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Compensation When Land is Taken

December 15th, 2017 in Municipal Law


Property owners can be entitled to compensation as the LRT project continues to progress

As the Light Rail Transportation (“LRT”) comes to Ottawa, private owners and businesses are being displaced. Some residents and businesses received expropriation notices, and for others, expect more to come.

Expropriation is the forced taking of land without the consent of the owner. Ontario’s Expropriations Act governs the vast majority of expropriations in Ontario. This blog focuses on compensation that a property owner may be entitled to when land is taken for the construction of the LRT.

Injurious Affection

When an authority expropriates land where a business is located, business loss is evident. The business owner usually has a right to compensation for the value of their land taken and can recover the value of their business loss due to the expropriation. However, under the law, a land owner may also have a right to compensation for expropriation even when only a portion of land is expropriated with negative effects on the value of the remaining property. This is known as the doctrine of injurious affection.

When part of the land is taken by the expropriating authority

Partial takings of land in the context of the LRT include road widening, the taking of easements, and include below grade rights for the LRT. In addition to the market value of the land taken, the owner can be compensated for injurious affection where: (1) there is a decrease in the market value of the remaining land; and/or (2) there are personal and business damages resulting from the construction.

For both private and business owners, the evidence of a professional appraiser is essential in assessing the decrease in market value of the remaining land.

In the context of business owners, the evidence of a business valuator will be critical in establishing whether the business suffered a loss. The loss suffered is calculated as the difference between the cash flows that a business would have earned “but for” the construction work, and the actual cash flows that the business in fact generated.

The Ottawa LRT Project

As the plans and construction of the LRT are in progress, property owners, particularly businesses, located near the proposed LRT line, should review the City’s transportation and land development plans. Businesses affected by the LRT project should consider retaining expert consulting services to ensure their business continues to thrive during the lengthy construction process,

While the LRT has attracted much attention in the City of Ottawa, the expansion of the Queensway and bike lanes can also give rise to the very same issues.

To reach the authors of this blog, Greg Meeds and Marie Kwan, call 613.232.5773.

D. Gregory Meeds is a Partner at Vice & Hunter LLP. He has extensive experience practicing in the areas of municipal and expropriation law. He has represented a wide range of municipalities, developers, and private land owners.

Marie Kwan is an articling student with Vice & Hunter LLP. Prior to completing law school, she obtained an undergraduate degree from the University of Waterloo in Planning, with a specialization in land development. At the firm, she has experience assisting in municipal law and expropriation matters.

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