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Turner Drake & Partners Ltd.
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Counselling Services


Expropriation


Expropriation is a specialised field ... and we have assembled one of the best litigation support teams in North America. Each member is the product of our own training program: they thus combine breadth with depth. Each team member is thoroughly conversant with the most recent Case Law. In the words of a legal client, we have "a strong bench" ...

Expropriating authorities typically employ appraisers to quantify the compensable losses suffered by property owners. Times have changed however: the fiscal and legal attributes of real estate now often have greater relevance than the physical component. Today's expert requires a much broader education and training . a knowledge of the major disciplines that impact on real estate ... finance, economics, law, geosciences, construction, as well as appraisal. Since the property is often a business asset, knowledge of accounting, marketing, strategic management, business research and operations management is a necessary prerequisite to successfully formulating accurate claims for injurious affection and disturbance ... two items that are usually ignored or misunderstood by appraisers acting for acquiring authorities in expropriation cases.

To avoid the expense, delay and uncertainty inherent in a court action, most real estate litigation is settled by negotiation. Because our professional personnel are educated and trained in the process, we form part of the negotiating team, providing advice, guidance and support to legal counsel.

Compensation

The underlying principle of most legislation governing expropriation is that the property owner is entitled to be financially no "worse off" as a result of losing part or all of his/her property. Compensation for financial loss will fall under some, or all, of the following heads of claim:

(1) Market Value

If all of the property is expropriated, the acquiring authority has to pay the owner the same amount of money they would have obtained if they had sold it of their own free will, on the open market.

The owner won't normally get any extra however if the property has a "special" value to the expropriating authority, over and above its market value.

(2) Home For A Home

If the expropriated property is an owner occupied family home, the owner may be entitled to additional compensation. If, for example, the property is located in a neighbourhood of higher priced homes, so that the property owner cannot purchase a similar property to his/her own in that area, he/she may be able to claim the cost of acquiring a superior dwelling, or the cost of building an identical home, instead of just its market value.

(3) Disturbance

When a property owner is forced to move out of his/her home because it has been expropriated, he/she may be able to claim for the cost of moving expenses, together with items such as new drapes, etc.

When business premises are expropriated the occupant will suffer a variety of losses because they are forced to relocate. The firm will have to print new stationery, inform its customers, incur staff overtime packing and unpacking prior to and after the move, and so on. Profits may be effected, perhaps for several years, resulting in a reduction in the value of the business goodwill. All of these losses, together with the moving expenses and numerous other items, may be compensable.

(4) Special Purpose Properties

Some types of properties do not normally sell on the open market: churches and private clubs are examples. If the expropriated property falls into this category and the owner intends to relocate after the expropriation, they will be able to base their claim on the reasonable cost of reinstatement. Even though the property they are vacating may be old, their claim may be based on the cost of building a new, otherwise identical structure, plus the cost of acquiring a replacement site.

(5) Injurious Affection

If only part of the property is expropriated the acquiring authority has to pay the owner the market value of the portion they have acquired. They also have to compensate the property owner for any loss in value to the remaining property, which results from the partial taking. This is called injurious affection.

For example, a property owner may lose part of his/her front yard because the municipality widens the highway. The municipality must pay the property owner for the portion of the land they actually expropriate, including of course any shrubs, trees, etc. However the remaining property may also be worth less because the road is now closer to the dwelling and there is increased traffic noise, fumes, visual intrusion, etc. The new highway may be at a higher grade than the old road too, resulting in drainage or access problems for the property.

Perhaps the property comprises a woodlot or a farm. A new limited access highway cutting through the middle of it may render part less accessible. This is called severance. The less accessible land may be worth less and the property owner will be able to claim for this loss in value.

Other losses too, fall under the heading of injurious affection. A business may be so disrupted by the acquiring authority's construction works on the portion of the property they have expropriated, that profits suffer. The business may be able to claim compensation for this loss as well.

(6) Special Economic Advantage

A property owner may be able to claim for any special economic advantage arising out of, or incidental to, his/her actual occupation of the property to the extent that he/she has not been compensated for it under the other heads of claim.

If the property owner, or a member of his/her family, is disabled and the home has been adapted to meet their requirements, e.g. with paraplegic ramps, the owner will be able to claim for the cost of these improvements.

Similarly, if commercial premises are adapted to suit the unique requirements of the business, the owner may be able to claim additional compensation under this heading.

(7) Professional Fees

The expropriating authority usually has to pay the appraisal, legal and other costs involved in preparing the compensation claim as long as they are reasonably incurred. However these costs may not be available "as of right" unless the matter proceeds to court.

Case Law

Click here for relevant expropriation case law.