Village at Treehouse, Inc. v. Property Tax Administrator, 2014 COA 6

The Village at Treehouse, Inc. purchased for over $1 million transferable development rights from the Treehouse Condominium Association (HOA) to build up to 19 condominium units in an existing condominium project in Summit County, Colorado.
The rights were conveyed by a recorded "Warranty and Assignment of Supplemental Development Rights" (Assignment) in 2008; four units have since been built and taxed, fifteen remained unbuilt and the Village retained the remaining development rights and proceeds from any sales.
Summit County assessor separately scheduled and assessed the development rights for 2009–2010; the county initially cancelled the assessment following the Village's abatement request, but the Property Tax Administrator denied a refund, triggering BAA review.
The Board of Assessment Appeals (BAA) upheld the Administrator, concluding the Assignment permanently and irrevocably severed the development rights from the condominium common elements and constituted taxable interests in real property.
The Village appealed, arguing the rights were not interests in real property, were already included in common-element valuation, and separate taxation violated the unit-assessment rule; the court considered Colorado statutes and precedent and affirmed the BAA.

Issue	Village's Argument	Administrator/BAA's Argument	Held
Are the purchased development rights taxable interests in real property?	Rights are future/contract/incorporeal rights, not taxable real property; legislature never classified them as taxable real property.	Assignment conveyed a recorded, assignable, unconditional interest in land; Colorado law taxes interests in real property unless exempt.	Held: Taxable — the Assignment conveyed an interest in land subject to ad valorem tax.
Were the development rights severed from condominium common elements such that separate taxation is permitted?	Rights still part of common elements and thus should be valued with units/common elements.	The Assignment severed title to the development rights and transferred exclusive ability to exercise them to the Village.	Held: Severed — separate taxation of the development rights does not violate condominium valuation statutes.
Does separate taxation violate the unit-assessment rule (assess all estates in a unit together)?	Unit-assessment rule requires assessing all estates in a unit together; separate taxation impermissible.	The Assignment created distinct, separate interests (bargained away "forever") so separate assessment is proper.	Held: No violation — separate interests can be taxed separately once severed.

Bd. of Cnty. Comm'rs v. Vail Assocs., 19 P.3d 1263 (Colo. 2001) (constitutional/legislative framework: all real and personal property as defined by legislature is taxable unless exempt)
Radke v. Union Pac. R. R. Co., 334 P.2d 1077 (Colo. 1959) (distinguishing revocable conditional licenses from conveyances of property interests)
Mitsui Fudosan (U.S.A.), Inc. v. Cnty. of Los Angeles, 219 Cal.App.3d 525 (Cal. Ct. App. 1990) (transferable development rights are fractional interests in land and taxable)
Saddle Ridge Corp. v. Board of Review, 784 N.W.2d 527 (Wis. 2010) (developer taxed on purchased development rights; court rejects taxing only built units)