Expropriation
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Expropriation
Expropriation is a complex process that we have mastered.
Expropriation is a power set out in Quebec’s Expropriation Act that allows public bodies to appropriate an immovable or a dismemberment of the right of ownership in an immovable for public utility purposes.
The expropriating bodies recognized in Quebec are:
- the Quebec government and its ministries,
- the Canadian government and its departments,
- municipalities,
- school boards,
- certain public bodies such as Hydro-Québec and transport companies.
Expropriation concerns the right of ownership of an immovable (building, land, lot). The object of expropriation may also be a dismemberment of the right of ownership attached to it, such as a servitude (of passage, construction, sewer, aqueduct, etc.).
The expropriating body’s first obligation is to adopt a resolution, decree or by-law in order to proceed with expropriation. The expropriator must also submit a detailed plan of the expropriated property. If there are tenants, he must also inform them in the manner stipulated by law. Finally, the expropriator must provide a detailed offer of compensation.
The expropriated party’s first obligation is to inform the expropriating body within 15 days if the property subject to expropriation is occupied by tenants or involves the commercial operation of an enterprise. The expropriated party must also submit a detailed claim to the expropriating party.
An owner has the right to compensation for expropriation. Expropriation compensation is made up of “main compensation” and “accessory compensation”.
The main indemnity corresponds to the value of the expropriated property. This value of the expropriated property is established according to the value to the owner (special value to the expropriated). In this case, the value of the property for the expropriated party is sought, not just its objective market value.
OWNER VALUE CONCEPT1
Compensation to the expropriated party must be based on the concept of “value to the owner”, which takes into account the following conditions in particular:
- it's not just a price, it's an indemnity that must be sought;
- this compensation must fully compensate the expropriated party for the loss suffered as a result of the expropriation;
- the expropriated person is not an ordinary seller who can discuss his price with the buyer as he sees fit;
- the expropriated party is forced to compromise at a time of his own choosing;
- the potential value, included in the market value, must include any element of special adaptability;
- disregard the purpose of the expropriation in seeking compensation.
CONVENIENCE VALUE AND/OR SPECIAL VALUE TO THE EXPROPRIATED PARTY1
Convenience value and/or special value to the expropriated is the value of an asset or right to its owner-user. This is a value that generally exceeds the market value, insofar as it contains the latter, plus a particular value for the owner-user.
We will generally speak of special value to the expropriated when this value can be a particular economic advantage to the expropriated, taking into account the following conditions:
- this advantage derives from factual use;
- it is specific to the expropriated party;
- it is not included in the value elements already calculated.
The term “convenience value” is used when the particular value is a personal value, whether material or in terms of enjoyment, attributed to the property by its owner. It exists as soon as, as a whole or in one of its parts, the property presents a value for the owner or occupant that the average buyer would not take into account. It is linked to certain facilities, conveniences and combinations of locations that are advantageous to him. It differs from special value to the expropriated party in that it does not constitute an economic advantage.
The ancillary indemnity will compensate for losses suffered directly as a result of the expropriation, such as:
- direct moving costs,
- acquisition of replacement goods,
- appraisal costs,
- repair costs for a new building,
- relocation costs.
By demonstrating a direct relationship with the expropriation, other costs could be recognized in the ancillary compensation, such as:
- lost profits,
- lost business opportunities,
- business disruptions,
- troubles and annoyances,
- residue damage.
Proof of this ancillary compensation can be provided by invoices and estimates, as well as by expert appraisals. It is important that the work is always handled in conjunction with the lawyer of record and the accredited appraiser retained.
This value is presented by a certified appraiser, acting as an expert before the Tribunal. Such compensation will be set by the Tribunal if there is no agreement between the expropriator and the expropriated party. The Québec Administrative Tribunal, Real Estate Division, has jurisdiction to hear expropriation cases.
A tenant or occupant acting in good faith may also be entitled to expropriation compensation to offset the direct loss resulting from the expropriation.
1Standards of professional practice of the Ordre des évaluateurs agréés du Québec
