Tenant Claims in Expropriation
The Expropriations Act prescribes various compensation entitlements for the owners of expropriated lands. Tenants of expropriated lands, including commercial tenants, are considered “owners” under the statute. For example, the tenant of a retail plaza that is subject to an expropriation is entitled to claim compensation for damages or business losses caused by the taking.
Often, tenant claims arise as “disturbance damages”. Disturbance damages can include a tenant’s moving costs if relocation is required, as well as business losses incurred as the result of the expropriation. The Expropriations Act notes that when determining the compensation of a tenant, there shall be regard to the length of the term of the lease, the portion of the term remaining, any rights of renewal or the reasonable prospect of renewal, the nature of the business and the extent of the tenant’s investment in the land.
These factors are meant to prescribe a contextual analysis in determining compensation for tenants and have been applied in a number of cases, including a 2006 decision entitled Murfin (c.o.b. Kingsdale Animal Hospital) v. Ontario (Ministry of Transportation). In Murfin, the OMB awarded the tenant disturbance damages for its relocation of a purpose-built animal hospital. In that case, the length of the term remaining on the lease was a key factor in the compensation award.
The Expropriations Act is intended to provide full and fair compensation for those impacted by compulsory land takings, including tenants/business owners.