Expropriation: An Overview of Your Rights as a Property Owner


By
Simon Fung
November 30, 2016

Overview

An expropriation occurs when a governmental authority (known as the Expropriating Authority) takes land without the consent of the owner. This right is codified in the Expropriations Act. The Act outlines whether there is a power to expropriate, what procedures must be followed by the Authority and affected owners, whether there are any entitlements to compensation, and any terms and conditions to be provided. This is a highly technical and complex area of law that can be difficult for a property owner to understand when faced with an upcoming expropriation.

The expropriating authority will often try to reach an agreement with a property owner before having to resort to expropriation. But when they cannot come to a resolution, or the owner is not willing to cooperate, the authority has the ability to take what it requires under the Act. At that point the owner will have little control over what land is taken and when, but can negotiate the appropriate compensation amount.

This article will provide a brief overview of what you, a property owner, need to consider when faced with an expropriation. It will help you understand the expropriation process, and what rights you have under the Act both before and after an expropriation takes place.

Pre-Expropriation Negotiations

Months, or even years, before the expropriation process starts the Expropriating Authority will determine what lands it requires and in what capacity. For example, the Expropriating Authority may require an easement to allow them to access and use the land for a short time, or may require a more permanent transfer of parts of the lands to their name.

Before starting any expropriation, the Authority may approach a property owner with an appraisal, and attempt to negotiate a voluntary purchase. If this fails, or the owner refuses, the next step is for the expropriating authority to apply to the Approval Authority for an approval to Expropriate. As the owner of the subject property, you should receive this Notice of Application for Approval in the mail.

The Expropriation Process

Within 30 days of receiving a Notice of Application for Approval to Expropriate Land, an owner has the right to request a Hearing of Necessity. The Hearing of Necessity is held to determine if the expropriation is ‘fair, sound and reasonably necessary’ to achieve the objectives of the Expropriation Authority. The matter is heard by an inquiry officer, an independent, impartial person who is appointed by the Attorney General. There are limitations on what can be heard and decided at this stage, and accordingly, you should consult a lawyer to determine if a Hearing of Necessity is in your best interest.

If no Hearing of Necessity is requested, the Approval Authority will consider the Application, and either grant or refuse the Application to allow the expropriation to continue. Within 90 days of an approval being granted, the Expropriating Authority must register a Plan of Expropriation on title to the lands it requires. Once this Plan is registered, title to the land vests in the Expropriating Authority. The owner will still possess the land, but the legal title or right to access it will belong to the Authority.

Within 30 days of the Plan being registered, a Notice of Expropriation will be sent to the owner. In many cases, this is when you, an owner, will learn about the expropriation occurring on your property. As soon as you receive a Notice of Expropriation, you have 30 days to choose your valuation date. A valuation date can be very important in determining the value of the compensation owed to you. This is something you should speak with your lawyer and appraiser about to ensure you are able to receive the most value for your property.

You will also receive a Notice of Election and Notice of Possession. A Notice of Election allows the owner to elect the date upon which compensation is assessed. A Notice of Possession sets out the date the Authority will be taking possession of the land. According to the Act, the date of possession must be at least 3 months after the serving of the Notice of Possession. The time of possession can be negotiated between the parties and can often be longer than the period prescribed in the Act.

Within 3 months of the Plan being registered on title, you will receive an Offer of Compensation from the Authority. Once you receive an Offer you have two options: first, you may accept the Offer and receive full and complete payment of compensation for the expropriation; or second, you may accept the Offer without prejudice, receive the compensation amount and continue to investigate the valuation further and make any additional claims for compensation. Always speak with a lawyer before accepting any Offers.

Determining Compensation

The type of compensation an owner is entitled to under the Act falls under 6 general areas:

  1. Market value of the land taken;
  2. Damage attributable to disturbance caused by the taking;
  3. Damages for "injurious affection" (includes other personal and business damages);
  4. Damages arising out of any special difficulties in relocating;
  5. Reasonable legal and appraisal fees; and
  6. Interest.

Determining the value of each of these is very technical and requires the appropriate expertise. The total value of compensation should be determined by the appropriate experts, such as an appraiser, who is familiar with the expropriation process. You may also need business valuators, planners, accountants etc., depending on the situation and the nature of the expropriation. Again, this is something that your lawyer can assist you with.

One additional consideration is that, under the Act, an Owner is entitled to recover any reasonable amount spent on negotiating and obtaining the payment of full compensation for the expropriation. This includes the fees that you may incur in retaining lawyers and other experts to obtain their opinion on compensation. However, there are limits to this, so you need to be careful when negotiating and hiring your experts. For more information on the types of compensation that may be available to you, please refer to our article on damages.

If you cannot come to an agreement with the Expropriating Authority regarding the appropriate compensation, you may apply to have the matter decided by the Ontario Municipal Board. The Board will conduct a hearing to determine what the appropriate amount of compensation should be based on the facts of the case and evidence from the various experts.

Abandonment of Expropriation

If for some reason the Expropriating Authority decides it no longer requires the lands it had expropriated, if compensation has not been paid in full, the owner can elect to take back title to the land and to be paid for any consequential damages. Alternatively the owner can require the Authority to keep the land and to take full payment of compensation. If compensation has already been paid, the owner may have a right of first refusal to repurchase the lands the Authority no longer requires.

How to Deal with an Impending Expropriation

As you can appreciate, Expropriation is a very complicated and highly technical process. Although an Authority is given this power by statute, the same statute does require the Authority to provide financial compensation to an owner for any losses the owner suffers as a result of the expropriation.
Your lawyer will help you navigate through the technicalities, keep on top of the time sensitive matters, and ensure your rights are fully protected, while helping you to negotiate a settlement that is fair and just in the circumstances. You should ensure that you keep your lawyer informed of any notices you receive from the Authority as there are very strict time deadlines that must be followed throughout the process.

Finally, you should make sure that any experts you retain are knowledgeable about the expropriation process and have experience presenting before the Ontario Municipal Board. You may find yourself having to defend your claim of compensation before the Board if a resolution cannot be reached with the Authority.

For more information on expropriations, please visit our main page.