Negotiating Section 30 Agreements
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Under the Ontario Expropriations Act, a property owner can enter into a contract with the expropriating authority known as a Section 30 agreement. Through this agreement, the target property is transferred freely to the government entity taking the land instead of engaging the formal, complicated and drawn-out Expropriations Act process. This is an expropriation transaction, if you will.
A section 30 agreement can be very beneficial to the property owner. These transactions provide compensation more quickly. If the property owner has identified a suitable replacement property on the market, they should be more inclined to enter into a section 30 agreement so they can re-enter the marketplace with their compensation in hand and purchase a new property.
However, section 30 agreements are best entered into when the offers are fair. The property owner must ensure that any section 30 agreement is made on a without prejudice basis so that they retain their right to claim for full and final compensation. If the section 30 agreement is full and final, the property owner must ensure they are fully compensated for their loss. Often times, a property owner will do a section 30 deal, and then commence the Ontario Municipal Board process for full compensation. Again, this process takes time.
Often, section 30 agreements are based on a preliminary real estate appraisal obtained by the authority. Arguably, these appraisal reports seek to provide the least amount of compensation possible. They are preliminary in nature and often rushed and ill-considered. Obtaining your own expert reports to negotiate better Section 30 deal is prudent.
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