You received a Notice of Intent from the government or private company seeking to take your property. You probably have a lot of questions. Read on for answers to common questions and tips on how to protect your rights during a Colorado condemnation or eminent domain proceeding.
What Happens in an Eminent Domain or Condemnation Proceeding?
It begins with the condemning authority sending a Notice of Intent. Then, the landowner usually gets an appraisal and can negotiate with the condemning authority. If the parties cannot reach a deal, then there are two stages of court procedures, the “Immediate Possession” phase and the “Valuation Trial.” Most lawyers do not have experience with eminent domain proceedings, and although there are some similarities, the procedures are different from other civil trials. For more information about the stages of an eminent domain proceeding in Colorado, read our alert.
Can the Government Just Take my Property?
Generally, yes. The State of Colorado, a local government (like a city or municipality), a governmental agency like the Colorado Department of Transportation, a special district, and sometimes even a private company can use the power of eminent domain to condemn (take) private property without the owner’s consent for a public use. There are some circumstances in which there are valid reasons to challenge a proposed taking, but those instances are relatively infrequent.
Even if the government has the authority to take your property, you still have rights. Under both the U.S. and Colorado Constitutions, the condemning authority must pay the property owner the fair market value of the property, or “just compensation.”
Can Private Companies Take my Property?
Yes, private companies that provide services such as transportation, utilities, or communications can be granted the authority by the Colorado government to condemn private property for a public purpose. This authority may come from a statute passed by the General Assembly and signed by the Governor, or a government agency may specifically give a company permission to take property. Some common examples of private companies that have the power of eminent domain include telephone, power, pipeline and gas companies.
Can I Stop Any Government Entity or Private Company From Taking my Property?
Unfortunately, it’s unusual to stop a condemnation. There are defenses you can raise, but a condemning authority often has the right to take property if it is for a public purpose, such as the construction of public roads, parks, schools or utilities. Generally, unless your property is being taken for something that is not a public purpose or there are special circumstances, it is difficult to stop a condemnation altogether.
Can I Negotiate With the Condemning Authority?
Yes, most condemnation proceedings do not go all the way to trial. Instead, you can negotiate with the condemning authority. Although the government may try its best to value your property properly, it may offer you less than your property is worth. See below for how your property is valued.
The Government Wants “Immediate Possession” of my Property — What Does That Mean?
If you and the government cannot reach a deal to sell your property, then the condemning authority can ask for immediate possession even before the value of the property is determined. This allows the condemning authority to start building its public project or otherwise start using your property early in the case, if the court decides that it should happen. The date of immediate possession (that is, the date that the title of the property transfers from you to the government) is usually the date used to determine the fair market value of the property.
Can the Condemning Authority Take Only Part of my Property?
It is common to have only part of a property be condemned. For example, when the Colorado Department of Transportation is seeking to expand a road, it may take a strip of your parcel closest to the existing street. Or a telephone company may take only an easement permitting it to put a telephone line across your property, rather than an ownership interest. Valuing these partial takes can be tricky. In addition to the value of the property taken, you may be able to recover damages caused to your remaining property.
How Is the Value of my Property Determined?
Just compensation is determined by the reasonable market value as of the date of the taking. Sometimes, the reasonable market value is not decided by how the property is currently used, but how it could be used, something called the “highest and best use.” Typically, property value is determined by comparing against recent sales of other similar properties. Sometimes, especially in the context of commercial real estate, it is not possible to use other properties to value your property because it is unique. Then other methods of valuation may be used, such as the income the property brings in or the cost to replace the buildings and other improvements on the property.
How Long Will It Take for Me To Get Paid for my Property?
If you can reach an agreement with the government, then you will receive payment relatively quickly. If you do not come to a deal, then you may receive part of your payment when the government takes possession of your property. At that point, the condemning authority will make a deposit into the court. You may be able to withdraw that deposit before the end of the eminent domain proceeding. You are not locked into the value of the deposit. If you ultimately show the court that your property is worth more than the deposit you already received, the remainder of just compensation will be awarded at the end of the valuation trial. Although it is rare, if the property is shown to be worth less than the deposit, you will have to pay back the difference between the value of the property and the deposit that you withdrew.
What Is the Role of an Appraiser in a Condemnation Proceeding, and How Do I Find One?
To establish the value of your property, you will need to get an appraisal. A general appraiser who appraises properties for a mortgage may not have the experience and expertise necessary to prepare an appraisal that can be used in an eminent domain case. Instead, you may need an appraiser who specializes in providing expert opinions in eminent domain cases. An attorney experienced in eminent domain/condemnation matters can help you find an appraiser who knows how to apply eminent domain standards and rules.
Do I Have To Pay for an Appraisal?
No, if the estimated value of your property is over $5,000, the condemning authority must pay for the reasonable costs of the appraisal. It is important to note that though a property may be worth more than $5,000, if the government is taking only a part of your property, like an easement or a small portion of the property itself, the value of what is taken may be less than $5,000.
Keep in mind that you can only be reimbursed for the cost of one appraisal on one parcel of property. If there are joint owners, they may work together to get one appraisal.
Can I Recover Money for Anything Other Than the Value of my Property?
Yes. You may also be able to recover reasonable appraisal fees, expert witness fees and the costs incurred as a result of the condemnation. If only a part of the property is taken, you may be able to recover damages to the remaining property, if there are any. Make sure to keep any documents that relate to any costs or losses from the condemnation.
In Colorado, you can sometimes also recover your reasonable attorneys’ fees if the final award of just compensation is at least $10,000 and 30% more than the last offer the condemning authority provided before the court proceedings (the number in the “final offer” or, if there was only one letter, the “notice of intent”). For example, imagine the final offer from the government is $100,000 for your property. If you ultimately show that your property is worth more than $130,000, you may be reimbursed for your attorney fees.
Conclusion: Timely Action Is Critical
When you’ve received a Notice of Intent from a government agency or a private company, you should take action. Do you agree with the government’s assessment of the value of your property? If not, you have a limited time to get an appraisal and negotiate. If you cannot come to an agreement about the value of the property, you will end up in a specialized proceeding that ends in a trial. Most lawyers do not have experience with these specialized proceedings. It can be very helpful to retain an experienced eminent domain lawyer to help you understand your rights and get the most compensation for your valuable property.