The term “eminent domain” refers to the power of the government to take private property and “condemn” it; i.e., convert it into public use. The Fifth Amendment to the U.S. Constitution provides that the government may only exercise this power if they provide “just compensation” to the property owner(s).
In Colorado, there are statutory procedures for condemning property. The government, i.e., the “condemning authority,” must act in good faith, and the taking of the property must be for a public purpose. In alignment with the Fifth Amendment, the owner of the property must be given just, or fair, compensation after due process is afforded.
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About Fair Compensation
“Fair compensation” is, of course, in the eye of the beholder. Disputes most commonly arise when a property owner feels that the property being condemned for public use is worth more than the condemning authority is offering. Fair compensation is determined by an almost equally ambiguous term, “fair market value.”
Fair market value, in its more common form of the value of property being sold on the open market, is relatively easy to determine. When you are selling your house, for example, you or your agent can look up “comps,” which are prices that similar houses that are similarly situated have recently sold for. By assembling and averaging out these comps, a fairly clear picture of the fair market value of your house can be determined.
In any event, the fair market value of your house is ultimately exactly whatever amount you can convince someone to pay you for it. However, in the case of eminent domain, in most cases, the property owner doesn’t want to sell the property at all, or he/she would have done so already. Therefore, a property owner can make a fairly common-sense argument that there is no amount of money he/she considers to be fair market value.
About Fair Compensation and Due Process Under Eminent Domain Law
Nonetheless, the fair market value of the property taken in Colorado eminent domain cases is determined by a commission of impartial landowners or a jury, at the landowner’s option. The condemning authorities must give notice of intent of taking to all persons with an interest in the property before initiating a condemnation lawsuit. The notice must include the landowner’s right to exchange appraisals, which the condemning authority must pay for in most cases.
The appraisals are exchanged, and the parties are required to engage in serious good faith negotiations. If no agreement can be reached, the condemning authority must make a final written offer, and a complaint is filed in court only after completion of the appraisal process.
If a complaint is filed, the owner may choose between a jury and a commission of impartial landowners to determine the value of the property being taken. The subsequent trial is generally standard procedure; the owner is entitled to issue subpoenas and conduct discovery before trial and may call witnesses, including expert witnesses, and cross-examine the condemning authority’s witnesses at trial. The owner also has a right to appeal if they lose and to reasonable attorneys’ fees if they win.
The value of the property is determined as of the date of the taking. If only part of the property is taken, the condemning authority must also compensate the landowners for damages to the remaining property under certain circumstances.
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