BUSINESS EXPROPRIATION

For a business: Expropriation ends your lease. Ending the lease crushes your intangible assets which is likely to be 50% to 90% of your business value.
Most lawyers don’t understand “intangible assets” and the expropriation people are not going to give proper value to your major assets which are “intangible” and you could easily be cheated.

There is an old saying “it is not so much about the size of the dog in the fight but the size of the fight in the dog” and we believe that is especially true with lawyers and expropriation cases.

(1) The first thing we will do is evaluate your business and give it a value with the lease in place.
(2) Second, we will show what value is left after your lease is taken away.

Here are some considerations:

Your leasehold improvements worth $300,000 in your current location may have little value in a new location (if you can even find a new location where your business can be successful)
What is your “normalized net income” going to be worth in a new location? Maybe nothing as there is no guarantee there will be any net income.
What is your inventory going to be worth if it has to be liquidated, compared to what it was worth prior to expropriation?
Even if you were able to find a new suitable lease what is your client base worth now? Are they going to follow you?
Your brand, your marketing, and your advertising that is cumulative in nature could have a significantly different value in a new location.
FAIR MARKET VALUE
Using the definition of “fair market value” how much would someone be likely to pay for all of your tangible and intangible assets if they were under no pressure to buy and had reasonable knowledge of the facts? One of the facts would be that a potential buyer will know the lease is ending soon and that you have to sell.
If $5,500 per month was spent on a well thought out Google Ad campaign and that campaign administration for 3 months; what would that buyer profile likely be willing to pay and why? This is an added component to a regular business valuation. This is why if this component is added for expropriation purposes this sort of valuation is likely to cost $4,500 to $9,500

OVERVIEW

The information provided on expropriation in the English speaking provinces of Canada, is based on a general understanding of the principles and practices of expropriation law as it applies in the particular province, rather than specific data from individual databases. The details shared are grounded in the overarching framework and legal principles that guide expropriation processes in Canada, most are well-documented in public legal resources, statutes, and legal commentary. Key sources typically include:

The $524,840 valuation for Redacted Business Name., as determined by the Eric Jordan "25 Factors Affecting Business Valuation" Methodology, is supported by the BC Expropriation Act's comprehensive approach to compensation. This approach not only covers the market value of tangible assets but also acknowledges the significant impact of intangible assets and other losses directly attributable to the expropriation. Presenting a detailed valuation that encompasses these aspects, grounded in the Act's principles, strengthens the case for achieving fair compensation for your client, REDACTED NAME.

Provincial Expropriation Act: This is the primary legal document that outlines the process, principles, and entitlements related to expropriation in a province. It provides the legal basis for compensation, including the valuation of both tangible and intangible assets, disturbance damages, and other compensable losses.

Legal Texts and Commentaries: Scholarly articles, legal commentaries, and textbooks on Canadian expropriation law offer insights into how the law is applied and interpreted, including precedents that shape the understanding of fair compensation and valuation methodologies.

Government Publications: Documents and guides published by the individual provincial governments or related authorities can provide guidance on the procedural aspects of expropriation and compensation.

Judicial Decisions: Court rulings on expropriation cases in BC offer precedent on how the law is applied, including how compensation is determined and what factors are considered in valuation.

Professional Guidelines: Publications and guidelines from professional bodies related to valuation, real estate, and legal practice in the province can offer insights into standard practices for assessing the value of expropriated properties and businesses.

The principles and practices described are well established in the field of expropriation law in the province and are supported by these types of authoritative sources. For the most accurate and up-to-date information, consulting the actual texts of the Provincial Expropriation Act, legal databases, and the latest judicial decisions would be recommended.
Recognition of intangible assets in expropriation cases, including goodwill, business losses, and other non-physical assets, is a well-established principle in Canadian law, including Provincial Law.

GENERAL PRINCIPLE

In Canadian expropriation law, compensation for the loss of intangible assets such as goodwill, business interruption, or loss of potential future profit is recognized, especially when these losses directly result from the expropriation. The courts have acknowledged that the value of a business is not solely in its physical assets but also in its ability to generate income, its customer relationships, its place in the market, and other intangible factors.

CASES AND PRECEDENTS

Tsawwassen Golf & Country Club v. South Coast British Columbia Transportation Authority (2013 BCSC 239): This is an example of a case where the issue of compensation, including for intangible losses, was significant. While primarily focused on land value and improvements, the principles discussed are relevant to the broader conversation about compensation for loss.

Southam Inc. v. Surrey (City) [1990] 2 S.C.R. 695: This Supreme Court of Canada decision, although not from BC, has been influential across Canada, including BC. It addressed the issue of business losses and the recognition of intangible assets in the context of expropriation.

LEGAL FRAMEWORK

The legal framework for considering intangible assets in expropriation of a province is rooted in the Expropriation Act and interpreted through court rulings. The Act outlines the basis for compensation, which is intended to make the expropriated party whole, considering both tangible and intangible losses.

Free - Give Eric a call or an email to get a rough idea of what you might be entitled to and how to find a lawyer to represent your interests instead of their own.

I will be happy to send a redacted report to clients to review.

That old saying “it is not so much about the size of the dog in the fight but the size of the fight in the dog” In order to win in court you must have an interested lawyer who is willing to work with me and understand your valuation.