"Home-for-a-Home" Compensation in Expropriation
12/19/2012 8:37 AM
Expropriation legislation in Canada typically contains special “home-for-a-home” provisions whose principle objective is to ensure that the expropriated land owner is not left without a primary residence for his or her family. This article will deal specifically with the Nova Scotia Legislation. The difference from other Canadian jurisdictions may be dealt with in a future article.
Under the Expropriation Act (NS), a family home is the home of the owner that is used by the owner as a family residence together with the land on which it sits, not exceeding one and a half acres. It also includes any nearby outbuildings like a shed or garage. The purpose of the provision is to provide that when a family home is expropriated, the owner will be substantially put back into the same position as before the expropriation.
The Act explicitly recognizes that strict market value is not always a true compensation for a family home in that it may not provide equivalent accommodation to the owner of the family home. As such, the Act is to be broadly interpreted in respect to the expropriation of a family home so that effect is given to the intent and purpose of putting the land owner into the same position as before the expropriation.
The Act directs that where land is being used as a family home by the owner at the time of expropriation, the value of the land expropriated is the amount that will at current costs and prices give the owner the ability to acquire by purchase or construction a home reasonably equivalent to the one that was expropriated. In determining the question of purchase or construction, the Act requires contemplation of whether a reasonably equivalent home can be acquired by purchase or whether the state of the market makes it impracticable to do so. If it is impracticable to acquire an equivalent home by purchase, it may be necessary to award to the expropriated land-owner sufficient compensation for an equivalent home’s construction instead of current market value. Consideration must be given to the time and circumstances in which an owner was allowed to continue to occupy the land after the expropriating authority was entitled to take possession, and also to any assistance given to the expropriated land owner by the expropriating authority to seek and obtain alternative premises.
It has been held in Nova Scotia that the definitions of family home as “the home which is the home of the owner” and “is used by him for his family residence” when read together; emphasize the requirement that these provisions apply to the one home where the owner lives. The owner must either hold the property in fee simple or hold the equity of redemption. All other owners are excluded. The only “owner occupied” land which results in the application for a home-for-a-home compensation, is when the owner is occupying the property as a family home.
In Nova Scotia, the home-for-a-home sections are applicable only to residential properties and not commercial buildings used as a residence. All other occupied properties, such as seasonal cottages or a second family home are not included in the home-for-a-home compensation provisions.
If the total property expropriated from the land owner exceeds the 1.5 acres provided for in the home-for-a-home provisions, then the balance of the property will be appraised and valued using the general rule of compensation by fair market value.
If you have questions or would like to discuss this topic further, please contact Jeremy P. Smith
at Patterson Law at 1-888-897-2001.