Expropriation Compensation and Costs
The Expropriations Act specifies the types of claims available to an owner whose land has been expropriated, and spells out the owners’ entitlement to reimbursement for costs. Of course, claims available include fair market value, but the Act goes much further, explains Frank Sperduti, Senior Partner at BLG LLP.
If only a piece of your land is expropriated, the Act specifies that an owner may be entitled to compensation for damages for “injurious affection”. “Simply put, this is the decrease in the value of your remaining lands resulting from an expropriation,” he says. Injurious affection has been awarded for landlocked parcels, difficulties accessing the remaining land after an expropriation, and loss of screening, privacy and amenity space. Here, Sperduti issues a word of caution. “In order to preserve your claim for compensation for injurious affection, you must commence your claim within one year of becoming aware of the claim”, he explains. “If an expropriating authority advises you that part of your land is required for a public project, you are well advised to seek the assistance of counsel and an experienced appraiser to ensure any claim for injurious affection is preserved.”
Other damages recoverable include disturbance damages, business losses, relocation costs, and those damages which are the “natural and reasonable consequence of the expropriation”. Essentially, the Act seeks to make an owner “whole”; since you didn’t ask to be expropriated, the idea of the legislation is to try to compensate you (insofar as money can) for the ordeal. The categories of recoverable items is quite broad, and you should ensure your legal advisor is given all the necessary information needed to ensure you receive the fair compensation you are entitled to.
Many people worry that the cost of hiring a lawyer or appraiser will detract from the overall compensation they receive on an expropriation. However, the Act provides owners with unique and powerful cost protections that go well beyond the costs that are typically awarded in “normal” lawsuits. Nothing about an expropriation is normal. You didn’t ask for it, so the law requires the expropriating authority to reimburse you for your “reasonable legal, appraisal and other costs actually incurred” to determine the fair compensation payable to you. In other words, your reasonable costs are reimbursed to you in addition to any amounts you are awarded for market value or damages.
Owners should be wary if asked by a professional advisor to share any part of the claim for market value or expropriation compensation. Most lawyers who practise in the field of expropriation, even those who may agree to hold back billing you anything until your claim for compensation is resolved, understand that their reasonable costs will be recovered from the expropriating authority in addition to any compensation payable to their clients and will not ask for “contingency” style arrangements requiring an owner to surrender some proportion of their fair compensation.
Stay tuned for my next posting, which will review the steps involved in the compensation claim process and what to expect.