Most people assume that challenging a government offer means paying a lawyer out of pocket and hoping it works out. In Ontario expropriation, the statute is written to produce close to the opposite result.
The question owners ask first is almost never about valuation. It is about risk. If I hire a lawyer and an appraiser to test this offer, and I lose, what has it cost me? In ordinary civil litigation that is a serious concern. In expropriation it is governed by section 32 of the Expropriations Act, and the answer is different enough that it changes how the whole process should be approached.
The 85 Percent Rule
Where the compensation finally determined is 85 percent or more of the amount the authority offered, the authority is generally required to pay the owner's reasonable legal, appraisal, and other professional costs. Read that threshold carefully, because it is commonly misread. It is not a rule that you must beat the offer by 15 percent. It is a rule that protects you unless the outcome falls well below what was offered.
In other words, if the authority offered you a fair number and the Tribunal agrees with it, you are still generally covered. The costs consequence bites only where an owner pushed a claim that the evidence did not come close to supporting.
"The Act is structured so that an owner with a genuine claim can test the offer without gambling the house on legal fees. That is a deliberate policy choice, and owners should use it."
Why the Legislature Built It This Way
Expropriation is compulsory. Nobody chooses it. The owner did not create the dispute, did not select the timing, and cannot walk away from the transaction. Meanwhile the authority is an institution that does this routinely, with in house counsel and retained appraisers, against an owner who will likely face it once in a lifetime.
A costs rule that exposed owners to the ordinary risks of litigation would hand the authority a decisive advantage: make a low offer, and rely on the owner's inability to fund a challenge. Section 32 is the correction to that imbalance.
What Costs Actually Covers
The provision is not limited to legal fees. It extends to the reasonable costs of the professional evidence a compensation claim actually requires. In a typical file that means an independent appraisal, and depending on the property it can also mean a planner, an engineer, an accountant to quantify business loss, or a relocation specialist. These are the costs that would otherwise deter an owner from claiming heads of compensation the Act plainly allows.
The word doing the work in the section is reasonable. Costs are assessed, not simply reimbursed on presentation. Proportionate, well documented professional work on a real issue is recoverable. An expensive expert retained on a point that was never seriously in play is a harder argument.
One Thing Section 32 Is Not
It is worth being precise about this, because owners are sometimes told otherwise. Section 32 is a costs order made after compensation has been determined. It is not an entitlement to have the authority pay for your appraiser up front, and there is no provision in the Act that requires an authority to fund your professional advice as you go.
What that means in practice is that the costs of the claim are carried during the file and recovered at the end. It is a real and substantial protection, and it is the reason these claims are worth bringing, but it is a recovery mechanism rather than a retainer paid by the other side. How the carrying is handled in the meantime is a conversation to have at the outset rather than an assumption to make.
How This Should Change Your Approach
Practically, the costs rule means the sensible first step is not to decide whether the offer is good, but to have someone independent tell you whether it is. An owner who accepts a first offer without advice has usually declined a second opinion whose cost the Act was likely to make recoverable at the end.
It also means the negotiation carries a different weight than owners expect. An authority knows that if the matter proceeds and the owner does reasonably well, it will be paying for both sides. That is a meaningful incentive to move, and it is why so many expropriation files resolve before the Ontario Land Tribunal ever hears evidence.
Before the Clock Runs
Costs protection does not extend the deadlines. The 30 day window to request a Hearing of Necessity after the Notice of Application still applies, and the compensation claim is time sensitive. If you have received a notice or an offer, our expropriation notice guide sets out the sequence, and the first evaluation is free and confidential.
