Attention real estate investors! Potential changes to the expropriation laws in Quebec, specifically in the metropolitan area of Montreal which are expected to be presented in a bill by the Minister of Transportation, Geneviève Guilbault, could have a significant impact on real estate investments in the region.

Currently, the indemnity paid to property owners during expropriation is based on the concept of “owner’s value.” However, the new legislation aims to shift towards determining compensation based on the market value of the expropriated property. This change, from the city’s perspective, intends to ensure fairness and reasonableness in the compensation process. 

Property owners, and especially real estate developers could however be faced with a loss in profit over this new evaluation standard. Preliminary findings suggest that under the proposed changes, compensation received from an expropriation of a commercial property could be approximately 26% lower. Similarly, expropriating a golf course could reach up to 43%, and for a residential building, it could result in a difference of $28,300 in favor of the expropriating party.

These modifications come in response to long-standing requests from the Communauté métropolitaine de Montréal (CMM) and the Union des municipalités du Québec (UMQ). The CMM has been advocating for changes to protect natural environments and prevent speculation by basing compensation on current market value rather than potential land value. 

They particularly highlight the transformation of golf courses into parks as an example. The UMQ also raised concerns about the arbitrary nature of the compensation process and recommended using the market value of the property, including ancillary compensations, as the basis for determining indemnity.

The Quebec government has been actively pursuing changes to the expropriation laws, recognizing the need for a comprehensive review. With the aim of reducing delays, the bill by Minister Guilbault will also streamline the expropriation process. This should, in theory, be a positive for real estate development.

This initiative aligns with previous legislative efforts that relaxed expropriation rules for infrastructure projects like the Réseau express métropolitain, the tramway in Quebec City, and the accelerated realization of various infrastructure projects through the 2020 law.

While the proposed changes seek to balance the rights of property owners and prevent speculative practices, they also aim to provide greater clarity and consistency in the expropriation process. 

I encourage you to review the full article for a more detailed understanding of the proposed modifications. Should you have any questions or require further assistance in navigating the evolving real estate landscape, please do not hesitate to reach out. Our team and I are here to assist you.