In Ontario, if the government or another public authority takes your land, you are entitled to compensation. That compensation may include more than just the value of the expropriated land.
Depending on the situation, you may also be entitled to compensation for disruption, business losses, relocation problems, or a decrease in value to the rest of your property. The goal is simple: you should be put in the same financial position you would have been in if the expropriation had not happened.
In practice, compensation usually falls into a few main categories. The first two cover the land itself and the disruption of moving; the last three deal with the losses an expropriation leaves behind on the property you keep.
1. The value of the land taken
The starting point is the market value of the land the government takes. Market value usually means what the land would sell for in the open market between a willing buyer and a willing seller.
If the government only takes part of your property, this category usually covers the value of the specific piece taken, not the value of the entire property.
2. Disturbance damages
You may also be entitled to compensation for the disruption caused by the expropriation. These are called disturbance damages. This may include moving costs, relocation expenses, operational disruption, or other such financial losses caused by the taking.
However, these losses must be proven. In simple terms, you must show that the loss was real, caused by the expropriation, and not something you could have reasonably avoided.
3. Loss in value to the rest of your property
Sometimes the government only takes part of your land, but the land left behind becomes less valuable. This type of loss is called injurious affection. For example, the remaining property may lose road access, become harder to use, become oddly shaped, or become less attractive to future buyers.
Put simply, if the government takes part of your land, and the rest of your property is now worth less because of it, you may be entitled to compensation for that loss.
4. Special relocation problems
Some properties are harder to replace than others. If the expropriation creates special difficulties in finding a comparable replacement property, those losses may also be considered. This can be especially important where the property has a unique location, layout, business use, or other special features.
5. Other damage caused by the project
This is the second side of injurious affection. Category 3 deals with the lost value of the land you keep; this category deals with the actual damage the project causes to you or your business. Injurious affection can also cover certain personal or business losses caused by the expropriation or construction work.
For example, this may include crop damage, structural damage from construction, or business losses caused by a forced closure or serious interference with the property.
A claim for market value and injurious affection must be made in writing within one year — miss that window and an otherwise strong claim can be lost entirely.
Do not assume the first offer is the final answer
If you receive notice that the government wants your land, do not assume the first offer covers everything you may be owed. You may be entitled to more than just payment for the land taken. Depending on the facts, your claim may include disruption costs, injurious affection damages and other financial losses caused by the expropriation.
However, there is an important deadline. A claim for market value and injurious affection must be made in writing within one year after the damage happened or became known to the owner — this is usually upon receiving a notice of expropriation. If that deadline is missed, your claim may be barred. In other words: miss that one-year window and an otherwise strong claim can be lost entirely, so the notice you receive is not something to set aside for later.
Because that one-year deadline is unforgiving, it is worth understanding what you are owed before you respond to any offer. Presvelos Law P.C. can review your notice and tell you where you stand.