Introduction

The Supreme Court of Canada stated:

The expropriation of property is one of the ultimate exercises of governmental authority. To take all or part of a person’s property constitutes a severe loss and a very significant interference with a citizen’s private property rights. It follows that the power of an expropriating authority should be strictly construed in favour of those whose rights have been affected.

If a portion of a real property or if an easement is expropriated (taken against the will of an owner), there may be a diminution in value directly related to the real property or to remaining real property.

If there is a diminution in value to the real property, injurious affection has occurred.

Most provincial Acts that deal with expropriation require a Statutory Authority to compensate the owner of land for loss or damage caused by injurious affection and that any advantage to the owner’s remaining land be set-off against the damage.

Compensation for injurious affection should be measured by accepted appraisal techniques and not by the selection of an arbitrary percentage figure.

In Lazar v. Hydro One, Ontario Municipal Board (OMB) File LC010005, June 11, 2002, OMB Decision No. 0781, the issue was to determine if there was “injurious affection” caused by the widening of an easement and the erection of 130-foot metal tower(s) on the easement.

The Lazar property is within 10 kilometres of area ski resorts, golf courses, and beaches on Georgian Bay and the property can be used as a hobby farm or for recreational purposes.

The proposed tower(s) would be 130-foot steel towers and be positioned about 750 feet apart. Due to the proximity of the Collingwood Airport, the tower(s) may need to be lit by red aircraft warning lights.

The appraiser for Hydro One claimed that the tower(s) had no impact on the value of the lands. However, the appraiser for Mr. Lazar conducted a thorough market analysis that supported a negative impact caused by the tower(s).

The OMB was satisfied that the erection of the tower(s) would have an injurious effect on the value of the lands.

The OMB decided that

[the injurious affection] would be in the range of 30% to 54%

and was based on

open market evidence gathered and analyzed by an AACI.

The decision was not appealed.

It is this precedent setting case that will be the focus of this Case Study.

Background and Illustrations

Mr. Joseph Lazar is the registered owner of a 90-acre “hobby” farm. The Lazar farm is traversed by wooden poles and wires situated on an easement.

Hydro One intends to increase the width of the existing easement by 20 feet as well as replace the existing 35-foot high wood poles with 130-foot high metal towers.

The Lazar property is located at:

6678 Nottawasaga 27/28 Side Road, Clearview, Ontario

The Township of Clearview is located approximately 100 kilometres northwest of Toronto and consists of the west portion of the County of Simcoe. The Lazar property is within 10 kilometres of Collingwood, the Blue Mountain ski resorts, golf destinations, and Wasaga Beach on the shore of Georgian Bay.

Ontario Location Illustration

Source: MapPoint®; © 2005 Microsoft Corp.

Area Location Illustration

Source: MapPoint®; © 2005 Microsoft Corp.

Neighbourhood Location Illustration

Source: MapPoint®; © 2005 Microsoft Corp.

Subject Site and Easement Location Illustration

Source: Teranet Enterprises Inc., GeoWarehouse^TM

Aerial Photo Illustration

Source: Ministry of Natural Resources, Ontario.

Easement and Ownership History

The registry abstract revealed the following facts:

Easement: June 8, 1948

Instrument Number 21481 registered June 8, 1948 indicates the property owner granted an Easement to The Hydro-Electric Power Commission of Ontario.

Amount paid: $102.70

The easement is described as:

Two strips of land 100 feet in width for a wood pole transmission line.

Easement: November 7, 1968

Instrument Number P281239 registered November 7, 1968 indicates the property owner granted an easement to The Hydro-Electric Power Commission of Ontario.

Amount paid: $511.20 plus $30.00 for enhanced cutting and trimming rights.

The easement is described as:

33-foot wide easement over existing 100-foot wide easement strip to maintain seven poles and one anchor, with guys and braces, and to string wires thereon.

Deed: May 25, 1979

The Province of Ontario registry abstract, instrument no. 674069 dated May 25, 1979, indicates the Property was acquired by Joseph Paul Lazar and Catherine Elizabeth Lazar. The consideration shown was $81,500.00. The transaction appeared to be at arm’s length. Substantial improvements have been made to the property since purchase.

Deed: December 1, 1986

Deed 929996 dated December 1, 1986 indicates the registered property owner is Joseph Paul Lazar.

Expropriation: May 3, 1994

Expropriation Plan No. 01252818 was registered.

Hydro One intends to construct one or more tower(s) replacing the existing 100-foot wide easement strip with a 120-foot wide easement strip, an increase in width of 20 feet. Hydro One intends to replace seven wooden poles and one anchor, with guys and braces, and with nine string wires, with one or more 230 kV Towers 130-feet in height.

Property and Building Description

On May 3, 1994, the 90-acre site was improved with a circa 1900s stone and wood clad frame building designed and constructed to house a “bank” barn.

The building was refurbished during the 1979 to 1994 era to house a garage, workshop, and single dwelling unit.

There is a fenced area for hobby horses and a small modest frame barn.

The building footprint is 1,808 square feet.

The building consists of 4,583 square feet on five levels including a garage that is 840 square feet.

Mr. Lazar advised that he had made some improvements since May of 1994 such as enlarging the front balcony.It is assumed that the building was in good condition in May of 1994.The building is about 560 feet from the easement.The property use is horse hobby farm and rural dwelling.About 15 acres is a dug pond and reforest area. There are about 13,000 trees, planted circa 1960.

Trees include Norwegian Spruce, Red Pine, White Pine, Scotch Pine.About 75 acres is tillable. This land is used for pasture and hay for horses.The well is a 25-foot dug well. It is precast concrete, three feet wide.The septic is pumped every five to eight years as required.

Before and After – As of May 3, 1994

Hydro One intends to increase the width of the existing easement by 20 feet as well as replace the existing 35-foot high wood poles with 130-foot high metal towers.

Before

There is an existing 100-foot wide easement strip

There are seven wooden poles and one anchor, with guys, braces, and string wires.

Existing wooden poles are about 35 feet in height.

Existing is a 44kV and a 115kV line with Nine string wires.

After

Hydro One intends to construct one or more tower(s) replacing the existing 100-foot wide easement strip with a 120-foot wide easement strip.

Hydro One intends to replace seven wooden poles and one anchor, with guys, braces, and with nine string wires with one or more 230 kV Towers 130-feet in height with six wires.

As of November 2004, the seven wooden poles and one anchor, with guys, braces, and with nine string wires were still in place.

It has been more than 10 years since expropriation occurred on May 3, 1994.

Effects of the Taking – as of May 3, 1994

• Once Hydro One has increased the width of the easement and erected the 130-foot metal towers, the effect on the property will be as follows:
• The fee simple rights will be encumbered to a greater extent.
• The 130-foot metal towers and wires will hinder the view of the Blue Mountains and the Niagara Escarpment. The existing 35-foot wooden poles and wires do not.
• The existing dwelling is about 560 feet from the easement. The marketability of the property will be affected as a result of the construction of the 130-foot metal tower(s) and electrical lines.
• The voltage carried by the lines will increase.
• A “buzzing” noise will be emitted from the electrical lines at 130 feet. This noise will be above a “hum”. The noise will depend on the weather and the observer’s location which would be under or close to a tower. The existing wooden poles and wires are not visibly offensive or noisy. They blend in with the rural landscape and trees and are not unlike telephone poles.
• The proposed tower(s) will have a span between them of about 750 feet. The distance across Lazar’s land is about 1950 feet so there may be more that one tower on the Lazar land.
• Each tower will be able to carry six wires and two shield wires.
• Given that the Lazar home is within a 4-km radius of the Collingwood Airport, the tower(s) may need to be lit by a red aircraft warning light.
• Some buyers may view the 130-foot steel tower(s) and wires as an offensive intrusion into a rural environment. Artisans, weekend retreaters, and others looking to purchase a rural hobby-farm, retreat, or live/work artistic space are purchasers who would most likely not purchase a property traversed by 130-foot tower(s) bearing electrical wires and possibly equipped with airport warning lights.
• The public perceives health risks and other stigmas associated with close proximity to metal towers and wires carrying high voltage electricity.

Market Value Estimates

The following is a timeline outlining the various reports prepared in the Lazar case:

Prior to May, 1994

An appraisal was prepared for Hydro One by AACI “A”. Details not known.

May 3, 1994

Ontario Hydro (later changed to Hydro One Networks Inc.) expropriated the easement.

Instrument 125818 registered on May 3, 1994 indicates Part 1, consisting of 1.2272 hectares or 3.03 acres, was expropriated from Joseph Paul Lazar.

The expropriation was an easement in perpetuity.

June 17, 1994

An appraisal was prepared for Hydro One by an In-House appraiser, AACI “B”, effective date May 3, 1994.

Total compensation estimate: $20,750

Hydro One paid $4,900 to Mr. Lazar notwithstanding their appraiser, AACI “B”, had concluded total compensation of $20,750.

April 20, 1999

An appraisal was prepared for Lazar by Ben Lansink, AACI “C”, effective date May 3, 1994.

Total compensation estimate: $130,000.

April 27, 2000

The Board of Negotiation (BON) serves as an informal tribunal that negotiates compensation settlements in expropriation cases. The BON is a branch of the Ontario Municipal Board (OMB). With no power to impose a settlement, the BON will, where sufficient information has been submitted, provide an opinion about how to reach fair compensation. Subsection 27(5) of the Expropriations Act provides that BON Members must view the property in question prior to, or during, the hearing. If no settlement can be reached, the parties can take their appeal to the OMB.

In Lazar v. Hydro One, the Board of Negotiation held a hearing on April 27, 2000.

Hydro One had previously increased its offer to $30,000 and Lazar countered with an offer of $51,400.

The Board of Negotiation recommended a settlement of $40,700.

Mr. Lazar offered to accept $40,700 but Hydro One refused to accept the Board of Negotiation’s recommendation.

May 10, 2001

Examinations for Discoveries were held and Mr. Lazar was examined by Hydro One.

Hydro One advised Mr. Lazar that it was changing its previous compensation payment of $4,900 to $3,000 and that Mr. Lazar must return a portion of the $4,900 previously paid to him in June 1994.

At this point, Mr. Lazar instructed his lawyer to proceed to a full Ontario Municipal Board hearing.

October 17, 2001

An appraisal was prepared for Hydro One by AACI “D”, effective date May 3, 1994.

Total compensation estimate: $3,000.

March 11, 2002

An appraisal was prepared for Lazar by AACI “E”, effective date May 3, 1994.

Total compensation estimate: $60,000.

June 11, 2002.

The Ontario Municipal Board heard the case and analyzed the appraisals.

Ontario Municipal Board decision:

Total Compensation: $85,751

Plus, reasonable legal and appraisal costs and interest @ 6.0%.

Title		AACI “B”	AACI “C”	AACI “D”	AACI “E”	Ontario Municipal Board
		for Hydro One	Lansink for Lazar	for Hydro One	for Lazar
Easement	Easement Lands Required	3.610	3.610	3.610	3.610	3.610
	$/Acre	$1,802	$2,946	$2,100	$3,000	$3,000
	Value	$6,505	$10,635	$7,581	$10,830	$10,830
	Allocation	75%	100%	39.57%	75%	75%
	Easement Value	$4,879	$10,635	$3,000	$8,123	$8,000
Injurious Affection	Land Area Before	90.0	90.0	90.0	90.0	90.0
	Easement Lands	3.610	n/a	n/a	3.610	3.610
	Remaining Land	86.39	n/a	n/a	86.39	86.39
	Value per Acre	$1,800	$2,946	$2,167	$2,431	$3,000
	Fair Market Value	$155,502	$265,140	$195,000	$210,044	$259,170
	Injurious Affection in %	7.90%	44.60%	0.00%	24.68%	30.00%
	Injurious Affection in $	$12,285	$118,252	$0.00	$51,834	$77,751
	Total compensation	$17,164	$128,888	$3,000	$59,957	$85,751
Conclusion	Other	$3,586	$0.00	$0.00	$0.00	$0.00
	Rounded Total Compensation	$20,750	$130,000	$3,000	$60,000	$85,751

Costs – Estimates of Professional Fees and Disbursements

	Estimated Fees and Disbursements
	Lazar Legal Fees		$140,000.00
	GST		$9,800.00
	Disbursements Taxable		$10,700.00
	GST		$749.00
	Non-taxable		$34.00
	Total Lazar Legal Fees		$161,283.00
	AACI “C”		$34,500.00
	AACI “E”		$42,500.00
	Time & disbursements paid to Lazar per OMB order		$8,200.00
	Total Cost Lazar Consultants		$246,483.00	$246,483.00
	Hydro One Legal, GST & Disbursements		$160,000.00
	AACI “A”		$25,000.00
	AACI “B”		$35,000.00
	AACI “D”		$35,000.00
	Total Costs Hydro One Consultants		$255,000.00	$255,000.00
	Total Professional Costs			$501,483.00
	Award by Ontario Municipal Board		$85,751.00
	Section 25 Payment May 3, 1994		$4,900.00
	Amount Outstanding		$80,851.00
	Interest per Ontario Municipal Board	6.00%	$52,215.24
	Ontario Municipal Board award plus interest			$133,066.24
	Estimated total paid by Hydro One			$634,549.24

Timing

• The Lazar expropriation negotiations started January 1994.
• The Lazar expropriation occurred May 1994.
• The Ontario Municipal Board “costs” decision was issued November 18, 2002.
• It took about nine years to resolve the Lazar Expropriation.

Injurious Affection

In order to determine the detrimental affect or ‘injurious affection’ of an expropriation on the remaining lands of the real property, the appraiser must work within the guidelines of the Expropriation Act for the respective province.

The questions that need to be addressed are:

1. 1. Has the remaining property been harmed or injured by the expropriation? Is there external obsolescence (incurable by the owner)?
2. 2. Is there a reduction in market value…to the remaining land?
3. 3. Is there a set-off?

INJURIOUS AFFECTION

Under the Ontario Expropriation Act, RSO, injurious affection means:

1. where a statutory authority acquires part of the land of an owner,

   1. the reduction in market value thereby caused to the remaining land of the owner by the acquisition or by the construction of the works thereon or by the use of the works thereon or any combination of them, and

   2. such personal and business damages, resulting from the construction or use, or both, of the works as the statutory authority would be liable for if the construction or use were not under the authority of a statute,

2. where the statutory authority does not acquire part of the land of an owner,

   1. such reduction in the market value of the land of the owner, and

   2. (such personal and business damages,

resulting from the construction and not the use of the works by the statutory authority, as the statutory authority would be liable for if the construction were not under the authority of a statute, and for the purposes of this clause, part of the lands of an owner shall be deemed to have been acquired where the owner from whom lands are acquired retains lands contiguous to those acquired or retains lands of which the use is enhanced by unified ownership with those acquired; (“effet préjudiciable”).

EXTERNAL OBSOLESCENCE

External obsolescence addresses factors that influence the property and are normally beyond the control of the real property owner. The Appraisal Institute of Canada defines external obsolescence as:

A temporary or permanent impairment of the utility or saleability of an improvement due to negative influences outside the property.

Types of external obsolescence may involve proximity to a land fill site, steel towers and electrical wires, an airport, a fire station, road works (that result in increased traffic, noise/air pollution, vandalism, theft, trespassing, and litter), a railway corridor, an industrial building next to single dwellings, and many others.

SET-OFFS AGAINST DAMAGES

The Ontario Expropriation Act, RSO, also addresses any advantages to the real property as a result of the expropriation. The monetary benefit of such advantages are subtracted from the damages and are known as “set-offs”.

The value of any advantage to the land or remaining land of an owner derived from any work for which land was expropriated or by which land was injuriously affected shall be set off only against the amount of the damages for injurious affection to the owner’s land or remaining lands.

The value of any advantage to the land or remaining land must be set-off but only against the amount of the damages for injurious affection to the land or remaining lands.

The Market Study

The analyses that follow pertain to properties that suffer from various types of external obsolescence.

• Compensation for a permanent loss to the remaining property as a result of external obsolescence, injurious affection, is best measured by the actions of willing sellers and willing buyers functioning in the open market place. That permanent loss is directly related to the remaining land.
• In these analyses, passage of time is measured by changes in average price. Average Price includes sold residential real property and does not include sold commercial or industrial real property. The source is the Canadian Real Estate Association.
• Some of the market facts were used in the Lazar report, some were not.
• These analyses consider various types of external obsolescence, some of which may differ from the subject property situation.
• External obsolescence may be real or perceived and may be different for each property; however, each example illustrates some type of harm that can be caused to a real property as a result of external obsolescence.
• These analyses are not a Direct Comparison Approach.
• When completing a Direct Comparison Approach, the valuation is based upon direct comparison of similar properties that sold, or if applicable, were listed on the open market.
• None of the following properties is compared to the subject property to estimate market value. In fact, these properties may not be similar to the subject property.
• To determine the external obsolescence, the comparison is in the percentage change of the sold price of the real property before and after the expropriation took place. If required, an adjustment must be made for the passage of time.

In some situations the market value of the real property is estimated; however, any expression of possible value is not a formal opinion of value and therefore not an appraisal as defined by Canadian Uniform Standards of Professional Appraisal Practice.

Injurious Affection – A Market Study

Example Property 1: 4827 Colonel Talbot Road, London

a	Average Price	1994	$135,597
b	Average Price	1994	$135,597
c	Market Change over period	0.00%	$0
d	Possible Value	1994	$502,643
e	Add Market Change	0.00%	$0
f	Possible Value	1994	$502,643
g	Actual Price	1994	$297,000
h	Injurious Affection		-$205,643	-40.91%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		London St. Thomas

1. Expropriation Act, Revised Statutes of Ontario, 1990

2. The Appraisal of Real Estate, Second Canadian Edition, © 2002 Appraisal Institute of Canada

3. Expropriation Act, Revised Statutes of Ontario, 1990. c. E.26, s.23.

4. Canadian Uniform Standards of Professional Appraisal Practice, Definitions

Injurious Affection – A Market Study

Example Property 1: 4827 Colonel Talbot Road, London

a	Average Price	1994	$135,597
b	Average Price	1994	$135,597
c	Market Change over period	0.00%	$0
d	Possible Value	1994	$502,643
e	Add Market Change	0.00%	$0
f	Possible Value	1994	$502,643
g	Actual Price	1994	$297,000
h	Injurious Affection		-$205,643	-40.91%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		London St. Thomas

4827 Colonel Talbot Road, London is a 3,480-sq. ft. high quality home situated on 4.03 acres. This property sold on the open market in October of 1994 for $297,000 or $85.34 per sq. ft. of building including land. Land had been taken for road widening prior to 1994.

4827 Colonel Talbot Road has an entry lane to the 402 starting along its frontage and is also about 200 feet from very visible, very high, steel electrical towers and wires.

The estimated value of 4827 Colonel Talbot Road if it were not close to very visible, very high, steel electrical towers and wires is considered by comparing it to the following three properties.

i) 1962 Commissioners Road West, London

This 3,960 sq. ft. high quality home situated on 7.237 acres sold on the open market in November 1994 for $570,000 or $143.94 per sq. ft. of building including land.

ii) 4 Aspen Street, London

This 3,960 sq. ft. high quality home situated on 6.09 acres sold on the open market in January 1995 for $650,000 or $132.92 per sq. ft. of building including land.

iii) 3513 Homewood Avenue, London

This 3,760 sq. ft. high quality home situated on 4.7 acres sold on the open market in June 1995 for $535,000 or $142.29 per sq. ft. of building including land.

The three very similar properties sold for $143.94, $132.92, and $142.29, respectively, or a median price $142.29 per sq. ft. before adjusting for various elements of comparison. Once adjustments were made, $154.02, $134.92 and $144.42 per sq. ft., respectively, was concluded, suggesting a median price of $502,643 or $144.44 vs. $142.29 per sq. ft. prior to adjustments.

Given that the fair market value of 4827 Colonel Talbot Road was $502,643 assuming location was not a factor and the actual open market price was $297,000, a loss of $205,643 or 40.9% is suggested.

Example Property 2: McGee Side Road, West Carlton (also Acres Sideroad)

a	Average Price	1994	$146,801
b	Average Price	1995	$143,127
c	Market Change over period	-2.50%	-$3,674
d	Possible Value	1994	$315,000
e	Less Market Change	-2.50%	-$7,884
f	Possible Value	1995	$307,116
g	Actual Price	1995	$171,000
h	Injurious Affection		-$136,116	-44.32%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		Ottawa-Carleton

Highway 17, now Highway 417, is to become a four lane controlled access road. The property known as 2620 McGee Side Road is situated at the southeasterly corner of Highway 417 and McGee Side Road one property removed from Highway 417.

To construct an over-pass ramp the road in front of 2620 McGee Side Road had to be elevated in front of the property by about 9 feet.

2620 McGee Side Road is improved with a modern large 3,088-square foot brick veneer bungalow with a fully finished basement and a two-car attached garage. The land area is 7.92 acres.

The property was appraised with a value estimate of $315,000 before the road works and $175,000 after the road works had been completed.

The property owner and the Expropriating Authority could not agree on fair compensation. They did agree on the $315,000 value before the road works and on August 28, 1994 the expropriating Authority purchased the Property for $315,000.

Once the Expropriating Authority had completed the road works, it resold the property on the open market on August 11, 1995 for $171,000, a loss of some 44%. A very small sliver of land was taken. The real property market did not change noticeably during this period and no changes were made to the property.

Example Property 3: 1270 Fairgrounds Road, Clearview

a	Average Price	1995	$113,001
b	Average Price	1996	$119,122
c	Market Change over period	5.42%	$6,121
d	Possible Value	1995	$164,525
e	Add Market Change	5.42%	$8,912
f	Possible Value	1996	$173,437
g	Actual Price	1996	$75,000
h	Injurious Affection		-$98,437	-56.76%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		Georgian Triangle

In February of 1995, Ontario Hydro purchased a 100-acre farm improved with an older frame insul-clad dwelling. The price was $164,525. The property was subject to an existing easement that was about 100 feet in width and improved with poles and electrical wires.

Ontario Hydro increased the width of the existing easement to 120 feet and steel towers and wires replaced the wood poles and wires.

No land was taken.

Ontario Hydro then listed 1270 Fairgrounds Road, Clearview with local Realtor® Paul Fisher. In January 1996 Ontario Hydro sold the property to John Ruppert for $75,000, a loss of 56.76%. There were no changes to the property other than the changes to the easement.

Realtor® Paul Fisher advised that Ontario Hydro paid his firm a commission when 1270 Fairgrounds Road, Clearview was sold to Mr. Ruppert.

Ben Lansink interviewed Mr. Ruppert on April 14, 1999. He advised that he purchased the property on the open market as it had been listed for some time with Realtor® Paul Fisher.

Mr. Ruppert stated that the purchase was conditional upon him accepting an offer made by Ontario Hydro to acquire a similar easement on his “home” farm. As the offer made by Ontario Hydro for the easement on the home farm was at fair market offer, Mr. Ruppert agreed to the condition.

Mr. Ruppert has constructed a new state-of-the-art pork-producing barn on the property and he rents the insul-brick home to a tenant.

Ontario Hydro Realty Services advised that they have a policy of acquiring or selling land only for its fair market value.

Ontario Hydro retains the right, privilege, and easement in perpetuity:

To construct, repair, rebuild, replace, maintain and operate an electrical and communications transmission line (herein called “the line”) including all necessary or convenient towers, poles, guys, anchors, wires, cross-arms, apparatus, accessories and appurtenances belonging thereto, in, over, along and upon the strip.

To cut selectively trees and shrubs on the strip and to keep it clear of all trees, shrubs and brush which may interfere with the safe operation and maintenance of the line.

To clear the strip and keep it clear of all buildings, structures or other obstructions of any nature whatever whether above or below ground including removal of any materials which in the opinion of Ontario Hydro are hazardous to the line. Notwithstanding the foregoing, in all cases where in the sole discretion of Ontario Hydro the safe operation and maintenance of the line is not endangered or interfered with the landowner from time to time or the person or persons entitled thereto may with prior written approval of Ontario Hydro at his or their own expense construct and maintain roads, lanes, walks, drains, sewers, water pipes, oil and gas pipelines, and fences on or under the strip or any portion thereof, provide that prior to commencing any such installation, the landowner shall give to Ontario Hydro 30-days’ notice in writing so as to enable Ontario Hydro to have a representative inspect the site and be present during the performance of the work and that the landowner complies with any instructions that may be given by any such representative in order that such work may be carried out in such a manner as not to endanger, damage or interfere with the line.

To erect, maintain and use bridges and such gates in all fences which are now or may hereafter be on the strip as Ontario Hydro may from time to time consider necessary.

To install below the surface of the strip, at a sufficient depth so as not to interfere with any agricultural operation, and maintain and use an underground conductor or conductors for grounding purposes, with necessary grounding electrodes, when and where required within the strip.

To enter on and to pass and repass at any and all times in, over, along and upon the strip for the servants, agents, contractors and subcontractors of Ontario Hydro with or without vehicles, supplies, machinery and equipment for all purposes necessary or convenient to the exercise and enjoyment of the right, privilege and easement hereby expropriated subject to payment by Ontario Hydro of compensation for any crop or other damage to the person entitled thereto caused by the exercise of this right of entry and passageway.

Example Property 4: 1636 Centre Line, Clearview

a	Average Price	1994	$114,817
b	Average Price	1996	$113,001
c	Market Change over period	-1.58%	-$1,816
d	Possible Value	1994	$337,000
e	Add Market Change	-1.58%	-$5,330
f	Possible Value	1996	$331,670
g	Actual Price	1996	$230,000
h	Injurious Affection		-$101,670	-30.65%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		Georgian Triangle

In April 1994 Ontario Hydro purchased a 150-acre farm improved with an older frame fiberboard dwelling and shed. The price was $337,500. (The actual price was $355,100; however, the affidavit by Ontario Hydro stated the market value was $337,000 and that the difference was for allowances and or entitlements under the Expropriations Act).

The property was subject to an existing easement that was about 100 feet in width and improved with poles and electrical wires.

Ontario Hydro increased the width of the easement to 120 feet and steel towers and wires replaced the wood poles and wires. No land was taken.

In April 1996, Ontario Hydro sold the property to Gerald Trace and Lori Trace for $230,000, a loss of 30.65%. There were no changes to the property other than the changes to the easement.

Ben Lansink interviewed Mrs. Trace on April 14, 1999. She advised that they purchased the property on the open market as it had been listed for some time with Realtor® Paul Fisher.

They have since constructed a new state-of-the-art pork-producing barn on the property and intend to rent the fiberboard clad home to tenants sometime in the future.

Ontario Hydro retains the right, privilege, and easement in perpetuity as stated in the Ruppert case regarding 1270 Fairgrounds Road, Clearview.

Example Property 5: Adelaide Street, London (multiple properties)

Diminution in Value Study – Reconstruction of Adelaide Street

The Corporation of the City of London, an Expropriating Authority, purchased several real properties along Adelaide Street between Hamilton Road and Thompson Road, London. The City then reconstructed Adelaide Street during the late 1990s by widening the road from two lanes to four lanes. With the exception of a small daylight corner at 592 Hill Street, the City did NOT expropriate any land, no land was taken. After the reconstruction, the City sold the purchased properties: (1) under a plan labeled “Affordable Home Ownership Initiative”; and (2) not under the “Affordable Home Ownership Initiative”. This analysis measures the resulting diminution in value (injurious affection), if any, to the real properties as a result of the road widening and resulting increased traffic, etc.

It is important to note that the Corporation of the City of London does not purchase or sell real property unless the price is market value because, as a public body, they do not pay more than market value nor do they sell for less than market value.

Property sold under the “Affordable Home Ownership Initiative” was not exempt from this market value requirement. The City of London advertised its intention to dispose of the land acquired because of the reconstruction of Adelaide Street. The advertisement was placed in the London Free Press, London’s only daily newspaper on September 30, 2000. The ad follows.

The following steps were followed to measure Injurious Affection, if any:

a. Determine the average residential price on the date the Expropriating Authority acquired the property;

b. Determine the average residential price on the date the Expropriating Authority sold the same property;

c. Conclude the market change to the price, if any;

d. State the actual price paid by the Expropriating Authority;

e. Apply the market price change, if any;

f. State the market price assuming no road works;

g. State the actual price when sold by Expropriating Authority

h. Conclude the diminution in value (injurious affection), if any.

A1. 592 Hill Street, corner Adelaide, London

The one- and two-storey brick building at 592 Hill houses a duplex with 3 electric meters. There is also 1400 square feet of retail commercial space facing Adelaide Street. The Expropriating Authority did not take land along Hill or Adelaide; however they did take a small daylight corner at the SE corner of the Property. The City did not sell this property as part of the “Affordable Home Ownership Initiative”. This property previously sold Feb 1990 for $170,000.

At an Ontario Municipal Board hearing in 2004, the City of London stated: 7 parking spaces, 3 in front, after the expropriation, 4 parking spaces, double back to back spaces with none in front of the unit.

On Dec 2, 2004, an inspection indicated 4 tandem spaces (area of sign, van, photo on right above) and 3 at front (between the SUV in both the above photos.

It is important to remember that other than a small daylight corner, no land was taken.

A2. 67 Adelaide Street North, London

This one-floor brick building houses a single dwelling with one electrical meter. The Expropriating Authority did not expropriate or take any land from this Property. The City sold this Property as part of the “Affordable Home Ownership Initiative” at fair market value.

A3. 69 Adelaide Street North, London

This one-floor stucco clad frame building houses a single dwelling with one electric meter. The Expropriating Authority did not expropriate or take any land from this Property. The City sold this Property as part of the “Affordable Home Ownership Initiative” at fair market value.

A4. 71 Adelaide Street North, London

This two-storey brick houses four dwelling units and has four electric meters. The Expropriating Authority did not expropriate or take any land from this Property. The City sold this Property as part of the “Affordable Home Ownership Initiative” at fair market value.

A5. 110 Adelaide Street North, London

This 1.5-storey vinyl frame building houses a single dwelling and has one electric meter. The Expropriating Authority did not expropriate or take any land from this Property, in fact, the building encroaches on the road allowance. The City sold this Property as part of the “Affordable Home Ownership Initiative” at fair market value.

A6. 8 Adelaide Street South, London

This 1.25-storey asbestos clad frame building houses a single dwelling and has one electric meter. There is car access via a rear lane. The entire property is in a flood plain. The Expropriating Authority did not expropriate or take any land from this Property. The City sold this Property as part of the “Affordable Home Ownership Initiative” at fair market value.

A7. 14 Adelaide Street South, London

This 1.5-storey vinyl clad frame building houses a single dwelling and has one electric meter. There is car access via a rear lane. The rear 1/2 of this property is in a flood plain. The Expropriating Authority did not expropriate or take any land from this Property. The City sold this Property as part of the “Affordable Home Ownership Initiative” at fair market value.

A8. 18.5 Adelaide Street South, London

This one- and two-storey masonry building houses three dwellings and has three electric meters. There is car access via a rear lane. The rear 2/3 is in a flood plain. The Expropriating Authority did not expropriate or take any land from this Property. The City did not sell this Property as part of the “Affordable Home Ownership Initiative”. This property previously sold May 1991 for $135,000.

At an Ontario Municipal Board hearing in 2004, the City of London stated: Appraised Feb 11, 2000 as a Triplex, did not conform to R2 zoning, City removed apartment fixtures, kitchen etc, sold as a duplex. Two parking spaces at front lost after road widening.

On Dec 2, 2004, the property was inspected (see photo on right). There are 3 rear parking spaces, there are 3 electrical meters, there are 3 apartment doors and 3 mailboxes. The bldg is a triplex.

There is no record of the City issuing a building permit during the period 1998 to 2003. Given that no land was taken, no on-site parking spaces were lost.

A9. 22 Adelaide Street South, London

This semi-detached one and two-storey brick and asbestos clad frame building houses five self-contained dwelling units. There is car access via a rear lane; however, the lane drops sharply at the rear of this property.

The Expropriating Authority did not expropriate or take any land from this Property. The building encroaches on the road allowance and is situated on the corner of Terrace Street.

The City did not sell this Property as part of the “Affordable Home Ownership Initiative”. Extensively renovated and modernized since sold by City, the property sold in May 2002 for $170,000. A July 15-02 sign stated “Rooms for Rent”.

At an Ontario Municipal Board hearing in 2004, the City of London stated: Appraised in Sep 1999 as a 4 plex unit with a retail store area …City brought bldg under the R2 Zoning, removing the apartment fixtures in a unit on each floor as well as the retail area …to form a duplex. Property sold as a duplex.

When inspected on Dec 2, 2004 (see photo on right) there was a 3 car parking area and the building housed 5 dwelling units, some of which are rented by the room. Owner contact is Joseph at 313-3714.

It is important to note that while the City may have made some alterations, the bldg square footage did NOT become smaller and the income after may in fact be greater than before road works. Also the City stated …a rooming house may have enhanced value.

There is no record of the City issuing a building permit during the period 1998 to 2003.

A10. 31 Adelaide Street South, London

This one-floor vinyl clad frame building houses two dwellings, one is in the basement. There is one electric meter and car access via a rear alley. The Expropriating Authority did not expropriate or take any land from this Property. The City sold this Property as part of the “Affordable Home Ownership Initiative” at fair market value. This property previously sold Nov 1988 for $92,500.

Lansink & McIver Limited File no. 96.09.15

A11. 42 Adelaide Street South, London

This two-storey brick building houses five self-contained dwelling units and has four electric meters. The Expropriating Authority did not expropriate or take any land from this Property. There is car access via a rear alley. The City did not sell this Property as part of the “Affordable Home Ownership Initiative”.

At an Ontario Municipal Board hearing in 2004, the City of London stated …Appraised in May 1998 as a 4-plex with 5 parking spaces …not conforming to the R2 zoning …City removed all apartment fixtures from 2 units and connected the entire first floor …sold as a duplex with parking for two cars.

The property was inspected on Dec 2, 2004. As evidenced by an apartment door count and by mail boxes (see photo on right), it is a 4-plex with 2 tandem and one front car parking.

There is no record of the City issuing a building permit for 42 Adelaide during the period 1998 to 2003.

Adelaide Analyses

Average Price Residential
London & St. Thomas Real Estate Board MLS®
Source: Canadian Real Estate Association
Year			Average Price	Year	Average Price
1997			$131,382	2000	$135,857
1998			$131,299	2001	$137,717
1999			$131,254	Jul-02	$142,302
Average Price means the average price for a typical residential real property on any day during the year stated.
A1	592 Hill Street, London
	a	Average Price	1998	$131,299
	b	Average Price	2001	$137,717
	c	Market Change over period		$6,418	4.89%
	d	Actual Price	1998	$157,500
	e	Add Market Change	4.89%	$7,699
	f	Possible Value	2001	$165,199
	g	Actual Price	2001	$103,500
	h	Injurious Affection		-$61,699	-37.35%
A2	67 Adelaide Street North, London
	a	Average Price	1998	$131,299
	b	Average Price	2001	$137,717
	c	Market Change over period		$6,418	4.89%
	d	Actual Price	1998	$90,000
	e	Add Market Change	4.89%	$4,399
	f	Possible Value	2001	$94,399
	g	Actual Price	2001	$64,800
	h	Injurious Affection		-$29,599	-31.36%
A3	69 Adelaide Street North, London
	a	Average Price	1998	$131,299
	b	Average Price	2001	$137,717
	c	Market Change over period		$6,418	4.89%
	d	Actual Price	1998	$85,000
	e	Add Market Change	4.89%	$4,155
	f	Possible Value	2001	$89,155
	g	Actual Price	2001	$45,000
	h	Injurious Affection		-$44,155	-49.53%

A4	71 Adelaide Street North, London
	a	Average Price	1998	$131,299
	b	Average Price	2001	$137,717
	c	Market Change over period		$6,418	4.89%
	d	Actual Price	1998	$100,000
	e	Add Market Change	4.89%	$4,888
	f	Possible Value	2001	$104,888
	g	Actual Price	2001	$60,750
	h	Injurious Affection		-$44,138	-42.08%
A5	110 Adelaide Street North, London
	a	Average Price	1998	$131,299
	b	Average Price	2001	$137,717
	c	Market Change over period		$6,418	4.89%
	d	Actual Price	1998	$90,000
	e	Add Market Change	4.89%	$4,399
	f	Possible Value	2001	$94,399
	g	Actual Price	2001	$76,000
	h	Injurious Affection		-$18,399	-19.49%
A6	8 Adelaide Street South, London
	a	Average Price	1998	$131,299
	b	Average Price	2001	$137,717
	c	Market Change over period		$6,418	4.89%
	d	Actual Price	1998	$75,000
	e	Add Market Change	4.89%	$3,666
	f	Possible Value	2001	$78,666
	g	Actual Price	2001	$65,000
	h	Injurious Affection		-$13,666	-17.37%
A7	14 Adelaide Street South, London
	a	Average Price	1998	$131,299
	b	Average Price	2001	$137,717
	c	Market Change over period		$6,418	4.89%
	d	Actual Price	1998	$92,500
	e	Add Market Change	4.89%	$4,521
	f	Possible Value	2001	$97,021
	g	Actual Price	2001	$66,600
	h	Injurious Affection		-$30,421	-31.36%

A8	18.5 Adelaide Street South, London
	a	Average Price	1999	$131,254
	b	Average Price	2000	$135,857
	c	Market Change over period		$4,603	3.51%
	d	Actual Price	1999	$115,000
	e	Add Market Change	3.51%	$4,033
	f	Possible Value	2000	$119,033
	g	Actual Price	2000	$72,000
	h	Injurious Affection		-$47,033	-39.51%
A9	22 Adelaide Street South, London
	a	Average Price	1999	$131,254
	b	Average Price	2000	$135,857
	c	Market Change over period		$4,603	3.51%
	d	Actual Price	1999	$108,000
	e	Add Market Change	3.51%	$3,787
	f	Possible Value	2000	$111,787
	g	Actual Price	2000	$60,000
	h	Injurious Affection		-$51,787	-46.33%
A10	31 Adelaide Street South, London
	a	Average Price	1998	$131,299
	b	Average Price	2001	$137,717
	c	Market Change over period		$6,418	4.89%
	d	Actual Price	1998	$105,000
	e	Add Market Change	4.89%	$5,132
	f	Possible Value	2001	$110,132
	g	Actual Price	2001	$45,000
	h	Injurious Affection		-$65,132	-59.14%
A11	42 Adelaide Street South, London
	a	Average Price	1998	$131,299
	b	Average Price	2000	$135,857
	c	Market Change over period		$4,558	3.47%
	d	Actual Price	1998	$120,000
	e	Add Market Change	3.47%	$4,166
	f	Possible Value	2000	$124,166
	g	Actual Price	2000	$72,000
	h	Injurious Affection		-$52,166	-42.01%

Adelaide Conclusion

No.	Address	Diminution	Affordable Initiative
A1	592 Hill Street, London	-37.35%	No
A2	67 Adelaide Street North, London	-31.36%	Yes
A3	69 Adelaide Street North, London	-49.53%	Yes
A4	71 Adelaide Street North, London	-42.08%	Yes
A5	110 Adelaide Street North, London	-19.49%	Yes
A6	8 Adelaide Street South, London	-17.37%	Yes
A7	14 Adelaide Street South, London	-31.36%	Yes
A8	18.5 Adelaide Street South, London	-39.51%	No
A9	22 Adelaide Street South, London	-46.33%	No
A10	31 Adelaide Street South, London	-59.14%	Yes
A11	42 Adelaide Street South, London	-42.01%	No
Median		-39.51%

The percentage diminution in value varies as no two real properties are alike nor are two purchasers’ requirements alike. A property sold under the Affordable Home Ownership Initiative does not suggest greater or lower diminution in value than a non-Affordable Home Ownership Initiative sold property.

It has been stated and argued that:

1. the 5% down payment was sweat equity;

2. family income had to be less than $39,000;

3. first time home buyers; and

4. limited number of bidders.

Response:

1. the 5% down payment was sweat equity: perhaps, but this is not unusual, there was ample 100% mortgage money available;

2. family income had to be less than $39,000: a family making a higher income would probably not purchase a home in this neighbourhood, hence this restriction did not affect the market price (average family income in London in 2001 was $47,705);

3. first time home buyers: There are many first time home buyers, this restriction would not affect market value; and

4. limited number of bidders: perhaps, however it is reasonable to assume that there would be a limited number of bidders because of the Adelaide location.

There was an increase in traffic, turning left onto Adelaide from a private driveway became more difficult and not possible at certain times, trespassing increased, litter increased, and noise-air pollution increased, real or perceived, results in a diminution in value to a real property fronting Adelaide. This diminution occurred even if there was no taking of land.

The City argued that some of the properties show a decrease in value as a result of actions by the City such as converting a 4-plex to a 2-plex. However, the City has also acknowledged that “the value may have increased as a result of use change”. The appraiser for the City stated that because there is less income from a 2-plex vs. a 4-plex, a 2-plex is worth less than a 4-plex, value went down.

However there is no evidence building income went down, in fact, building income may have increased.

As of June 1998, under the new Tenant Protection Act, RSO when a tenant moves out of an apartment, the landlord is free to negotiate a new fair-market rent with the new tenant. Once the new rent is set, the new tenant is protected by rent control.

Because a Unit was eliminated by the City, the tenant had also vacated, hence it is reasonable to assume rent increased and did not decrease given that a new tenant occupied the even larger space after the property had been sold by the City.

The property 42 Adelaide was inspected on Dec 2, 2004. As evidenced by an apartment door count and by mail boxes, the building is a 4-plex, NOT a 2-plex. While the City may have made some interior alterations of some obsolete fixtures, the building’s useable square footage did not change and the buyer was able to install new fixtures. In addition the buyer would be able to rent at market rent.

There is no evidence that the City of London issued a building permit for an Adelaide Street building it says it altered.

Municipal Act

Municipalities do not give equity gifts to persons. They sell real property only at fair market value.

Section 193.(4) of the Municipal Act states:

(4) Conditions.—Before selling any real property, every council and local board shall,

(a) by by-law or resolution passed at a meeting open to the public declare the real property to be surplus;

(b) obtain at least one appraisal of the fair market value of the real property; and

(c) give notice to the public of the proposed sale.

It is important to note that, historically, the Corporation of the City of London, when purchasing or selling real property, does not pay more than market value nor does it sell for less than market value.

Example Property 6: 808 Riverside, London

a	Average Price	1989	$129,087
b	Average Price	1994	$135,597
c	Market Change over period	5.04%	$6,510
d	Actual Price	1989	$205,000
e	Add Market Change	5.04%	$10,338
f	Market Price	1994	$215,338
g	Actual Price	1994	$180,000
h	Injurious Affection		-$35,338	-16.41%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		London St. Thomas
Adjusted to reflect the fact that the Actual 1989 Price was not a “No Dedication” Open Market Price because Road Widening had been disclosed to the purchaser and also the fact that dedication had not occurred and may not occur.				-25%

A developer purchased 808 Riverside Drive, London in 1988, lot size 120 x 175 feet. He applied for and was granted a severance, by the London Consent Authority, to sever a rear lot 66.21 feet x 120 feet leaving 120 x 108.79 feet for 808 Riverside.

As a condition of severance, the Developer was required to enter into a Road Widening Dedication Agreement (registered March 89, No. 829858) with the City of London.

The road widening may apply to 808 Riverside at some future date, however as at July 2004, deeding of the Land to the City had not occurred.

In September of 1989, the property 808 Riverside Drive, lot 120 x 108.79 was sold on the open market, MLS® no. 55651, by the developer to Holdsworth for $205,000. Given that dedication disclosure was made to Holdsworth it is reasonable to assume the market price had been discounted to $205,000 because dedication is to occur in the future.

Holdsworth resold 808 Riverside to McConnell in Dec 1994 for $180,000, on the open market, MLS® no. 158364.

The land had been dedicated when sold to McConnell but road widening and deeding to the City of London had not occurred, hence purchaser could not physically see the road widening effects nor would the purchaser know when or if the City would require the dedication portion for future road works.

The Injurious Affection indicated does not reflect the Fair Market Value NO ROAD WIDENING DEDICATION, in fact Holdsworth probably paid less than fair market value as Holdsworth was aware of the future possible dedication.

Example Property 7: 465 Ridout Street, London (at Commissioners)

a	Average Price	2000	$135,857
b	Average Price	2003	$153,637
c	Market Change over period	13.09%	$17,780
d	Actual Price	2000	$170,000
Adjusted to reflect Realtor®’s fees, moving costs and the fact it did not sell on the open market, purchased under threat of Expropriation.			15.0%
Adjusted Price			$195,500
e	Add Market Change	13.09%	$25,586
f	Adjusted Market Price	2003	$221,086
g	Actual Price	2003	$160,000
h	Injurious Affection		-$61,086	-27.63%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		London St. Thomas

In 2000 the City of London purchased 465 Ridout Street for $170,000. The vendors sold under threat of expropriation, hence it was not an open market sale. The vendors did not pay Realtors® commission and the City paid the vendors a moving allowance.

In the open market place, vendors typically pay Realtors® fees and all moving costs.

Adjusted, the vendors received an open market price of $195,500 ($170,000 + $25,500), in other words the vendors effectively received $195,500 but it is assumed they had to pay Realtors® fees and all moving costs similar to a typical open market sale.

The City purchased 817 M2 or 8,794 F2 and used 151 M2 or 1,625 F2 for the widening of Ridout and Commissioners Road East.

In 2003 the City of London sold 465 Ridout Street consisting of 666 M2 or 7,169 F2 for $160,000 with the City, as vendor, reportedly paying Realtors® commission, which is typical of the open market.

Note that the building was constructed facing Commissioners Road, however ingress egress is from Ridout Street The building footprint hugs its northerly boundary, hence it sits as far as possible from the Commissioners Road road allowance which results in a normal appearing front yard.

Example Property 8: 439 Commissioners Road East

a	Average Price	1990	$134,920
b	Average Price	2000	$135,857
c	Market Change over period	0.69%	$937
d	Actual Price	1990	$430,000
e	Add Market Change	0.69%	$2,986
f	Market Price	2000	$432,986
g	Actual Price	2000	$300,000
h	Injurious Affection		-$132,986	-30.71%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		London St. Thomas
Note: It has been reported that the City of London paid the 2000 purchaser about $90,000 for land, injurious affection etc. which means the purchase price was about $210,000.
a	Average Price	1990	$134,920
b	Average Price	2000	$135,857
c	Market Change over period		$937	0.69%
d	Actual Price	1990	$430,000
e	Add Market Change	0.69%	$2,986
f	Market Price	2000	$432,986
g	Actual Price	2000	$210,000
h	Injurious Affection		-$222,986	-51.50%
Rounded, the injurious affection is:				-40.00%

MLS® No. 74493 indicates 439 Commissioners Rd East, lot size 44,141 square feet, sold on the open market September 1990 for $430,000.

The need to widen Commissioners Rd was identified in the Transportation Plan Review adopted by the City in 1994 (Source: Hearing for Necessity Report). Hence the public was aware of pending road widening since 1994 and it is reasonable to conclude the owner of 439 Commissioners was also aware.

MLS® no. 263174 indicates the property sold on the open market Jan 2000 for $300,000.

When it was disclosed to the purchaser that the City of London was in the process of expropriating a strip of Land for Road widening, the City agreed to pay about $90,000, hence the actual registered price was $211,080, say $210,000 rounded, not $300,000 as negotiated on the open market. The land area of 44,141 square was reduced to 42,894 square feet.

Example Property 9: 253-255 Commissioners Road East, London

33R-14706	Part	M2	F2	Purchaser-Owner	F2
	1	2,899.70	31,212.11	Brocklehurst-Mortimer	31,212.11
	2	2,119.90	22,818.41		22,818.41
	3	1,091.40	11,747.73		11,747.73
	4	140.70	1,514.48		1,514.48
	5	63.90	687.81	Dedicated to City – about 10 Feet wide	0.00
	6	9.60	103.33		0.00
	7	9.60	103.33		0.00
	8	44.70	481.15		0.00
	9	23.90	257.26	Brocklehurst-Mortimer	257.26
	10	22.80	245.42		245.42
Square Feet Dedicated to City			1,375.63
Total Square Feet Purchased by Brocklehurst-Mortimer					67,795.41
Purchase Price (two Deeds)					$230,000
$ paid per square foot					$3.39
Possible Value – Lot suitable for single detached dwelling use – Dec 1999.
No.	Location	Date Sold	Price	Square Feet	$/S.F.
i	173 Base Line Rd	May-99	$100,000	17,117	$5.84
ii	692 Hillcrest	Jun-99	$82,000	12,465	$6.58
iii	1103 Riverside	Oct-99	$62,500	13,498	$4.63
iv	1099 Riverside	Oct-99	$62,500	10,000	$6.25
v	26 Old Mill Ct	Feb-00	$90,000	10,000	$9.00
Median Price					$6.25
The subject sites were much larger at about 33, 900 s.f. each, hence a downward adjustment is made.					25.0%
Adjusted Median Price					$4.69
Injurious Affection:
a	Average Price	1999	$131,254	Note: There are lot sales at about $18.00 per SF located on Edwin which is close to 253-255 Commissioners, however these sales did not occur until July 2001.
b	Average Price	1999	$131,254
c	Market Change over period	0.00%	$0
d	Actual Price	1999	$3.39
e	Add Market Change	0.00%	$0
f	Market Price	1999	$3.39
g	Market Value	1999	$4.69
h	Injurious Affection		$1.30	38.27%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		London St. Thomas

The owner of 245 Commissioners Road East applied to rezone his 3.25 acre property for medium density residential. He did not succeed.

He applied for and was successful in severing two lots (69,171 s.f. total) each suitable for single detached dwelling construction and use.

The two lots, 253-255 Commissioners, were sold to Mortimer/Brocklehurst December 1999 for $115,000 each or $230,000 for both or $3.39 per square foot for 67,795.41 square feet total, a total of 1,375.62 square feet being dedicated to the City for Road widening.

The purchasers were aware the road would be enlarged to four lanes, there would be a new sidewalk and bicycle path along the front of their land. They constructed their home with the footprint close to the rear lot line, in other words the home sits well back from Commissioners.

Example Property 10: 293 Commissioners Road East

a	Average Price	2000	$135,857
b	Average Price	2004	$167,576
c	Market Change over period	23.35%	$31,719
d	Possible Value	2000	$304,000
Possible Value = Bldg F2 x Value $/F2 Bldg including Land. Values range from $90 to $130 by various appraisers.		2432
		$125.00
		$304,000
e	Add Market Change	23.35%	$70,976
f	Market Price	2004	$374,976
g	Actual Price	2004	$285,000
h	Injurious Affection		-$89,976	-24.00%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		London St. Thomas

On April 19, 2001 via deed ER101278 the City of London acquired about 12% or 3,466 F2 from a 25,683 F2 site for the purpose of widening Commissioners Road from two lanes to 4 and 5 lanes.

The quality building consists of 2,432 F2 and had been appraised for the city at $265,000 based on 2,246 F2 or about $118 per F2 Bldg including land. Based on many appraisal reports for the period late 2000 and 2001, a value range from $90.00 to $130 per F2 is indicated. It is reasonable to assume a value of $125.00 for 293 Commissioners given its quality and its large land area. This results in an end of 2000 fair market value of $304,000.

The remaining 29,149 square foot property with its 2,432 F2 dwelling was listed on the MLS® system no. 343450 on June 1, 2004 for $329,000. The listing was cancelled on Sept 15, 2004 and listed the same day Sept 15, 2004 for $299,000, MLS® no. 349901.

The property sold Sept 28, 2004 for $285,000.

Example Property 11: 10 Rudy (289 Commissioners), London

a	Average Price	2000	$135,857
b	Average Price	Jun 2004	$166,624
c	Market Change over period	22.65%	$30,767
d	Possible Value	2000	$344,500
Possible Value = Bldg F2 x Value $/F2 Bldg including Land. Values range from $90 to $130 by various appraisers.		2756
		$125.00
		$344,500
e	Add Market Change	22.65%	$78,018
f	Market Change over period	Jun 2004	$422,518
g	Actual Price	Jun 2004	$295,000
h	Injurious Affection		-$127,518	-30.18%
Average Residential Price Source:		Canadian Real Estate Association
Average Price Area:		London St. Thomas

On Jan 8, 2001 via deed ER90504 the City of London acquired about 10% or 3,432 F2 from a 34,541 F2 site for the purpose of widening Commissioners Road from two lanes to 4 and 5 lanes.

The quality building consists of 2,756 F2 and had been appraised for the city at $265,000 based on 2,760 F2 or about $96.01 per F2 Bldg including land.

Based on many appraisal reports for the period late 2000 and 2001, a value range from $90.00 to $130.00 per F2 is indicated.

It is reasonable to assume a value of $125.00 per F2 for 10 Rudy given its quality and its large land area. This results in an end of 2000 fair market value of $344,500.

The remaining 31,118 square foot property with its 2,756 F2 dwelling was NOT listed on the MLS® system.

The property sold June 2004 for $295,000.

Injurious Affection – Conclusion

Property		Land Taken	% Loss
1	4827 Colonel Talbot Road, London	No	-40.91%
2	2620 McGee Side Road, West Carlton	No	-44.32%
3	1270 Fairgrounds Road, Clearview	No	-54.13%
4	1636 Centre Line, Clearview	No	-30.65%
5	Adelaide Street, London	No	-39.51%
6	808 Riverside, London*	Not on Sale Date	-25.00%
7	465 Ridout Street, London	Yes	-27.63%
8	439 Commissioners Road East	Yes	-40.00%
9	253-255 Commissioners Rd. East	No	-38.27%
10	293 Commissioners Rd East	Yes	-24.00%
11	10 Rudy (289 Commissioners)	Yes	-30.18%
		Median	-38.27%
Rounded Injurious Affection			-38.00%
*Land dedicated but not deeded, road widening had not occurred and may not occur for many years, hence purchaser could not physically see effect.

Under “Land Taken”, “No” means that no land was taken for the proposed works. It would appear that there is a reduction in market value even though land was not taken.

At 2004 Ontario Municipal Board hearings, owners along Commissioners Road East in London complained that when the road was reconstructed from 2 to 4 and 5 lanes along with a bicycle lane and a sidewalk, there was an increase in traffic, turning left onto Commissioners Road from a private driveway became more difficult and not possible at certain times, trespassing increased, new incidents of theft occurred, litter increased, and noise and air pollution increased. Strangers would appear in rear yards where this had not occurred prior to the expropriations.

Based on the analyses carried out, there is NO evidence to support an argument that the percentage or dollar amount of injurious affection is affected by the building-to-road set-back distances. It does not seem to matter if the building is inches from the road allowance (see Adelaide Street, London) or if the building is set back more than 100 feet from the road allowance (see 439 Commissioners Road East, London) or if setback or road construction is not an issue (see 1270 Fairgrounds Road, Clearview and 1636 Centre Line, Clearview).

In this study, the open market indicates that the injurious affection is a result of proximity to steel towers and electrical wires and road works that resulted in increased traffic, noise/air pollution, vandalism, theft, trespassing, and litter.

The effects can be real or perceived.

It would appear that the open market is more concerned about increased traffic, noise, pollution, vandalizing, litter, metal towers and wires that will hinder a view, etc. than the loss of a portion of the real property or the taking of an easement.

Reduction

Market evidence suggests that the remaining property has been harmed or injured by the expropriation. There is external obsolescence that is incurable by the owner.

In this study, a reduction of 38.0% of the market value of the remainder is supported by the open market place.

Set-Off

There is no apparent advantage to the remaining land as a result of the expropriation and there is no set-off.

The reader is cautioned that each expropriation will be different and each situation must be analyzed on its own merits.

Author and Presenter:

Ben Lansink, AACI, P.App

Lansink Appraisals and Consulting