Skip to content

Compensation for Expropriation

May 11, 2021

Blog

Compensation for Expropriation

In this blog, we discuss what expropriation is and the types of compensation available to an owner of property or a business.

Expropriation is generally recognized as a necessary part of modern government; however the exercise of that power may result in a distressing experience for the affected owner. Learn about the types of damages and what compensation may be available in the latest Davis Martindale blog.

What is Expropriation?

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]. By and large authorities exercise the right to expropriate an owner for the benefit of the general public. Examples of reasons to expropriate may include the building of a highway or road, light way transit projects, building schools, etc.

Though, there is an imbalance of power between the owner and the authority, the Expropriation Act provides numerous safeguards that protect the property owner during the expropriation process. In Ontario the Local Planning Appeal Tribunal (LPAT) hears cases in relation to a range of land use matters including expropriations. One of these safeguards ensures that owners are entitled to fair compensation for any property taken.

Forms of Compensation

Forms of compensation owing to an owner will vary depending on the circumstances in each case. One of the key differentiators is whether the authority requires the full property or simply a portion of it.

The main categories of compensation in an expropriation include:
  • The fair market value of the expropriated property including any losses attributable to the adjoining land. The fair market value of the property may be determined using an expert such as an appraiser.
  • Disturbance damages are losses incurred by the expropriated owner for moving from the expropriated property. Disturbance damages may include expenses such as moving, legal and survey costs, costs for improvement, costs for inconvenience, finding equivalent accommodation and business losses due to relocation of a business, etc.
  • Damages for injurious affection may occur when only a portion of a property is expropriated. An owner may suffer injurious affection damages if a portion of its land is expropriated and in some cases, even if no land is expropriated at all. Claims for injurious affection relate to a potential reduction in the market value of property, as well as any personal or business damages such as losses attributable to downtime, and/or interest for unpaid parts of the claim.

Payment of Professional Fees Incurred

To create fairness in the process, the expropriating authority is obligated to pay for all reasonable professional fees incurred by an owner. This includes costs related to business valuators, legal counsel, real estate appraisers, land use planners and any other professional services that are reasonably required. Should the expropriating authority not agree with the assessment of the losses, the expropriating authority may also independently obtain expert advice in assessing losses.

If your business is involved in an expropriation matter, give the experts at Davis Martindale a call. We’d love to work with you.

Co-Authors

Louise Poole - Valuation & Litigation Partner - Davis Martindale
Louise Poole

CPA, CA, CBV, CFF
Partner
Valuation & Litigation

Korab Ferati - Valuation Associate - Davis Martindale
Korab Ferati

CPA, CMA
Associate
Valuation

Information Sources:

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

Work With Us

Our Valuation Advisors are ready to have
a personalized discussion with you.