On May 10, 2022, the Colorado Legislature passed SB22-208, titled “Concerning Just Compensation for the Condemnation of Property Encumbered by a Conservation Easement in Gross.” If signed, the bill ensures that if property encumbered by a conservation easement will be condemned, and the property will be acquired free and clear of the conservation easement interest, the condemning authority must value the property as if it is unencumbered by the conservation easement. The bill moves on to the governor’s desk for signing.
Conservation easements are real property interests under Colorado law with a fair market value that can be determined by an appraisal. When a property encumbered by a conservation easement is condemned, the conservation easement typically requires the proceeds received by the landowner to be split between the landowner and the holder of the conservation easement based on the proportion of value attributable to the conservation easement at the time the conservation easement is conveyed to the holder. The bill will require the condemning authority to pay the landowner fair market value for the property as if the property is free and clear of the conservation easement. The landowner will then split the proceeds of the condemnation with the holder in accordance with the terms of the conservation easement. It is important to note that if the conservation easement interest is not being condemned, the rule set forth in the bill will not apply, and the property will be valued as if the conservation easement is in place. The bill codifies the common practice of condemning authorities to award full compensation to landowners and holders of conservation easements.
Congratulations to Keep It Colorado on its quick action and determination in getting this bill to the governor’s desk!