Category Archives: Real Estate

Flood Water Drainage Rights Between Adjacent Landowners

water-11699_1280Everyone knows that water flows downhill, but what are the legal ramifications when the flow is obstructed and property damage results? During flooding, conditions that historically allowed water to pass serenely from one property to another can be overwhelmed. Previously harmless objects in the drainage path become obstacles, and water reroutes without benefit of hydraulic design.  Who is responsible for resulting damage and under what circumstances? The law governing the rights and obligations of the landowners is well-developed, but the wide range of property configurations and varying drainage patterns can still make assessment of the legal relationships challenging.

Such questions often arise after unprecedented flooding, such as occurred in 2013 in and around Boulder and the Front Range of Colorado.  That event demonstrated that we still have a lot to learn about flood risks and how to manage them.  The relevant law can provide guidance as there are well-established legal rights that attend the flow and drainage of water over adjacent properties.

Common Law Drainage Easements

The right to have water drain from one property onto another is in the nature of an easement.  In traditional legal terms, an easement is a form of “servitude” which is defined as “[a] charge or a burden resting upon one estate for the benefit or advantage of another” (Black’s Law Dictionary).  The benefitted property is known as the dominant estate, while the burdened property is known as the servient estate.  Thus a drainage easement benefits the adjacent upstream property, the dominant estate, and burdens the adjacent downstream property, the servient estate.  In some instances, though technically not an easement, the downstream property may have a right to require that the drainage from the upstream property be regulated such that the downstream flow will not be destructive.

Drainage easements can be established in several ways: (1) by an instrument of conveyance such as an easement deed; (2) by a dedication in a subdivision plat or an engineered drainage plan associated with a subdivision; or (3) by common law, that is by appellate court rulings.  It is the latter two types of drainage easements that give rise to most disputes.

Colorado law recognizes the right of the owner of an up-gradient property to have surface water drain onto an immediately adjacent, down-gradient property by way of a “natural easement for drainage.”   When natural and historic drainage conditions are modified or disturbed by construction or development, the law becomes more complex.  Generally, the owner of a down-gradient (servient estate) property is allowed to modify the drainage pattern on that property provided that the modifications do not adversely impact the drainage over the up-gradient (dominant estate) property.

The Colorado Court of Appeals summarized the common law of drainage easements as follows:

Colorado has always followed the ‘civil law rule,’ which provides that the owner of upstream property possesses a natural easement on land downstream for drainage of water flowing in its natural course.  Also, “(n)atural drainage conditions may be altered . . . provided that water is not sent down in manner or quantity to do more harm than formerly.”  Neither the fact that the land concerned is urban rather than rural, nor the fact that the elevation on both properties has been lowered without materially altering the natural drainage flow, affords a rational basis for creating exceptions to the general rule. Colorado cases on water drainage have drawn no such distinctions.  (emphasis added)

Calvaresi v. Brannan Sand & Gravel Company, 534 P. 2d 652, 654-55 (Colo. App. 1975).  Note that, in Calvaresi, the Court of Appeals in the highlighted text indicated that drainage patterns can create drainage easements through the result of “urbanization,” that is the construction of improvements that alter the flow of water over servient estates.

Prescriptive Drainage Easements

The common law of access easements also provides for the creation of an easement by way of uncontested use over the alleged servient estate for a prescribed period of time.   Hankins v. Borland, 163 Colo. 575, 431 P.2d 1007 (1967) (holding that a drainage easement can be created by prescription, with a prescriptive period of 18 years).  Accord, Stoll v. MacPherson Duck Club, Ltd., 607 P.2d 1019, 1022 (Colo. App. 1979).

Repair and Maintenance of Drainage Easements

Though the primary purpose of a drainage easement is to allow water to flow over the dominant estate, there is an attendant, but limited, right of access over the servient estate in order to maintain drainage area such that entry onto the servient estate is not trespass.  In Shrull v. Rapasardi, 517 P.2d 860, 862 (Colo. App. 1973), plaintiffs brought an action for trespass when the defendants entered plaintiff’s property to reopen a ditch.  The trial court held that the defendants were acting lawfully in repairing the ditch.  The Court of Appeals in Shrull affirmed the trial court’s judgment, stating:

If the owner of the dominant estate does not unnecessarily inconvenience the owner of the servient estate and use of the easement is not expanded, the owner of the dominant estate may do whatever is reasonably necessary for the enjoyment of the easement, including repairs, ingress and egress, with space therefor as exigency may show.

Accord, Stoll v. MacPherson Duck Club, Ltd., 607 P.2d 1019, 1022 (Colo. App. 1979).

Liability for Impairment of Drainage Flow

If the owner of a down-gradient property subject to a drainage easement alters the drainage pattern for water flowing from the upstream, servient estate, and those changes substantially alter the flow so as to cause the water to back up onto the dominant estate, the owner of the servient estate may be liable for damages.  It is important to note that a physical alteration to a drainage area may not cause water to back up except during flood conditions, and thus the impairment may go unnoticed for years.  Nevertheless, the servient estate owner may be liable though the flooding may take place long after the alteration.  Also, it is useful to note that, in Colorado, the governmental immunity statute, C.R.S. §§ 24-10-101, et seq., does not apply to drainage easement disputes.  Upper Platte and Beaver Canal Co. v. Riverview Commons General Improvement Dist., 250 P.3d 711, 714-15 (Colo. App. 2010).  Thus, even if the downstream drainage blockage is created by a governmental entity, it could still be required to remove the blockage and even found liable for damages.

Upstream property owners have standing – that is, the right to file suit – to seek recovery of damages for the injury resulting from flood waters backed up by blockage of the downstream drainage.  In Romano v. Village of Glenview, 660 N.E.2d 56 (Ill. App. 1995), homeowners brought an action against the developer of a residential subdivision for injunctive and declarative relief seeking to have the developer replace drainage channels on their properties with underground drainage systems or, in the alternative, to require that the natural flow of surface water be restored so as not to flood the plaintiffs’ land.   In Romano, the city intervened, filing a motion to dismiss—based on governmental immunity and lack of standing—and contending that the plaintiffs had not alleged injury in fact.  The trial court granted the motion.  The Illinois Court of Appeals reversed, holding that the plaintiffs had alleged injury-in-fact that the drainage channels created unreasonably dangerous conditions for their children, deprived them of the use and enjoyment of their yards, and created soil erosion in their yards.

Seller Beware?

or Caveat Venditor?
In re Estate of Gattis, Residential Property Sellers, and the Economic Loss Rule

It is not always the buyer who is at risk in a real estate transaction.

The Economic Loss Rule (“ELR”) was adopted by the Colorado appellate courts in an attempt to clarify the often murky waters between the battleships of tort and contract law.  Unfortunately, the courts’ formulation has long been a source of confusion to construction law practitioners.  The Colorado ELR states that a party who suffers only economic loss from the breach of a contract may seek redress for such breach in contract only, and may not assert a tort claim unless the breaching party owed a duty of care independent of the duties laid out in the contract.  Put differently, whether a tort claim is precluded by the ELR depends on the source of the duty being breached — in order to recover in tort, the plaintiff must prove the breach of a duty separate from any duties imposed by the contractual relationship between the parties.  See, generally, Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256 (Colo. 2000); A.C. Excavating v. Yacht Club II Homeowners Ass’n, Inc., 114 P.3d 862 (Colo. 2005); BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 66 (Colo. 2004).

In November 2013, the Court of Appeals handed down In re Estate of Gattis, further clarifying the parameters of the ELR.  318 P.3d 549 (Colo. App. 2013).  The Court held that sellers of residential property owe an independent duty to disclose latent defects to the potential homeowners, and this duty exists independently of any disclosure terms included in the real estate contracts.  The result is that the ELR is inapplicable in such cases and a homeowner may sue either in tort or in contract, or both.  While Colorado courts had previously imposed this independent duty on home builders, Gattis extended this duty to residential sellers as well.

In Gattis, the Court further held that a seller’s independent duty to disclose defects was not subsumed by the standard form purchase and sale agreement. On the contrary, even had the form contracts not required disclosure, the sellers had a common law duty to disclose the existence of latent property defects independent of their contractual relationship with the buyers.

The policy considerations outlined by the Gattis court evidence a growing protective instinct towards homeowners, who are traditionally seen as less sophisticated than builders or sellers of residential properties, and whose claims against construction professionals the courts are increasingly hesitant to bar.  While it remains to be seen just how broadly the case will be interpreted, Gattis may well be considered a herald of a limiting of the ELR in construction cases as well as of a change in policy considerations coming from Colorado benches.