Supreme Court Clarifies Requirements for Residential Land

Decision in three cases could help resolve hundreds of property tax disputes

Colorado Supreme Court
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The Colorado Supreme Court on Feb. 18 ruled on a trio of property tax cases that, in the words of the court, help “unravel the mysteries of what constitutes ‘residential land’” under state law. The high court’s conclusions are expected to provide much-needed clarity and will help clear hundreds of pending petitions from landowners looking to lower their tax burden.

The three cases from Summit County were chosen from nearly 300 similar disputes pending before the state’s Board of Assessment Appeals. They all involve landowners — the Mooks, the Hogans and Karen Kelly — who wish to reclassify their vacant parcels as residential land, which is taxed at an assessment rate of 7.15% versus 29% for vacant land. 


In its decision, the court interpreted a state statute that defines residential land as “a parcel or contiguous parcels of land under common ownership upon which residential improvements are located and that is used as a unit in conjunction with the residential improvements located thereon.” 

The court came to three conclusions. In Mook, it found that two parcels of land must touch to be considered “contiguous.” In Hogan, the court held that a residential improvement isn’t necessary on every contiguous and commonly owned parcel in order to meet the “used as a unit” requirement.  Finally, in Kelly, it found that county records determine “common ownership.”

Frank Celico, formerly of the Summit County Attorney’s office, argued the cases in court on behalf of the county’s Board of County Commissioners. He said the Supreme Court’s decision “provided bright-line rules” for determining what qualifies as residential land.

“These rules were very helpful from the perspective that there were numerous conflicting Court of Appeals opinions,” said Celico, who is now Summit County Assessor. 

Interest in the disputes stretched far beyond Breckenridge, with more than a dozen counties—from Larimer to La Plata—filing amicus briefs. The Colorado Attorney General’s Office, representing the Board of Assessment Appeals, was also a party in the cases.

While the statutory definition of residential land has been in place for decades, it hasn’t always caused so much controversy. But as the tax rate for residential property has fallen since the Gallagher Amendment, the distinction between vacant and residential land has grown all the more important, said Summit County Attorney Jeffrey Huntley, adding he expects “there will be a need to further clarify the statute.”

While counties around the state were watching the case, Huntley said he doesn’t think the court’s decision will affect the bottom line for local governments.  

“It obviously has a significant impact on each individual taxpayer. But as a county government or assessor’s office, it doesn’t have any impact on our overall revenues,” he said. “It really comes down to a question of fairness. And that’s what we strive to accomplish.”

Kenneth Kramer, of counsel at Spencer Fane, advises property owners in real estate tax matters. Of the issues presented in the three cases, he tends to see disputes over use requirements most frequently. He said the court’s decision in Hogan could actually help property owners since it appears to relax the use requirements for a parcel to qualify as residential.  

In situations like the one in the Kelly case, it shouldn’t be too hard for landowners to find a workaround by changing the title so parcels are in the same name, Kramer said. And most landowners who want to combine their lots and claim contiguity generally already have properties that touch, he added.

While the justices agreed “contiguous” couldn’t apply to parcels that don’t touch, they disagreed on the word’s meaning when applying their Mook decision to a companion case, Ziegler v. Park County Board of Commissioners. 

In Ziegler, the majority found that an undeveloped parcel must physically touch a parcel containing a residential improvement in order to meet the contiguity requirement. Landowner Stephen Ziegler had argued his entire stretch of land in Park County should be considered residential, even though only one of his three undeveloped parcels touches a residential parcel. 

Ziegler cited the phrase “the forty-eight contiguous United States” to argue for a broader understanding of “contiguous,” but the majority concluded this would lead to absurd results. 

In a partial dissent, Justice Carlos Samour agreed with Ziegler’s definition and rejected the majority’s interpretation of “contiguous.” Paraphrasing the movie “The Princess Bride,” he wrote, “I do not think it means what [the majority] think[s] it means.” Justices Brian Boatright and Richard Gabriel joined in Samour’s concurrence in part and the dissent in part.

Although Tuesday’s decisions may not clarify every single petition pending in the state, Celico said the court picked the Summit County cases because they “framed the various issues quite well.” He expects the ruling to streamline resolution of cases at the BAA and in county assessor’s offices around the state.

“I think a lot of counties have been waiting for this decision in order to make decisions on the local level,” he said.

“That’s not to say there won’t be some future controversy arising out of this,” he said. “But I don’t see any glaring unresolved issues that apply broadly.” 

— Jessica Folker

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