In this case, Approved Appraisal Services was retained by the property owner after the expropriation of their 1.2 acre land and site improvements by a regional expropriating body. The client, a local small business owner, and his family had purchased the lands in 2007 and used them for a construction storage yard. In the following years, these lands were required for an assembly of lands for a regional park. The property owner was eventually expropriated under a Section 25 agreement and paid out a value not much higher than their initial purchase price 4 years earlier.

The owners were provided with an appraisal report which highlighted properties throughout the region and focused on a neighbouring commercial property adjacent to the Subject lands. This next door site had sold within a similar time frame of the expropriation and was very close in features and size to the Subject lands. In most appraisal circumstances, one could not argue against a comparable sale in such close proximity, time frame and characteristics as the Subject lands. This opinion was again repeated by a second appraiser hired directly by the property owner and who came in at a value of the Subject lands that was 10% lower than what the expropriating body determined.

On this basis, the client approached our firm to assist them in providing a third opinion of value. When our firm reviewed the file, we immediately recognized a fundamental flaw in the reports. It was our position that the best comparable chosen to compare against the Subject property was one that was “stigmatized” since it was impacted by the “scheme.” This concept is unique to expropriation valuations and required the ability to analyze the market from a hypothetical perspective.

Although the expropriating authority disagreed, Approved Appraisals produced a critical review of the expropriating bodies report as well its own appraisal. It was our professional opinion that the subject lands was a development site “in absence of the scheme,” and supported this opinion with a planning report.

This position was presented to the expropriating body, however it was not accepted and eventually Approved Appraisal defended its critique of the expropriating bodies report and its own separate analysis before the Board of Negotiation. It is the opinion of Approved Appraisals that the Board found merit in its arguments and an inclusive settlement was reached shortly thereafter for approximately 80% over the original amount.

In this instance, Approved Appraisals felt that they was able to “see beyond the box” even where multiple other highly experienced appraisers had not, and argued for a value that was far in excess of what was initially paid to the property owner.

Should you as the property owner be faced with a similar circumstance, we would be happy to assist you in reviewing this position and potentially substantiating it to the courts if necessary.