Casual Legal: What to ignore when determining land value
DISCLAIMER: This article is meant to provide information to Alberta Municipalities members only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated. This content is not intended for the general public.
By Greg Weber
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider
Whenever a municipality expropriates an interest in land, it must pay the owner market value of the land. However, there are instances where the expropriation itself has an effect on market value. At a high level, section 45 of the Expropriation Act requires that the expropriation be ignored in determining value:
45 In determining the value of the land, no account may be taken of
(a) any anticipated or actual use of the land by the expropriating authority at any time after the expropriation;
(b) any value established or claimed to be established by or by reference to any transaction or agreement involving the sale, lease or other disposition of the land, if that transaction or agreement was entered into after the commencement of expropriation proceedings;
(c) any increase or decrease in the value of the land resulting from the development or the imminence of the development in respect of which the expropriation is made or from any expropriation or imminent prospect of expropriation;
(d) any increase or decrease in the value of the land due to the development of other land that forms part of the development for which the expropriated land is taken;
(e) any increase or decrease in value that results from the imposition or amendment of a land use bylaw, land use classification or analogous enactment made with a view to the development under which the land is expropriated.
In the recent case of St. John’s (City) v Lynch, 2024 SCC 17, the Supreme Court of Canada clarified how these sorts of principles apply in a constructive taking. A constructive taking occurs when a municipality acquires a beneficial interest in land and action by the municipality has removed all reasonable uses of the property. Typically, a constructive taking arises from the cumulative effect of several enactments passed over time.
Should all of it be ignored? The Supreme Court clarified that only those enactments which were passed “with a view to expropriation” should be ignored. This largely mirrors section 45(e).
But whether it is a constructive expropriation or a formal one, such issues require legal advice and proper instruction must be provided to the appraiser to ensure the correct circumstances dictate the conclusions on market value.
To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or casuallegal [at] abmunis.ca (email) to reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please call 310-MUNI (6864) or riskcontrol [at] abmunis.ca (email) to connect with Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.
