May a request to transfer the base year value of a property taken by eminent domain to a replacement property be granted outside the state’s time limitation?

Facts: An owner’s property is taken by eminent domain. Three years later, the owner purchases a replacement property and pays property taxes based on the current fair market value of the property. More than four years after the first property was taken by eminent domain, the owner files a claim with the county to have the condemned property’s base year value transferred to the replacement property as provided under Proposition 13. The county denies the request since it was not submitted within four years from the date the first property was taken by eminent domain, as required by California property tax law.

Claim: The owner seeks a property tax refund, claiming the time limitation for transferring the base year value of property taken by eminent domain is unconstitutional since the purchase of eminent domain replacement property is excluded from reassessment under Proposition 13 as part of the just compensation entitled to a property owner for eminent domain seizure.

Counter claim: The county claims it is not required to approve the property owner’s request since the legislature may impose reasonable time restraints on constitutional rights and the time limitation is reasonable under Proposition 13.

Holding:
A California court of appeals held the owner is entitled to a tax refund since, though the owner did not submit the claim in the four-year time period, they acquired the replacement property within the four-year time period and enforcement of the time limitation on the owner’s claim is contrary to the intent of Proposition 13’s reassessment exclusion to further ensure just compensation to an owner whose property is taken by eminent domain, as provided for under eminent domain law. [Olive Lane Industrial Park, LLC v. County of San Diego (July 18, 2014)_CA4th_]

Reprinted from first tuesday Journal Online — P.O. Box 5707, Riverside, CA 92517

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