Inverse Condemnation: When is Your Claim Precluded by the Arizona Statute of Limitations?

An inverse condemnation of a landowner’s property can occur when a governmental entity: (1) physically takes the property without compensation; or (2) passes a new law that has a serious impact on the value and/or utility of the property.  At times, the taking may be obvious, for example, if the governmental entity deprives the owner of access to the property by putting up a fence.  While regulatory takings are at times less obvious and/or pressing, in both cases, the property owner may adopt the view that he or she will simply address the problem later.

Believe it or not, the property owner needs to move quickly and file suit within one year of the taking. But, you ask, shouldn’t our statutes promote policies that do not encourage litigation?  That is not the law, and a landowner’s inverse condemnation claim will be waived if not timely asserted. See  Flood Control District of Maricopa County v. Gaines, 202 Ariz. 248 (App. 2002), involving the 1993 failure of a dam, which led to the flooding of the plaintiff-landowners’ property.  The Court rejected the applicability of the ten-year adverse possession statute of limitations, holding that that the one-year statute of limitations period in A.R.S. Section 12-821, governing all actions against public entities, was applicable to Plaintiffs’ inverse condemnation claim.  Relying on A.R.S. Section 12-821.01(B), the Court also explained that claims under Section 12-821 did not “accrue” to commence the running of the one-year time period until the landowners discovered or reasonably should have discovered that the injury was caused by the defendant’s conduct.  Concluding that the landowners did not file their inverse condemnation claims within one year of their accrual, the Court of Appeals ruled in favor of the Flood Control District, holding the claims were time-barred.

In short, landowners must not wait until it’s convenient to address a potential inverse condemnation claim as their right to pursue damages may be waived by inaction.[1]