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Obtain Compensation for Loss of your Business

When an expropriation occurs, the entire premises where your business operates may be forced to closer, or part of the premises may be impacted. Various impacts can occur which entitle the business to compensation.

Under s.19(1) of the Expropriations Act, businesses that are forced to relocate as a result of an expropriation are entitled to business losses, which are typically determined and calculated after at least a 6-month period operating in the new location. In addition, the business owner is entitled to the costs of relocation and moving, realtor commissions, legal and professional fees. If construction impacts the business, there are also disturbance damages that may be payable due to loss of parking or access to the premises.

The authorities and claimant often disagree on the quantum of the business loss and it is therefore important to retain qualified business loss valuators to assist the business owner. Our expropriation law firm regularly works with specialized experts in the field.

Why do I need a Valuation?

Generally, a Chartered Business Valuator becomes involved in expropriation matters when the taking of real property adversely affects a business. Examples include:

  • Business Closure: When a business’s property is taken and the business is unable to relocate and must close;
  • Business Relocation: When a business’s property is taken and the business is forced to relocate;
  • Business Disruption: When part of the business’s property is taken and the reduced utility of the remaining property results in extra costs for the business; or
  • Construction Loss: in an injurious affection scenario, where no property is taken, but a business is impacted by construction-related activities that occur in close proximity to its property.

In general, these losses exist in one of two categories: past losses and future losses.

Past losses occur between the date of the expropriation and the date of the valuation. Past losses are calculated by assuming that, had the expropriation not occurred, the business would have continued as normal. The CBV will use the historical profitability of the business as the basis of the quantification, adjusted for any industry trends, market trends, and other factors deemed appropriate.

Future losses occur after the date of the valuation. Unlike past losses, future losses are, by their very nature, speculative and involve many assumptions. If the business is unable to continue operating, the CBV may quantify the businesses goodwill [hyperlink to goodwill blog] as the future loss. If the business is able to relocate and continue operations, the CBV may need to estimate how profitable the business will be at the new location, and estimate how far in the future the losses attributable to the expropriation will continue.

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