Amid 2010 Olympic projections of a booming market for real estate investment, little is said about the other real estate reality -- massive Olympic overhauls may result in expropriation.
By the time British Columbia's Winter Olympics unfold in mid-February 2010, the hype and hoopla will have had significant impact on real estate values, but not all property owners may be happy. Preparations for the Olympics may force some owners to give up their real estate holdings, perhaps for less than what they consider full value.
Expropriation occurs when a public agency (for example, a provincial government or its agencies, regional districts, municipalities, school boards or utilities) takes property for "a purpose deemed to be in the public interest," even though the owner of the property may not be willing to sell it. Any interest in land and improvements, including buildings, may be expropriated. The former owner of the land has the right to receive compensation in place of the land taken, but the owner does not set the price.
In the United States, the compulsory taking of land without consent is generally referred to as "eminent domain" or "condemnation," while in the United Kingdom, it is known as "compulsory purchase."
Often a public agency and a property owner reach mutual agreement as to the amount of compensation the owner will receive and they complete their transaction as if the owner had sold to a private purchaser. However, when the owner does not agree to sell, the agency may expropriate the land.
The power to expropriate is held by many organizations and individuals, but must be granted by statute. In Canada, the federal Expropriation Act and related provincial statutes differ in many areas, including:
The expropriation process
Definitions including "market value"
Methods for determining compensation
The rights of both the owner and the expropriating authority.
"I foresee an increased level of expropriation activity in the Lower Mainland area of British Columbia during the next few years," said expropriation lawyer J. Bruce Melville, explaining that the Lower Mainland includes Greater Vancouver and Whistler where Olympic facilities will be located.
"The increased activity is partly in response to the 2010 Olympics although there are other reasons for it. One of these Olympics-related projects is the upgrading of Highway 99 between Vancouver and Whistler. Land acquisition for this project is presently underway. The project is being handled by the provincial government's Ministry of Transportation. This agency has power to expropriate."
For example, BC's Expropriation Compensation Board recently awarded almost C$37,000 plus interest to owners of a two-acre Kamloops property which backs onto the Trans Canada Highway. The Ministry of Transportation expropriated a 0.4 acre strip for highway widening offering the owners C$23,700 in compensation. They had appealed to the Board with a claim for losses of over C$69,000.
The Victoria-based Board, established as an independent agency in 1988, uses its authority under BC's Expropriation Act to determine the amount of compensation for expropriated land and associated loss when there is a disagreement on these issues during expropriation.
"I do not believe that property owners can or should do anything to plan for the possibility of expropriation until an authority's land requirements are made known to owners," said Melville, who has worked in the field since 1983.
"Often there is plenty of advance notice and community input is sought. The specific impacts on each property owner often cannot be determined until the final design stage. In most cases, owners do not require advice or assistance from expropriation professionals until the authority contacts the owner directly. However, professional advice is very useful from that point forward. In fact, most owners cannot expect to participate in the expropriation process without professional assistance."
Reasonable legal, appraisal and other costs incurred by the owner are usually paid by the expropriating authority.
In 2000, Melville launched The Expropriation Law Centre as a comprehensive online resource on Canadian expropriation law. Designed to stimulate discussion about the expropriation process and determination of compensation, the site continues to include sources of information, access to case law, a directory of expropriation professionals and other information about expropriation. Links to federal and provincial statutes may be found on the Legislation page.