The Supreme Court of Canada has ruled that the zoning of a property in St. John’s, N.L., as a watershed area should be the basis for compensating the owners in case of expropriation.
In a unanimous decision on May 10, the Supreme Court stated that compensation should be determined based on the restricted uses permitted by the zoning regulations, rather than assuming potential housing development.
The owners had applied to develop the property in 2013, but their request was denied. Subsequently, a court declared that the land had effectively been expropriated, leading to the question of compensation.
The Supreme Court emphasized that authorities cannot hinder a property’s development in anticipation of acquiring it, which would decrease its value and reduce the compensation owed.
When assessing the impact of regulations on property value, the court highlighted the importance of determining whether the enactment was linked to expropriation or if it was an independent decision.
The Supreme Court’s ruling clarified that the watershed zoning was an independent regulation, and any valuation of the property must consider its limited use for agriculture, forestry, and public utilities.
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