Expropriation, in its simplest form, is the taking of privately owned land by a government body for public purposes. Expropriation often occurs when extensive infrastructure projects need to be completed, such as building roads or schools in areas where land has already been developed and purchased. When land is being expropriated, approval authorities must follow a ridged process; however, this process can be intimidating and it is important for property owners to know about their rights and options.
The Expropriations Act sets out the requirements for taking land. The process typically begins with the expropriating authority identifying the properties that will be affected by the proposed project.
Once identified, the authority may reach out with an offer to purchase the land that they require. At this point, negotiations may occur between the property owner and the expropriating authority. If the owner decides to enter into an agreement with the authority, the land does not need to be expropriated and it is sold voluntarily. There may need to be sign off from a mortgage company or lender as a condition and usually the owner must enter into an agreement that they will keep the terms of settlement confidential, among other things.
The expropriation process begins when the approval authority want to proceed without trying to negotiate, or where attempts to settle have failed. The expropriation authority must go through the process to expropriate as set out in the Expropriations Act which begins with serving a Notice of Application for Approval to Expropriate Land on the owner. Through this Notice, land owners are formally told that their land “may” be subject to expropriation; however once it has gotten to the point of receiving Notice, the authority has probably already determined that the property is needed and will be expropriated.
Owners are able to request a Hearing of Necessity in most cases, which is a hearing to examine only whether the expropriation is “fair, sound and reasonably necessary” for the goals of the expropriating authority. The value of the property is not discussed. A report is issued by the hearing officer for the expropriating authority’s review, who will then decide whether it still wishes to expropriate. Even if the report finds that the proposed taking is unfair, unsound and unnecessary, the land can be expropriated if the authority wants to proceed.
Once the time has passed to request a Hearing of Necessity, or that process has resulted in a decision that the land will be taken, a Notice of Expropriation is given to the owner to confirm that their land is going to be taken along with the dates that the authority will own and possess the land.
When land is being expropriated, the authority is required to pay an owner’s reasonable fees, except in certain circumstances. This could include the cost of hiring an appraiser to complete an analysis to determine/confirm the value of the land, or legal fees to have a lawyer assist you through the process, negotiate with the authority, or bring a Claim.
The expropriating authority must serve an offer to the owner for immediate payment of 100% of the market value of the land. Often times this offer is provided at the same time as the Notice of Expropriation but may come up to 90 days after the Notice. The market valuation is determined by an appraisal report completed by the expropriating authority. Sometimes they will share this report, but often times they will keep it confidential.
An owner can take this offer while still keeping their ability to ask for more money through negotiations or through a Claim to the Ontario Land Tribunal. If an owner does not wish to seek more money, there are usually no further steps to take.
If there is a mortgage or loan on the property, the authority will likely make you get written approval from your lender before they will pay out the offer amount. A bank may require that the land be appraised by an approved person to make sure that the value of the property continues to be enough for their purposes. They may charge you a fee for this. If the lender decides that there are problems with the new value of the property, the lender may require that the money be paid to them to offset the loan debt.
This is an overview of the process and does not cover every step or consideration when land is being expropriated. This is not legal advice. If you have questions about the expropriations process or your rights, please reach out to our office to speak with a lawyer.