Colorado Real Estate Journal -
In eminent domain, there are essentially two types of takings: One known as an entire taking, whereby the entire property is acquired in fee, and the second known as a partial taking, whereby a portion of a property, either in fee or permanent easement, is acquired. In the case of a partial taking, there is a remainder parcel, sometimes referred to as the “residue.” Appraisers are required to consider not only the value of the portion of property and improvements being acquired, but also the impact that the partial taking will have on the remainder parcel, including any improvements. There can be a negative impact on the remainder parcel, often referred to as “damages to the remainder,” which can be either curable or incurable, or a positive impact on the remainder, known as a “special benefit to the remainder.” In general, damages are not always present in partial takings and, in many instances when they are, the damage can be cured for less than the monetary amount of the damage impact. If damages are present, property owners are entitled to receive the lesser of the damage amount or the cost to cure the damage. Special benefits to the remainder arising from the project are much less common since they must be specific in their benefit to the subject property as opposed to general to the community in the project area. In either instance, damages or special benefits to the remainder must be supported and shown to cause a measurable decrease or increase to the reasonable market value of the remainder parcel. While 100 percent of the damage or cost to cure can be applied to the remainder, special benefits can be used to offset damages to the remainder and the taking, but only up to 50 percent of the value of the property taken. Furthermore in Colorado, any damages being considered must be compensable under the law. Many times property owners have a list of impacts they would like to have considered by their appraiser. Common concerns include impacts resulting from the closure of an entrance driveway, loss of turning access, loss of parking spaces, increased noise, decreased rents, increased vacancies and change to, or delay of, development plans. Property owners often will inquire about negative impacts to their property during the time period preceding the actual taking. While damages considered speculative or remote would not be permitted, a change in the highest and best use of a property whereby the remainder parcel has an inferior use could be considered. In all of these cases, it is best to consult with legal counsel to determine which, if any, of a property owner’s concerns are compensable under law. If any of the impacts are determined to be compensable, they must be proven by the appraiser.
Cost to cure is typically associated with the cost of curing a deficiency to the remainder property. Replacing site improvements that are necessary to recreate a functional property after the partial taking or, in some extreme cases, where a portion of a structure is removed and requires closure and reconfiguration of the remaining structure, are common examples. In either of these circumstances, the cost to cure or repair these conditions to the remainder is often less than the loss in value to the remainder caused by not curing the deficiency. In Colorado, every appraisal for an eminent domain partial taking will consider whether there are any damages to the remainder and, if so, can they be cured for less than the monetary amount of the damage. Specific benefits to the remainder will also be considered, but are a much less common in cases of partial takings.