Eminent Domain and the Reasonable Probability of Rezoning: Why It Matters for a Property’s Highest and Best Use
“Landowners are constitutionally guaranteed just compensation when their property is taken for a public project. But the precise amount of just compensation is often an area of significant disagreement between landowners and the government entities taking their property. Just compensation is based on the fair market value of the property. And one dispute that can sometimes contribute to major differences in value between the landowner and the government comes down to a question of whether the property being acquired could be rezoned for other uses.
Under Colorado law, landowners are not necessarily limited to a value based on the current use of their property. Instead, the property is to be valued considering the most advantageous use or uses of the property. This is often referred to as the “highest and best use” of the property, which requires that the use is: (1) physically possible; (2) legally permissible; (3) financially feasible; and (4) maximally productive.”
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Faegre, Baker & Daniels. JD Supra 2 November 2018.