Tax Type
Local Taxes
Property Tax
Description
Property taken under Eminent Domain; Proration of Real Estate Taxes
Topic
Basis of Tax
Local Power to Tax
Local Taxes Discussion
Property Subject to Tax
Date Issued
01-28-1985
[Opinion - Virginia Attorney General: 1985 at 376]
REQUEST BY: Honorable C. Dean Foster, Jr. County Attorney for Scott County
OPINION BY: Gerald L. Baliles, Attorney General
OPINION:
You have asked my opinion on the proration of real estate taxes on property taken under eminent domain by a water and sewer authority under the following circumstances:
"On July 25, 1983, the Scott County Water and Sewerage Authority filed a Certificate of Deposit and Guarantee of Payment for Taking of Land in the Scott County Circuit Court Clerk's Office pursuant to § 33.1-122, Virginia Code (the so-called "quick take" or right of entry statute used by the Virginia Highway Commissioner which is also authorized by § 15.1-1250(f) . . . for use by Virginia water and sewer authorities). The Certificate was filed to acquire a 75.37 acre tract of land in Scott County for the installation and operation of a regional sewerage treatment plant and sewerage sludge disposal facility . . . .
The landowners, however, denied the Authority entry to the property and contested the condemnation. They did not withdraw any of the deposit made by the Authority for the attempted taking by Certificate and they continued in possession, use and enjoyment of the entire tract. In the subsequent condemnation proceedings in the Circuit Court instituted by petition of the Authority, the Court ruled the Authority had not shown a necessity for a take of the entire 75.37 acres but the Court allowed the Authority to amend its petition to take a 27.05 acre portion of the tract. On April 2, 1984, the Commissioners returned their Report and the Court entered its Order on June 25, 1984, confirming the Report and vesting fee simple title to the 27.05 acres in the Authority . . . . Throughout the proceedings until the Court's Order was entered in June, 1984, the landowners remained in possession of the entire 75.37 acres, grazing cattle and raising and harvesting hay."
Section 58.1-3360 of the Code of Virginia (§ 58-822 prior to January 1, 1985) provides that a taxpayer whose property is taken by the United States, the Commonwealth, and others, including any political subdivision, shall be relieved of tax on the property taken from and after the date upon which the title was or shall be vested in the taking authority.
Section 33.1-122 states, in part:
- "Upon . . . recordation [of the certificate with the clerk], the interest or estate of the owner of such property shall terminate and the title to such property or interest or estate of the owner shall be vested [defeasibly] in the [Authority] . . . ."
The rights and interests of the owner are transferred to the fund represented by the certificate. See Norfolk Southern Ry. v. American Oil, 214 Va. 194, 198 S.E.2d 607 (1973).
In the 1964-1965 Report of the Attorney General at 127, the following opinion on this subject was given:
"Recordation of the certificate operates to transfer both legal title and beneficial ownership from the property owner to the [Authority] . . . . While the property owner retains interest in the property until indefeasible title is vested in the [Authority] . . . by the final order, I do not feel that this interest is sufficient to prevent the operation of § 58-822 at the time of the recordation of the certificate . . . . [T]he tax credit provided by § 58-822 . . . should be computed from the date of the recordation of the certificate pursuant to [§ 33.1-122] . . . ."
As a consequence, I am of the opinion that the real estate tax abated on the entire 75.37 acres from the date of the filing of the certificate.
From the copy of the certificate, it appears that the fee simple title to the 75.37 acres was taken on July 25, 1983, the date of recordation. The sum of $ 82,500 was deposited pursuant to that certificate. You did not indicate whether an amended certificate was recorded at the time the amended petition was filed, as provided in § 33.1-125, or if the amount on deposit was changed to reflect the reduction of land taken in fee, together with an easement through the remaining portion.1 The order confirming the Commissioner's report, however, confirmed title to 27.05 acres in the Authority, together with a perpetual easement of right-of-way over 75.37 acres. The order also awarded interest on the sum of $ 12,500, the difference between the award of Commissioners and the amount deposited originally.
Under these circumstances, I do not have sufficient information before me to determine when the acreage in excess of the 27.05 acres reverted to the landowners. In absence of a reversion, the landowners are not liable for taxes on that portion of the land. Clearly as to the 27.05 acres, title to which was confirmed, the landowners were relieved of the tax obligation from July 25, 1983. As to the acreage not condemned in fee, it will be necessary to determine when it reverted to the landowners before taxes can be assessed against them. The tax should be based on the value of the 48.32 acres, as encumbered by the permanent easement, from the date of reversion.
1 That amendment process can be done pursuant to § 33.1-125, or as part of the final order pursuant to § 33.1-127, as long as the referenced lands taken and not taken are adequately described and reference is made to the original certificate as set out in § 33.1-125.
Attorney General's Opinion