What to Do When Facing a Government Taking: FAQs on Colorado Eminent Domain

You received a notice of intent or an offer to acquire your property from the government or a 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 eminent domain or condemnation proceeding.

What Happens in an Eminent Domain or Condemnation Proceeding?

It begins with the condemning authority sending a notice of intent or an offer to acquire your property. Then, you can get an independent appraisal. At that point, you can make a strategic decision whether to share the appraisal and negotiate with the condemning authority, or wait until the condemning authority files a court case for condemnation.

Once the condemning authority files the case, there are two phases of court proceedings, the “Immediate Possession” phase and the “Valuation Trial.” For more detailed information about the phases of an eminent domain proceeding in Colorado, read the companion alert, “Phases of an Eminent Domain Proceeding in Colorado.”

Most attorneys do not have experience with eminent domain proceedings, and although there are some similarities to other civil trials, the procedures are different. For this reason, if engaging legal counsel, it can be very helpful to retain an experienced eminent domain attorney.

Can the Government Just Take My Property?

Most of the time. 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 take (condemn) private property for a public use without the owner’s consent. But although these entities may have the power to generally condemn property, whether they are exercising that power appropriately in your specific case requires a careful analysis of fact and law.

Even if the condemning authority is legally allowed to take your property, you still have rights. Under both the U.S. and Colorado Constitutions, the condemning authority must pay the property owner “just compensation,” meaning the fair market value of the property.

Can Private Companies Take My Property?

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, 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. Again, however, even if these companies have statutory authority to condemn, they need to follow the rules in each specific proceeding. An eminent domain attorney can help you understand whether the private company is operating within the law and if it is worth challenging the condemnation.

Can I Stop a Government Entity or Private Company From Taking My Property?

It’s unusual to stop a condemnation outright. 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. Although the condemning authority may offer you less value than your property is worth, you can negotiate. See the section below on “How Is the Value of My Property Determined?”

The Government Wants “Immediate Possession” of My Property — What Does That Mean?

If you and the condemning authority cannot reach a deal for selling your property, then the condemning authority can ask the court 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 (before the court determines the value of your property).

The court will set a hearing to consider whether granting immediate possession is appropriate in your case, and you must raise all legal challenges to the condemnation at that hearing. At this point, it may be appropriate to challenge the timing of the condemnation as well. The condemning authority must deposit its estimate of just compensation with the court in order to obtain immediate possession of your property. The date of immediate possession (that is, the date that the title of the property transfers from you to the condemning authority) is usually the date used to determine the fair market value of the property.

Can the Condemning Authority Take Only Part of My Property?

Yes, 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 (rather than an ownership interest) permitting it to put a telephone line across your property. 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 by the taking.

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 decided not by how the property is currently used, but by how it could be used, something called the “highest and best use.” To determine reasonable market value, Colorado courts may use several approaches to valuation. They may compare the property against recent prices paid for the sale of similar properties or rental amounts for the lease of similar properties. They may also consider the income the property brings in or the cost to replace the buildings and other improvements on the property. Courts may combine these approaches, depending on the property. The more unique the property, the more difficult it is to value, and therefore, the more unique valuation methods may be required.

How Long Will It Take for Me to Get Paid for My Property?

If you can reach an agreement with the condemning authority, 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 condemning authority is granted immediate 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 typically does not have the experience and expertise necessary to prepare an appraisal that can be used in an eminent domain case. It is very important to hire an appraiser with eminent domain experience. An attorney experienced in eminent domain matters can help you find an appraiser who knows how to apply eminent domain standards and rules or can help guide a general real estate appraiser.

Do I Have to Pay for an Appraisal?

No; if the estimated value of your property is over $5,000, the condemning authority must reimburse you for the reasonable costs of the appraisal in addition to any award for the value of your property. 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 get paid for 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 attorney’s 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 for your property is $100,000. If you ultimately show that your property is worth more than $130,000, you may be reimbursed for your attorney’s 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? Will you suffer other damages beyond the value of the property itself? Do you need help to evaluate whether the offer is fair? You have a limited time to act.

If you and the condemning authority 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 attorneys do not have experience with these specialized proceedings. It can be very helpful to retain an experienced eminent domain lawyer early to help you understand your rights and get the most compensation for your valuable property.