Compulsory Purchase Order and Compensation: Negotiating an Agreement
Have you been the subject of a Compulsory Purchase Order? If you have, you need to know what is involved in terms of negotiating the transfer of title and ensuring you are properly compensated.
Negotiations
The agency (purchaser) will initiate negotiations with you or your appointed representative. They will provide an offer in writing stipulating fair compensation for the purchase of the land or property.
The offer may be delivered in person, or via mail and then followed up in person by an intermediary or by telephone. The written offer from the purchaser typically consists of a declaration summarised in writing that will include the following information:
- The amount offered as fair compulsory purchase compensation;
- The description and location of the property, as well as the interest that will be acquired;
- The identification of buildings and other improvements that are to be considered, as part of the real estate.
The representative will give you a reasonable period of time to consider the written offer and to ask questions or request clarification regarding any detail or aspect that is not clear.
If you consider that some important information was not taken into account during the appraisal, you can submit that information at this time. The agency will take account of any reasonable request made.
Partial Acquisition
In cases where there is no need to acquire all of the property that belongs to you. The agency will only buy what is required for the project in question. In cases of partial acquisition, they must specify the amount they will pay to acquire that part. If the agency determines that the rest of the property will have little or no value or use for you, they may consider it as an unprofitable remnant and offer to purchase it.
Agreement between you and the agency
When you reach an agreement with the agency regarding the purchase offer, you will be asked to sign a purchase contract, a deed, or some type of transfer document prepared by the agency.
Your signature(s) will confirm that you and the agency have reached an agreement regarding the property being acquired, as well as the terms and conditions of the said acquisition.
In case an agreement cannot be reached between you and the agency, and all negotiations have been exhausted, the agency will start the expropriation procedures as established in the law.
The agency cannot take any coercive measures so that you accept the offer. Among the prohibited measures are:
- Advance the expropriation process;
- Defer negotiations;
- Postpone the expropriation;
- Any other coercive measure designed to force the owner to agree to an agreement related to the price that must be paid for the property.
Payment
The next stage in the acquisition process consists of the payment in exchange for your property. The agency will have the necessary documents prepared to transfer the title and will manage most of the details throughout the process. The owner must pay off any outstanding loan or property taxes prorated at the time of closing the negotiations, before or at the time of transfer of the title.
Additional expenses will also be covered or reimbursed
The additional expenses are those which are incurred due to the transfer of ownership, such as:
- registration expenses;
- transfer taxes;
- stamps;
- proof of ownership;
- surveys;
- cadastral description of the land or property.
It is always best to seek expert professional advice in cases of compulsory purchase orders and negotiating compensation to ensure not only that your rights are protected, but you also receive a fair and appropriate settlement for your land or property.
