WHAT YOU NEED TO KNOW ABOUT EXPROPRIATIONS

What is Expropriation?

In Ontario, an expropriation is defined as the “taking of land without the consent of the owner by an expropriating authority in the exercise of its statutory powers...”[1] The terms “owner” and “land” are subject to a broad definition under the Expropriations Act. Expropriation is essentially the government’s exercise of its right to take land for the benefit of the wider community, for example, the building of a highway or road. Expropriation can have a significant impact on the landowner, and therefore it is important to know the rules and procedures that govern the expropriating authority as well as the principles that govern the amount of compensation to be provided to the landowners.  

An Overview of the Expropriation Process

The expropriation process generally involves the following steps:

  1. The expropriating authority identifies properties or portions of properties that it requires to pursue an infrastructure project.
  2. The expropriating authority provides the property owner with an appraisal setting out proposed compensation.
  3. The owner may arrange for their own valuation report to assist in the negotiations with the expropriating authority.
  4. If a resolution with the expropriating authority is reached, the land will be conveyed to the expropriating authority in a voluntary sale.
  5. If the matter cannot be resolved, the expropriating authority will proceed to expropriate the land through a process which generally involves the following steps:
  1. Notice of Application for Approval to Expropriate Land – provides owners with notice that their interest in land may be expropriated and triggers the right to request a Hearing of Necessity.
  2. Notice of Expropriation – provides legal notice to the landowner that land has been expropriated.
  3. Section 25 Offer – within 90 days of the Notice of Expropriation, the expropriating authority must serve a settlement offer and a valuation report to the landowner.
  4. Board of Negotiation – either party may apply to the Board of Negotiation for a meeting to facilitate a settlement.
  5. Hearing at the Local Planning Appeal Tribunal – either party may apply to the Local Planning Appeals Tribunal to resolve the dispute by way of a binding order regarding the settlement amount.

Compensation

There are three main categories of compensation in an expropriation, as follows:

  1. The Fair Market Value of the Expropriated Land

The fair market value of the fee simple is based on the market price per square footage multiplied by the amount of land being taken.

  1. Disturbance Damages

Disturbance damages are provided for damages that are the “natural and reasonable consequence of the expropriation” such as the relocation of a fence or loss of trees. This may also include compensation for business loss.

  1. Damages for Injurious Affection

Injurious Affection occurs when the expropriating authority expropriates only a portion of the property (as opposed to the entire property). Owners can claim damages for the reduction in the market value of their remaining land as a result of the expropriation.

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The lawyers at Dale & Lessmann LLP have a wealth of experience in expropriation law. They have assisted property owners facing expropriation as a result of a wide variety of infrastructure projects, including the construction of the Hurontario LRT in Mississauga, the construction of the Hurontario LRT in Brampton, the expansion of Britannia Road in Milton, and the expansion of Highway 400, as well as additional projects.

 

[1] Expropriations Act, R.S.O. 1990 c. E.26, Section 1(1).