A. For the purposes of assessing compensation and damages, the right thereto shall be deemed to have accrued as of the date the petition is filed, and actual value on that date shall be the measure of compensation for all property taken, and also the basis of damages for property not taken but injuriously affected in cases where such damages are legally recoverable; the amount of the award shall be determined from the evidence and not be limited to any amount alleged in the petition or set forth in the answer.

B. Whenever just compensation shall be ascertained and awarded in such proceeding and established by judgment, the judgment shall include as a part of the just compensation awarded interest at the rate of ten percent a year upon the unpaid portion of the compensation awarded from the date the petition is filed to the date of payment or the date when the proceedings are finally abandoned. The judgment shall not include interest upon the amount represented by funds deposited by the condemnor pursuant to the provisions of Sections 42A-1-19 and 42A-1-22 NMSA 1978.

C. The court shall have the power to direct the payment of delinquent taxes, special assessments and rental or other charges owed out of the amount determined to be just compensation and to make orders as the court deems necessary with respect to encumbrances, liens, rents, insurance and other just and equitable charges.

D. The judgment shall credit against the total amount awarded to the condemnee any payments or deposits paid over to him made before the date of entry of judgment by the condemnor as compensation for the property taken, including any funds which the condemnee withdrew from the amount deposited by the condemnor pursuant to the provisions of Section 42A-1-19 or 42A-1-22 NMSA 1978.

E. If the amount to be credited against the award under Subsection D of this section exceeds the total amount awarded, the court shall require that the condemnee pay the excess to the condemnor.

F. The price paid for similar property by one other than the condemnor may be considered on the question of the value of the property condemned or damaged if there is a finding that there have been no material changes in conditions between the date of the prior sale and the date of taking, that the prior sale was made in a free and open market and that the property is sufficiently similar in the relevant market with respect to situation, usability, improvements and other characteristics.

History: 1978 Comp., § 42A-1-24, enacted by Laws 1981, ch. 125, § 20; 2001, ch. 10, § 1; 2001, ch. 320, § 1.

The 2001 amendment, effective June 15, 2001, substituted "the rate of ten percent" for the "rate of eight percent" in Subsection B.

Laws 2001, ch. 10, § 1 and Laws 2001, ch. 320, § 1, both effective June 15, 2001, enacted identical amendments to this section. The section was set out as amended by Laws 2001, ch. 320, § 1. See 12-1-8 NMSA 1978.

I. GENERAL CONSIDERATION.

"Taking of property" in constitutional sense. — Constitutional rights rest on substance, not on form; therefore, liability to pay compensation is not to be evaded by leaving title in the owner while depriving him of the beneficial use of the property. When interference with the use of property by its owner consists of actual entry upon land and its devotion to public use for more than a momentary period, there is a taking of property in the constitutional sense, whether there has been any formal condemnation or not. City of Albuquerque v. Chapman, 1966-NMSC-212, 77 N.M. 86, 419 P.2d 460.

Taking is complete where entry is made upon property by condemnor and act committed which indicates an intent to appropriate the property. City of Albuquerque v. Chapman, 1966-NMSC-212, 77 N.M. 86, 419 P.2d 460.

Having taken property, municipality cannot avoid payment therefor on the basis that if it had not "taken" the property, it could have required a gift of the property as a condition for use of the remainder of the tract at some future time. City of Albuquerque v. Chapman, 1966-NMSC-212, 77 N.M. 86, 419 P.2d 460.

Taking not necessary for compensation, if consequential damages. — In order for an owner to be entitled to compensation, a taking is not required. It is sufficient if there are consequential damages. Board of Cnty. Comm'rs v. Harris, 1961-NMSC-165, 69 N.M. 315, 366 P.2d 710.

Effect of legislature's fixing time for assessment of market value. — The legislature may establish some convenient time, as of which the value of the property will be assessed and the amount of compensation fixed, and while, in particular cases, the condemnee might fare better or worse under this than under another possible rule, the condemnee may not complain when, because of market fluctuations, the compensation fixed by this rule is less than the market value at some other time during the condemnation proceedings. Nor is the situation altered when the condemnor is permitted to go into possession prior to the date as of which compensation is fixed, since the market value on that date is unaffected by the identity of the party in possession. State ex rel. State Hwy. Comm'n v. Chavez, 1966-NMSC-222, 77 N.M. 104, 419 P.2d 759.

Date for fixing compensation. — The legislature's selection of the date of filing of the condemnation petition as the valuation date is impermissible because there has been no vesting of title in the condemnor on that date. The date the preliminary order of entry becomes effective is the proper date to use in assessing the value of the property and in fixing the compensation to which the owner is constitutionally entitled. County of Dona Ana ex rel. Bd. of Cnty. Comm'rs v. Bennett, 1994-NMSC-005, 116 N.M. 778, 867 P.2d 1160.

Effect of subsequent higher land sales on damages. — Landowner was damaged by the taking even though the value of the land after the date the condemnation action was filed was higher than the value of the land on the date when compensation was assessed. City of Albuquerque v. Chapman, 1966-NMSC-212, 77 N.M. 86, 419 P.2d 460.

Effect of stipulation as to future damages. — Where there is no conflict between the parties hereto as to the future damages stipulated to, of which the trial court had notice, the judgment should conform to the strict wording of the stipulation. Transwestern Pipe Line Co. v. Yandell, 1961-NMSC-173, 69 N.M. 448, 367 P.2d 938.

Effect of voluntary abandonment by nonuse on underlying fee. — Where the public use of the street surface continues, the authorities generally agree that the possibility of voluntary abandonment by nonuse is so remote and improbable that the underlying fee has no substantial value in a condemnation proceeding. State ex rel. State Hwy. Comm'n v. Myers, 1963-NMSC-117, 72 N.M. 319, 383 P.2d 274.

Price for abutting lots includes value of underlying, abutting fees. — In the absence of a special value, the price fixed for the abutting lots taken in condemnation includes any value of the underlying abutting fee in the streets and alleys carried with condemnation of such abutting lots. State ex rel. State Hwy. Comm'n v. Myers, 1963-NMSC-117, 72 N.M. 319, 383 P.2d 274.

Interest from time owner's possession invaded. — The owner of land taken in condemnation proceedings should have interest from the time his possession is invaded, either with or without an order of the court. State ex rel. State Hwy. Comm'n v. Peace Found., Inc., 1968-NMSC-173, 79 N.M. 576, 446 P.2d 443.

When immediate possession is granted to condemnor, however, the condemnee is deprived of the use of his property between the date of such entry and the date when the compensation is paid to him. He would therefore be entitled to interest on the amount of the award from the date of entry by the condemnor. State ex rel. State Hwy. Comm'n v. Chavez, 1966-NMSC-222, 77 N.M. 104, 419 P.2d 759.

Suspension of interest from date of continuance is error. — The allowing of interest from the date the petition is filed is essential to just compensation and the trial court erred by suspending interest from date of continuance until jury verdict. State ex rel. State Hwy. Comm'n v. Peace Found., Inc., 1968-NMSC-173, 79 N.M. 576, 446 P.2d 443.

Railroad improvements not fixtures. — The railroad improvements put upon lands included in a coal entry, previous to condemnation proceedings, even when the entry is a wilful and violent trespass, do not become a fixture of the land, and are not to be taken into consideration in estimating compensation. Atchison, T. & S.F. Ry. v. Richter, 1915-NMSC-008, 20 N.M. 278, 148 P. 478.

Parties with debt claims against the property owner, whether unsecured or recorded, could not meaningfully participate in condemnation proceedings as "condemnees". Rather, parties with such claims must rely for relief on the allocation proceedings conducted under Subsection C of this section. City of Sunland Park v. Santa Teresa Servs. Co., 2003-NMCA-106, 134 N.M. 243, 75 P.3d 843, cert. denied, 134 N.M. 179, 74 P.3d 1071.

II. COMPENSABLE DAMAGES.

Lost profits for temporary physical taking. — In an inverse condemnation proceeding for a temporary physical taking, lost profits may be recovered when they are the best measure of damages of the value of the lost use and enjoyment of condemned land. Primetime Hospitality, Inc. v City of Albuquerque, 2009-NMSC-011, 146 N.M. 1, 206 P.3d 112, rev'g 2007-NMCA-129, 142 N.M. 663, 168 P.3d 1087.

Where the landowner had begun constructing a hotel when the landowner accidentally ruptured an encroaching municipal waterline; the opening of the hotel was delayed, lost business damages were the only measure of the loss of use and possession of the property during the temporary taking; and lost profits injuries were directly caused by the encroaching waterline, lost profits for the period of time during which the opening of the hotel was delayed was the best evidence of the value of the property taken. Primetime Hospitality, Inc. v City of Albuquerque, 2009-NMSC-011, 146 N.M. 1, 206 P.3d 112, rev'g 2007-NMCA-129, 142 N.M. 663, 168 P.3d 1087.

Excess construction costs for temporary physical taking. — In an inverse condemnation proceeding for a temporary physical taking, construction costs that are a direct result of the taking and that are necessary to put the landowner in the position the landowner would have been had no taking occurred are compensable. Primetime Hospitality, Inc. v City of Albuquerque, 2009-NMSC-011, 146 N.M. 1, 206 P.3d 112, rev'g 2007-NMCA-129, 142 N.M. 663, 168 P.3d 1087.

Where the landowner had begun constructing a hotel when the landowner accidentally ruptured an encroaching municipal waterline; the landowner incurred additional construction costs to repair water damage and to construct a buttress wall to permit construction to proceed, the expenses were a direct result of the municipality's temporary physical taking of the property and are compensable. Primetime Hospitality, Inc. v City of Albuquerque, 2009-NMSC-011, 146 N.M. 1, 206 P.3d 112, rev'g 2007-NMCA-129, 142 N.M. 663, 168 P.3d 1087.

Loss of growing crops. — Where an existing crop is a condition that a willing, unobligated buyer would consider in arriving at a price for the property, crop damages may be included in a condemnation award as special or consequential damages. El Paso Elec. Co. v. Pinkerton, 1981-NMSC-039, 96 N.M. 473, 632 P.2d 350.

Lessees' right to compensation just as fixed as owner. — Appellant lessees' right to compensation is just as fixed and complete as is the right of the owner of property which had been condemned and the property actually entered. The rights of appellants are in no way altered after the date of notice by the fact that they continued to enjoy free access even though the enjoyment was in violation of the court order for which they could have been held in contempt. State ex rel. State Hwy. Comm'n v. Chavez, 1966-NMSC-222, 77 N.M. 104, 419 P.2d 759.

Existence of compensable damages factual question. — The line between noncompensable damage through an exercise of the police power, and damage for which payment must be made for a taking under eminent domain is one not easily drawn, and the supreme court has not attempted to state a rule of universal application, but will decide each case as it arises. Board of Cnty. Comm'rs v. Harris, 1961-NMSC-165, 69 N.M. 315, 366 P.2d 710.

Right to access compensable. — The right to access is a property right, and the same may not be taken or damaged without the payment of compensation. State ex rel. State Hwy. Comm'n v. Chavez, 1966-NMSC-222, 77 N.M. 104, 419 P.2d 759.

Grade change not compensable, unless material. — It is not every change of grade which would be compensable. It must be a material change, and one which causes consequential damage. Injury which is the result of the proper imposition of regulations under the police power is not compensable. Board of Cnty. Comm'rs v. Harris, 1961-NMSC-165, 69 N.M. 315, 366 P.2d 710.

Loss based on unfounded fears. — In a partial condemnation action, a property owner is entitled to receive as compensation the diminution in value of the remainder of the property caused by public perception of the use to which the condemned property will be put. Under this view, compensation is awarded for loss of market value even if the loss is based on fears not founded on objective standards. City of Santa Fe v. Komis, 1992-NMSC-051, 114 N.M. 659, 845 P.2d 753.

III. MEASURE OF DAMAGES.

Deduction for a contribution in aid of construction. — The amount previously paid as a contribution in aid of construction of property by a condemnor to a condemnee in a condemnation action of the same property may not be deducted from the fair market value of the property that the condemnor owes the condemnee as compensation for the taking. Moriarty School Dist. Bd. of Education v. Thunder Mtn. Water Co., 2007-NMSC-031, 141 N.M. 824, 161 P.3d 869.

Credit for contribution in aid of construction.— The contribution in aid of construction that a school district paid a regulated public utility for a water line extension to receive water service cannot be credited against the amount awarded to the utility in an action by the school district to acquire the water line extension by eminent domain. Moriarty Mun. Sch. Dist. v. Thunder Mountain Water Co., 2006-NMCA-135, 140 N.M. 612, 145 P.3d 92, cert. granted, 2006-NMCERT-010, 140 N.M. 674 146 P.3d 809.

Method of calculating damages. — In arriving at the proper amount of compensation to be allowed in condemnation proceedings, the correct measure of damages is the difference in the value of the property immediately before the taking and the value of the property immediately after the taking, the owner being entitled to the difference in these sums, in addition to a recovery for the various elements of damage to the remaining land not taken but injuriously affected. Transwestern Pipe Line Co. v. Yandell, 1961-NMSC-173, 69 N.M. 448, 367 P.2d 938.

Damages recoverable cannot exceed value of land taken. — Where no testimony concerning compensable elements of damage were pointed out to the court except the value of the land taken, the damages recoverable could not exceed the value of the land taken. State ex rel. State Hwy. Comm'n v. Brock, 1968-NMSC-165, 80 N.M. 80, 451 P.2d 984.

Before and after rule. — The so-called before and after rule, whereby the owner of property is entitled to recover as compensation the amount the fair market value of his property is depreciated by the taking is applicable where damage to property results from a change in grade. Board of Cnty. Comm'rs v. Harris, 1961-NMSC-165, 69 N.M. 315, 366 P.2d 710.

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.

Both benefits and detriments considered. — In applying the before and after rule, the court must consider both benefits and detriments to the property by reason of the taking of the land. Board of Trustees v. Spencer, 1965-NMSC-159, 75 N.M. 636, 409 P.2d 269.

Fair market value. — Fair market value, which includes in its determination all relative elements of injury and benefit received by the landowner, is theoretically what a willing seller would take and a willing buyer offer; but as a willing seller is usually lacking in condemnation cases, the court has a special responsibility for seeing that the seller receives what is honestly due him, as well as for making sure that under the pressure of compulsion the seller does not gouge the public for more than his property is reasonably worth. Board of Comm'rs v. Gardner, 1953-NMSC-047, 57 N.M. 478, 260 P.2d 682.

Value determined by highest and best use. — When evaluating the worth of property in eminent domain proceedings one should consider the entire property worth in the market before the taking, considering not merely the uses to which it was applied at the time of condemnation but the highest and best uses for which it was adaptable. City of Albuquerque v. Chapman, 1966-NMSC-034, 76 N.M. 162, 413 P.2d 204; City of Clovis v. Ware, 1981-NMSC-076, 96 N.M. 479, 632 P.2d 356.

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. Determination of the highest and best use should be made with regard to the existing business or wants of the community, or such as may be reasonably expected in the immediate future. City of Albuquerque v. PCA-Albuquerque #19, 1993-NMCA-043, 115 N.M. 739, 858 P.2d 406.

Value not in accordance with condemnor's value. — It has long been established that the value of the property taken by eminent domain is not appraised in accordance with any special value to the condemnor. Board of Cnty. Comm'rs v. Vargas, 1966-NMSC-106, 76 N.M. 369, 415 P.2d 57.

Determination of improper award. — Where the awards in condemnation proceeding are far below and outside the bounds of the testimony of any witness, they are improper. AT & T Co. v. Walker, 1967-NMSC-049, 77 N.M. 755, 427 P.2d 267.

IV. PROOF OF DAMAGES.

Expert must know property values in vicinity. — Because the expert in a condemnation case lacked knowledge of property values in the vicinity of the condemned property, he was not qualified to express an opinion quantifying the decrease in value of the property in either actual dollar or percentage terms. City of Albuquerque v. PCA-Albuquerque #19, 1993-NMCA-043, 115 N.M. 739, 858 P.2d 406.

Opinions by real estate appraisers on before and after market values must be considered in connection with related facts on which they are based, and a satisfactory explanation must be given as to how the witness arrived at his conclusion. City of Albuquerque v. Chapman, 1966-NMSC-034, 76 N.M. 162, 413 P.2d 204; City of Albuquerque v. Chapman, 1966-NMSC-212, 77 N.M. 86, 419 P.2d 460.

Owner of realty competent to testify as to value. — As owner of real property is presumed to have special knowledge as to its value by reason of ownership and is therefor competent to testify to value. City of Albuquerque v. Ackerman, 1971-NMSC-032, 82 N.M. 360, 482 P.2d 63.

Admissibility of evidence of other sales within court's discretion. — A trial judge is granted a wide discretion in determining the admissibility of evidence of other sales, taking into consideration, among other things, whether the price paid was sufficiently voluntary to be a reasonable index of value. State ex rel. State Hwy. Comm'n v. Bassett, 1970-NMSC-051, 81 N.M. 345, 467 P.2d 11.

The rule is well established that the decision of the question whether or not conditions surrounding another tract of land or the sale thereof are sufficiently similar to the circumstances of the pending case and the land involved therein so that evidence as to the sale price may be admitted to prove the value of the land in controversy rests largely within the discretion of the trial court. State ex rel. State Hwy. Comm'n v. Bassett, 1970-NMSC-051, 81 N.M. 345, 467 P.2d 11.

Exclusion of evidence of other sales. — If the trial court, in its discretion, determined that the prices paid to other landowners were not reasonable estimates of the value of the land in this case, or that the owners settled for less than the land might have brought on the open market in order to avoid litigation, the supreme court will not rule that the trial court abused its discretion in excluding the evidence. Transwestern Pipe Line Co. v. Yandell, 1961-NMSC-173, 69 N.M. 448, 367 P.2d 938.

Proof of specific offers of purchase is not admissible to establish reasonable value in condemnation proceedings. Middle Rio Grande Conservancy Dist. v. Crabtree, 1961-NMSC-134, 69 N.M. 197, 365 P.2d 442.

Assessed value not evidence of value. — By itself, the assessed value of property is not competent direct evidence of value for purposes other than taxation. El Paso Elec. Co. v. Landers, 1970-NMSC-001, 82 N.M. 265, 479 P.2d 769.

Jury permitted to use knowledge gained by view of land. — The jury is permitted under the law to use their knowledge gained by a view of the land in question, not only to interpret the evidence offered in the case, but also as independent evidence of the facts as these appeared to them individually on the view. Board of Comm'rs v. Gardner, 1953-NMSC-047, 57 N.M. 478, 260 P.2d 682.

Law reviews. — For note, "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 §§ 136 et seq., 168 et seq., 183, 184; 27 Am. Jur. 2d Eminent Domain §§ 257, 258, 294, 295, 297, 304, 305, 314, 474, 475, 476, 477, 605, 608, 822, 825, 826, 828.

Admissibility, in eminent domain proceeding, of evidence as to price paid for condemned real property during pendency of the proceeding, 55 A.L.R.2d 781.

Fire risk or hazard as element of damages in condemnation proceedings, 63 A.L.R.2d 313.

Cost to property owner of moving personal property as element of damages or compensation, 69 A.L.R.2d 1453.

Right to open and close argument in trial of condemnation proceedings, 73 A.L.R.2d 618.

Counsel's use, in trial of condemnation proceeding, of chart, diagram or blackboard, not introduced in evidence, relating to damages or the value of the property condemned, 80 A.L.R.2d 1270.

Bad reputation of condemned property derived from its illegal use for gambling, prostitution, or the like, as factor decreasing compensation or damages, 87 A.L.R.2d 1156.

Mandamus to compel ascertainment of compensation for property taken or for injuries inflicted under the power of eminent domain, 91 A.L.R.2d 991.

Changes in purchasing power of money as affecting compensation, 92 A.L.R.2d 772.

Depreciation in value, from project for which land is condemned, as a factor in fixing compensation, 5 A.L.R.3d 901.

How to obtain jury trial in eminent domain: waiver, 12 A.L.R.3d 7.

Propriety and effect, in eminent domain proceeding, of argument or evidence as to landowner's unwillingness to sell property, 17 A.L.R.3d 1449.

Propriety and effect, in eminent domain proceeding, of argument or evidence as to source of funds to pay for property, 19 A.L.R.3d 694.

Propriety and effect, in eminent domain proceeding, of instruction to the jury as to landowner's unwillingness to sell property, 20 A.L.R.3d 1081.

Charging landowner with rent or use value of land where he remains in possession after condemnation, 20 A.L.R.3d 1164.

Propriety and effect of argument or evidence as to financial status of parties in eminent domain proceeding, 21 A.L.R.3d 936.

Admissibility, on issue of value of condemned real property, of rental value of other real property, 23 A.L.R.3d 724.

Admissibility of photographs or models of property condemned, 23 A.L.R.3d 825.

Admissibility of evidence of proposed or possible subdivision or platting of condemned land on issue of value in eminent domain proceedings, 26 A.L.R.3d 780.

Good will or "going concern" value as element of lessee's compensation for taking leasehold in eminent domain, 58 A.L.R.3d 566.

Liability of condemnor in eminent domain proceedings for fees of expert witnesses who testified for property owner, 68 A.L.R.3d 546.

Unsightliness of powerline or other wire, or related structure, as element or damages is easement condemnation proceeding, 97 A.L.R.3d 587.

Recovery of value of improvements made with knowledge of impending condemnation, 98 A.L.R.3d 504.

Assemblage or plottage as factor affecting value in eminent domain proceedings, 8 A.L.R.4th 1202.

Eminent domain: measure and elements of lessee's compensation for condemnor's taking or damaging of leasehold, 17 A.L.R.4th 337.

Fear of powerline, gas or oil pipeline, or related structure as element of damages in easement condemnation proceeding, 23 A.L.R.4th 631.

Unaccepted offer for purchase of real property as evidence of its value, 25 A.L.R.4th 571.

Unaccepted offer to sell or buy comparable real property as evidence of value of property in issue, 25 A.L.R.4th 615.

Eminent domain: compensability of loss of view from owner's property - state cases, 25 A.L.R.4th 671.

Unaccepted offer to sell or listing of real property as evidence of its value, 25 A.L.R.4th 983.

Eminent domain: measure and elements of damages or compensation for condemnation of public transportation system, 35 A.L.R.4th 1263.

Admissibility of testimony of expert, as to basis of his opinion, to matters otherwise excludible as hearsay - state cases, 89 A.L.R.4th 456.

Eminent domain: compensability of loss of visibility of owner's property, 7 A.L.R.5th 113.

Excessiveness or adequacy of attorneys' fees in matters involving real estate - modern cases, 10 A.L.R.5th 448.

Validity, construction, and effect of statute or lease provision expressly governing rights and compensation of lessee upon condemnation of leased property, 22 A.L.R.5th 327.

Measure of damages or compensation in eminent domain as affected by premises being restricted to particular educational, religious, charitable, or noncommercial use, 29 A.L.R.5th 36.

Valuation of mineral interests in federal condemnation proceedings, 40 A.L.R. Fed. 656.

Method of determining rate of interest allowed on award to owner of property taken by United States in eminent domain proceeding, 56 A.L.R. Fed. 477.

29A C.J.S. Eminent Domain §§ 96 to 200, 406, 414 to 416.