The Compensation Process and What to Expect
So, your land (or an interest in your land) has been expropriated. You’ve received your section 25 offer of compensation, your appraisal report, and the authority has taken possession of the land. What’s next? Frank Sperduti, Senior Partner at BLG LLP, sheds some light on next steps. “In many cases, in particular those where the primary areas of disagreement between the expropriating authority and the owner are market value and injurious affection, the first line of attack in having fair compensation determined is a meeting with the Board of Negotiation” he explains. The Board of Negotiation is made up mostly of qualified real estate appraisers, who specialize in market value and injurious affection. The Board of Negotiation process is triggered by a “Notice of Negotiation” which may be served on the expropriating authority by the owner or vice versa.
“I have found some considerable success in resolving claims early by triggering a Board of Negotiation Meeting,” says Sperduti. These meetings work best where both the owner and the expropriating authority have independent appraisal reports prepared by qualified appraisers. The process is quick and informal. There is no “evidence” called at such meetings, and the parties are encouraged to speak openly in a “without prejudice” forum. Where a resolution is reached, it is because both parties have agreed on something. The Board of Negotiation cannot make a binding “Order”, just a recommendation to the parties about settlement. However, both expropriating authorities and experienced lawyers acting for owners will take the Board of Negotiation’s recommendations seriously and in many cases – after only a day long meeting – difficult disagreements are resolved.
Where compensation cannot be agreed upon even with the help of the Board of Negotiation, parties must seek the assistance of the arbitration process stipulated in the Expropriations Act. In Ontario, the “Environmental and Land Tribunals of Ontario” (an administrative agency that includes the Ontario Municipal Board), arbitrates expropriation claims. The process is commenced by delivery of a Notice of Arbitration by the owner to the authority or vice versa. This is followed by a Statement of Claim, setting out the owner’s demands for compensation. The format of such a Statement of Claim looks much like a lawsuit filed in Superior Court. The expropriating authority will file a “Reply” pleading, and the claim is off and running.
Expropriation compensation claims often involve a “battle of the experts”. Claims can range in complexity from simple claims for market value compensation in a residential full taking context to loss of development opportunity, business loss, disturbance damages and injurious affection in commercial or industrial areas. The time it takes to resolve these claims varies to a large extent on the complexity of the issues, but most claims are resolved in less than a year (particularly if the parties avail themselves of the mediation process available in Ontario). Reimbursement for costs, since they are in addition to the claims for compensation, usually follow the resolution of the substantive issue so that, when completed, the owner is fairly compensation for the ordeal.
As with pre-expropriation compensation matters, asserting and maintaining successful compensation claims requires planning, experience, and judgment. Expropriating authorities and owners alike should seek the advice of experience professionals in order to ensure a speedy – and fair – resolution of these claims.