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New Rules for Getting Out of Town: Colorado Adds Provisions Governing Property Disconnections

Otten Johnson Alert November 2020

In a growing region like Colorado’s Front Range corridor, cities and towns often expand both upward and outward: upward through development and outward through annexation, bringing county land within their boundaries. For a landowner, moving property into a municipality can offer access to a range of services and assurances regarding development rights. Local governments can in turn count on additional tax revenue and corresponding commitments. But that new relationship doesn’t always work. When that happens, an annexation can be unwound through the less familiar process of “disconnection.” This fall, new legislative changes went into effect that will reshape the disconnection process for landowners looking to leave statutory cities and towns.

Under the old process, landowners could apply to the annexing municipality for an ordinance disconnecting their property and returning it to the county whence it came. That much remains the same. The changes, however, concern the land use entitlements the landowner may have secured during its time in the municipality: vested rights, particular zoning classifications, and the like.

First, a disconnecting property owner must now relinquish any statutory vested rights—that is, rights under Colorado’s Vested Rights Act that protect a landowner’s ability to develop a property in accordance with a particular approval (a site specific development plan or a development agreement). Vested rights can take a number of forms but commonly protect the right to build a particular number of housing units or to include a specific mix of uses with a development. Under the new rules, those rights now expire, or must be relinquished, as soon as the land returns to the county. A disconnecting property owner now loses any prior protection.

These changes aren’t exactly groundbreaking, but they do reshape the calculus for landowners looking to leave statutory municipalities under certain circumstances

 

Second, the statutory changes now prevent landowners from carrying on with the zoning they received while part of the municipality. Under the prior version of the statute, a landowner could continue to rely on the municipal zoning unless the county set about changing it. The new rules require counties to bring the disconnected properties under their own zoning within ninety days of the disconnection. They also prevent counties from applying any sort of automatic zoning classification to disconnected properties. That requirement applies irrespective of whether the landowner applies to the municipality for a disconnection or seeks a decree from a court.

What’s more, the statute also allows counties to prevent enterprising landowners from pulling building permits and beginning construction during the gap between the disconnection and the imposition of county zoning. It does, however, allow counties to process subdivision applications before the new zoning is in place. Final approval can then occur concurrently with the adoption of the new zoning.

These changes aren’t exactly groundbreaking, but they do reshape the calculus for landowners looking to leave statutory municipalities under certain circumstances. (The new language does not appear to apply to disconnections based on a failure to serve the annexed property or court-decreed disconnections from statutory towns.) In those circumstances, landowners can no longer rely on the entitlements they secured while part of the city or town. Upon departure, they will instead face counties’ discretionary rezoning processes, which may or may not provide entitlements consistent with landowners’ intentions for their properties. We therefore recommend exploring county intentions before pursuing a disconnection that could otherwise unexpectedly limit development options.

To read the original alert please click here.