Making Sense of Negotiation in Expropriation Cases

According to the National Economic Development Authority, over 3,600 projects are in the pipeline and be implemented through 2028. Land acquisition and expropriation of lands are inherently part of these projects. An expropriation happens when a governmental entity (known as the Implementing Agency) acquires land without the owner’s permission. The Right of Way Act outlines this privilege. The Act specifies whether there is an expropriation public purpose, the steps that the Agency and affected owners must take, any compensation rights, and any terms and conditions that must be offered. When confronted with an impending expropriation, a property owner may find it challenging to comprehend this highly technical and sophisticated area of law.

Prior to expropriation, the expropriating agency will frequently try to negotiate a deal with a property owner. The agency, however, has the jurisdiction to seize what is necessary in accordance with the Act if they are unable to reach an agreement or the owner is unwilling to cooperate. The owner will thereafter have little control over what land is taken and when, but she or he can bargain for a reasonable compensation.

Negotiation Phase

Before the expropriation process begins, the property owner is given thirty (30) days to decide whether or not to accept the offer as payment for his property. During this period, the Agency may approach a property owner with an offer, and attempt to negotiate a voluntary purchase. If this fails, or the owner refuses to accept the offer, the next step is for the implementing agency to initiate expropriate proceedings.  

Once you receive an Offer you have two options: first, you may accept the Offer and receive full and complete payment of compensation for the expropriation; or second, you may not accept the Offer and continue to investigate the valuation further and make any additional claims for compensation in an expropriation proceeding.

The informal negotiation phase can be the landowners best opportunity to reach a settlement as easily as possible, but there might be roadblocks. Perhaps your differences regarding the compensation’s value are too great. Or perhaps there is too much ambiguity over how the expropriation will affect your property or your company for you to reach a deal before the expropriation.

In general, the negotiation can continue regardless of whether the negotiation period has expired or a court proceeding is ongoing. In any case, the law encourages amicable dispute resolution through alternative dispute resolution (ADR) methods rather than adversarial, judicial processes. The public will ultimately benefit from prompt and equitable resolution of such dispute resolution mechanisms.

Determining the just compensation is very technical and requires the appropriate expertise. The total value of compensation should be determined by the appropriate experts, such as an appraiser, who is familiar with the expropriation process. As a result, it is critical that a property owner selects an appraiser who is not only experienced but also knowledgeable about the Act, its requirements, and negotiation. Through this process, we can create an effective decision-making that is also much more inclusive. It considers all

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Author: AB Agosto

A Juris Doctor and a Professor of Business & Economics at the University of San Carlos. Teaching finance, real estate management, and economics. He conducted lectures on valuation, environmetal planning and real estate in various places and occasions.

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