In any condemnation proceeding in which there is a partial taking of property, the measure of compensation and damages resulting from the taking shall be the difference between the fair market value of the entire property immediately before the taking and the fair market value of the property remaining immediately after the taking. In determining such difference, all elements which would enhance or diminish the fair market value before and after the taking shall be considered even though some of the damages sustained by the remaining property, in themselves, might otherwise be deemed noncompensable. Further, in determining such values or differences therein, elements which would enhance or benefit any property not taken shall only be considered for the purpose of offsetting any damages or diminution of value to the property not taken.
History: 1978 Comp., § 42A-1-26, enacted by Laws 1981, ch. 125, § 22.
ANNOTATIONSNo constitutional violations. — All arguments to the effect that the predecessor to this section denies equal protection of the law, is vague, indefinite and uncertain, amounts to an unauthorized donation and is violative of the constitutional requirement of separation of the powers of government are specious and fail to find support in the law. State ex rel. State Hwy. Comm'n v. Hesselden Inv. Co., 1972-NMSC-071, 84 N.M. 424, 504 P.2d 634.
Purpose of section. — The language of this section codifies the correct and existing rule or measure of damages in cases of a partial taking, in harmony and compliance with the payment of just compensation for the taking of private property as required by N.M. Const., art. II, § 20. State ex rel. State Hwy. Comm'n v. Hesselden Inv. Co., 1972-NMSC-071, 84 N.M. 424, 504 P.2d 634.
Date of taking. — Clearly and logically the date of taking, whether partial or whole, was the date on which the condemnor became vested with the legal right to possession, dominion and control over the real estate being condemned. State ex rel. State Hwy. Dep't v. Yurcic, 1973-NMSC-059, 85 N.M. 220, 511 P.2d 546; State ex rel. State Hwy. Comm'n v. Hesselden Inv. Co., 1972-NMSC-071, 84 N.M. 424, 504 P.2d 634.
Reason for fixing date of taking. — The reason that most eminent domain statutes fix the time as of which property taken or damaged is to be valued is that values of real estate are not constant and sometimes change greatly before proceedings are completed. The reasoning which compels this rule is not applicable to the nonfluctuating rule or measure of damages in a condemnation case and furnishes no basis for equating the valuation date with the date of taking. State ex rel. State Hwy. Comm'n v. Hesselden Inv. Co., 1972-NMSC-071, 84 N.M. 424, 504 P.2d 634.
Valuation of property after taking. — Where part of a tract of land has been taken, the question is how much less is the tract as a whole worth with the piece taken out of it than it was worth before the taking? In determining the value of the property after the taking, the tribunal assessing the damages must take into consideration every element which a purchaser willing but not obliged to buy would consider, and separate items may be considered not as specific items of loss, but merely with respect to their effect upon the market value. Board of Trustees v. B.J. Serv., Inc., 1965-NMSC-109, 75 N.M. 459, 406 P.2d 171.
In a proceeding to condemn part of a tract of land, the rule that the part taken should be valued as part of the whole does not mean that it must be valued according to its proportional value of the whole by multiplying the number of square feet therein by the square foot value of the entire tract. In assessing value of the part taken, the trier of facts must consider the part's value arising from its availability for use in conjunction with the part not taken, and any increased value inhering in the part taken as a part of the larger tract must be reflected in the award to the owners. Transwestern Pipe Line Co. v. Yandell, 1961-NMSC-173, 69 N.M. 448, 367 P.2d 938.
To value the entire tract before the taking and reduce that value to a square footage price tag and then use that price tag to determine the value of land remaining after the partial taking is to beg the question. It is only by considering the difference between the value of the entire tract before the taking and the value of the remainder after the taking through separate and independent valuations that the presence or absence and the extent of damages or benefits or both are determined. Transwestern Pipe Line Co. v. Yandell, 1961-NMSC-173, 69 N.M. 448, 367 P.2d 938.
The evidence of the market value per acre of the whole tract before the taking, employed as a basis in determining the value of the easement, does not, then, appear to represent the "full fee value" of the easement areas separated from the entire tracts. Transwestern Pipe Line Co. v. Yandell, 1961-NMSC-173, 69 N.M. 448, 367 P.2d 938.
When there is not substantial evidence to demonstrate that the property has been diminished in fair market value by reason of a partial taking, the "before and after" rule loses its relevancy and the proper alternative measure of compensation would be the fair market value of the property actually taken. Yates Petroleum Corp. v. Kennedy, 1989-NMSC-039, 108 N.M. 564, 775 P.2d 1281.
When a portion of a company's parcel of property was condemned for construction of an access road from a frontage road to a landfill, both of which were already city-owned property, the company was not entitled to compensation for any reduction in the value of the uncondemned portion of its parcel resulting from the proximity of the landfill and the increased traffic on the frontage road. City of Albuquerque v. Westland Dev. Co., 1995-NMCA-136, 121 N.M. 144, 909 P.2d 25, cert. denied, 120 N.M. 828, 907 P.2d 1009, and cert. denied, 517 U.S. 1244, 116 S. Ct. 2499, 135 L. Ed. 2d 190 (1996).
Enhancement of property value by condemnation. — If the remaining land is enhanced in value as a result of the project requiring the condemnation, that enhancement can only be used to offset damages to the value of the remaining property. Yates Petroleum Corp. v. Kennedy, 1989-NMSC-039, 108 N.M. 564, 775 P.2d 1281.
Value determined by highest and best uses. — The value of the property is determined by considering not merely the uses to which it was applied at the time of condemnation, but the highest and best uses to which it could be put. City of Clovis v. Ware, 1981-NMSC-076, 96 N.M. 479, 632 P.2d 356.
Two parcels of land may be deemed one tract for the purpose of condemnation when they are contiguous or in near proximity and are united in use and ownership, even though the parcels are separated by a drainage channel. State ex rel. State Hwy. Dep't v. Strosnider, 1987-NMCA-136, 106 N.M. 608, 747 P.2d 254.
Diminution of value where sewage facility placed on condemned tract. — Where expert testimony is introduced into evidence showing that placement of a sewage facility on the condemned portion of a tract, regardless of whether noxious odors come from the facility, will diminish the value of the remaining land, the trial court must consider any resultant diminution in the fair market value of the remaining property. City of Clovis v. Ware, 1981-NMSC-076, 96 N.M. 479, 632 P.2d 356.
When "after" value less than "before" value. — When only a portion of the condemnee's property is actually taken, ascertainment of the fair market value of the entire property immediately before the taking and the fair market value of that remaining immediately after the taking is required and if the "after" value be less than "before" value, then this difference is the damage to which the condemnee is entitled. Roosevelt Cnty. Elec. Coop. v. Bowley, 1967-NMSC-121, 78 N.M. 9, 427 P.2d 894.
Improvement costs considered. — It is proper to consider the cost of improvements for restoration purposes and relocation costs as helpful aids in determining the difference in the before and after values of the property. However, such prospective expenditures are not, themselves, proper elements of damage. Board of Trustees v. B.J. Serv., Inc., 1965-NMSC-109, 75 N.M. 459, 406 P.2d 171.
Application of rule where loss of irrigation water. — The well-established measure of damages in eminent domain in this jurisdiction is the before and after rule, by which the owner is entitled to recover, as compensation, the amount by which the fair market value of his property has been depreciated by the taking and although the loss of irrigation water is not, in itself, a proper element of damage, the loss of trees, grass, shrubbery and other vegetation caused by the disruption of the water supply is a factor in the determination of the value of the property after the taking. Board of Trustees v. Spencer, 1965-NMSC-159, 75 N.M. 636, 409 P.2d 269.
Unity rule. — The unity rule is applied to ascertain whether two or more parcels of property constitute a single larger tract for the purpose of calculating the fair market value of the property taken or the severance damages to the remaining land that is not subject to condemnation. To apply the unity rule, generally the following three facts should be present: physical contiguity, unity of use, and unity of ownership. The combined presence of all three factors, however, is not a prerequisite to the rule's application. Yates Petroleum Corp. v. Kennedy, 1989-NMSC-039, 108 N.M. 564, 775 P.2d 1281.
Generally, damages not recoverable due to loss of business. — A condemnee may not recover damages by way of expenses or loss of business for temporary inconvenience, annoyance or interference with access occasioned by construction, unless the period of construction was unduly long or the conduct of the condemnor causing the loss was unreasonable, arbitrary or capricious, and where there was no evidence which would warrant a finding that the period of construction was unduly long or that the contractor or highway department acted unreasonably, arbitrarily or capriciously in accomplishing the construction, the evidence as to loss or damage by reason of construction itself merited no legal recognition, and should not have been admitted. State ex rel. State Hwy. Dep't v. Kistler-Collister Co., 1975-NMSC-039, 88 N.M. 221, 539 P.2d 611.
Or for mere frustration of future plans. — Mere frustration of the owner's hopes or plans for the future is a noncompensable element of damages. However, compensation for frustration of future hopes or plans is not the same as compensation based on planned future uses for which the property is adaptable. State ex rel. State Hwy. Dep't v. Kistler-Collister Co., 1975-NMSC-039, 88 N.M. 221, 539 P.2d 611.
Lost rents as damages. — In a condemnation proceeding brought by the city of Albuquerque (city) to acquire a thirty-foot wide strip of land to build a road on property operated as a freight truck terminal, and where the property owner asserted, in part, that the city's condemnation actions proximately caused a property tenant not to renew its lease with the property owner, resulting in consequential damages, the district court erred in granting the city of Albuquerque's motion for summary judgment on the claim for damages based on its ruling that the value of the tenant's lease is not a compensable element of damage for a partial taking, because a property owner is constitutionally entitled to fair market value that occurs before the condemnation action is actually filed and the property actually taken when the condemning authority has, prior to instituting formal condemnation proceedings, evidenced an unequivocal intention to take the specific parcel of land, and the condemning authority's communication of its intention to third parties or the public in general substantially impacts the fair market value of the property. City of Albuquerque v. SMP Properties, 2019-NMCA-004, cert. granted.
Damages for land taken by utility held improper. — Award of damages to owners of land partially taken by public utility based on the before and after values by giving damages for the acreage taken, plus damages to the lands not taken under the guise of per utility pole location is improper. Roosevelt Cnty. Elec. Coop. v. Bowley, 1967-NMSC-121, 78 N.M. 9, 427 P.2d 894.
When proceedings abandoned, no incidental damages. — A county can unilaterally abandon condemnation proceedings following the entry of a permanent order of entry (in fact, anytime before the entry of a final judgment confirming the compensation award), subject to paying compensation for the temporary taking that occurred and other expenses necessary to do equity. In assessing these damages and expenses, however, the court should not award any damages for any reduction in value to the property based solely on its relocation. Because there is no permanent taking of property, the owner has no right to any incidental damages to what would have otherwise been the remainder of the property. County of Bernalillo v. Morris, 1994-NMCA-038, 117 N.M. 398, 872 P.2d 371.
Scope of presentation to jury. — In a condemnation suit it was proper for the jury in fixing damages to consider the property owner's plans for the development of its property. However, the jury was entitled to have presented to it for its consideration alternate plans for the further development of the property for commercial purposes, as well as evidence of other uses for which it was suitable or adaptable, in determining the before and after fair market value of the property, the development of the property for commercial purposes not being limited to the owner's plans for such development. State ex rel. State Hwy. Dep't v. Kistler-Collister Co., 1975-NMSC-039, 88 N.M. 221, 539 P.2d 611.
Law reviews. — For article, "Solar Rights and Their Effect on Solar Heating and Cooling," see 16 Nat. Resources J. 363 (1976).
For annual survey of New Mexico law relating to property, see 13 N.M.L. Rev. 435 (1983).
For note, "Property Law Property Owners in Condemnation Actions May Receive Compensation for Diminution in Value to their Property Caused by Public Perception: City of Santa Fe v. Komis," see 24 N.M. L. Rev. 535 (1994).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 26 Am. Jur. 2d Eminent Domain §§ 273, 274, 275, 276, 277, 347; 27 Am. Jur. 2d Eminent Domain §§ 511, 512.
Rights in condemnation award where land taken was subject to possible rights of reverter or re-entry, 81 A.L.R.2d 568.
Distribution as between life tenant and remainderman of proceeds of condemned property, 91 A.L.R.2d 963.
Eminent domain: measure and elements of damages or compensation for condemnation of public transportation system, 35 A.L.R.4th 1263.
Eminent domain: unity or contiguity of separate properties sufficient to allow damages for diminished value of parcel remaining after taking of other parcel, 59 A.L.R.4th 308.
Eminent domain: compensability of loss of visibility of owner's property, 7 A.L.R.5th 113.
29A C.J.S. Eminent Domain §§ 147, 148, 191.