 Under the common law, a landowner could expend substantial funds obtaining a zoning change on his or her property and obtaining approval of development plans, only to have the regulations change before development could begin. This situation led to enactment of statutory protection that vested the right to develop land for a three-year period after the local government with land use authority approved a "site specific development plan."2

The law enacted in 1987 provided a broad definition of a "site specific development plan" and permitted local governments to designate the particular land use approval process or document that would trigger a vested right.3 Many local governments perceived the law to require them either to designate a site specific development plan or provide vested rights through a development agreement. If that failed to happen, members of the development community assumed that a vested right would be established automatically on approval by a local government of any plan that met the definition of a site specific development plan

On closer reading of the law, it became apparent that the law did not require a local government to establish a vested rights process, and that if such a process was not established, the law was not self-executing. This conclusion follows from the definition of a site specific development plan, which requires an ordinance, regulation, or agreement in order to trigger a vested right, and from the requirement that the local government publish a separate notice of the establishment of a vested right.4 Therefore, landowners in some jurisdictions found that they still had no more protection than was afforded by the common law vested rights doctrine

Allowing the local government to designate the plan or process that would trigger a vested right did not protect landowners from regulatory changes between the time the local government rezoned the land or approved a preliminary plan and the time it approved a site specific development plan. This caused frustration among developers who had expended time and money to develop detailed development plans based on previously approved zoning or sketch plans.

The vested property rights law allowed action by a local government or pursuant to an initiated measure that impaired a vested right on several conditions, one of which was that the affected landowner receives just compensation for all costs, expenses, and liabilities incurred after approval of the site specific development plan.5 The allowed compensation excluded any diminution in the value of the property caused by the impairment.

This provision proved to be costly for Weld County when the voters approved a referendum to require separate voter approval for a pre-parole facility after Weld County had established a vested right to construct the facility.6 The court found that the referendum impaired the landowner's vested right and ordered compensation. This result was unsatisfactory to both parties. Weld County was forced to pay the damages caused by a voter-approved measure, and the landowner only was able to receive compensation for the costs they incurred after approval of the site specific development plan.

Initial Drafts of H.B...