Welcome to the International Right of Way Association

1
Welcome to the International Right of Way
AssociationsCourse 408The Valuation of Native
Lands in Canada
408-PT Revision 2 04.30.08.CAN
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• Introductions
• Who we are
• What we do
• Where we do it
• How long weve been doing it
• Our goals for the course...

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Objectives (1)At the end of the two days, you
will...

• Know more about the nature of Native lands and
  the reserve land regimes structure
• Understand better the main featuresof First
  Nation land management

4
Objectives (2)At the end of the two days, you
will...

• Learn more about information sources relating
  to First Nation land management
• Appreciate better reserve lands procedural
  requirements

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Housekeeping
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Schedule (1)Day One

• 800 - 830 Introductions, Etc.
• 830 - 1130 The Nature of Native Lands
• 12 30 - 230 Reserve Land Regimes Structure
• 245 - 415 First Nation Real Estate Perspectives
• 415 - 430 Recap Day One

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Schedule (1)Day Two

• 800 - 815 Recap Day One/Introduce Day Two
• 815 - 1200 Valuation of First Nation Lands
• 1 00 - 345 Specific Claim Valuation
• 345 - 400 Summary and Review
• 400 - 500 Exam

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Native Lands

• Aboriginal title lands
• Comprehensive claim settlement lands
• Reserve lands

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Native Peoples

• Native peoples
• (eligible under a comprehensive claim
  settlement)
• Status Indians
• Non-status Indians
• Metis
• Inuits

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Native Land Categories

• Aboriginal Title Lands
• Treaty Lands
• Reserve Lands
• Lands set aside by the Crown
• Lands acquired by Native Peoples
• Metis and Non-status Lands
• Comprehensive Claim Settlement Lands

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Definitions

• A reserve is land with title vested in Her
  Majesty and set apart for
• the use and benefit of a band and includes
  designated lands.
• A special reserve is land, the title is not
  vested in Her Majesty and
• set apart for the use and benefit of a band.
• A band is a body of Indians for whose use and
  benefit in common,
• lands the title to which is vested in Her
  Majesty, have been set
• apart or for whose use and benefit in common,
  moneys are held
• by Her Majesty, or have been declared by the
  Governor in Council
• to be a band for the purposes of the Indian Act.
  

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Judicial Guidance onValuing Native Lands

• Guerin, 1984
• Musqueam Indian Band v. Glass, 2000
• Wewayakum Indian Band v. Canada, 2002
• Ross River Dana Council Band v. Canada, 2002
• Osoyoos Indian Band v. Town of Oliver, 2003

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Guerin

• Indians have a legal right to occupy
• and possess certain lands, the ultimate title
• of which is in the Crown.
• Indian title as a beneficial interest...

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Musqueam

• Current land value is interpreted to mean
• the fair market value of fee simple title.
• There are different legal constraints
  anddifferent market conditions on reserve lands.

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Wewayakum

• in conflicts, government must
• consider the interests of non-Aboriginal
• groups.

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Osoyoos (1)
... regular expropriation rules might not apply
including the adequacy of compensation. it is
inappropriate to apply commonlaw real property
rules to Indian lands the transfer cannot be
treated as a regular, commercial transaction.
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Osoyoos (2)

• ... reserve land does not fit neatly withinthe
  traditional rationale that underlies the
• process of compulsory takings in exchange
• for compensation in the amount of the market
• value of the land plus expenses.
• The Aboriginal interest in land will generally
• have an important cultural component.

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Evolution

• Aboriginal title and Indian land interestshas
  evolved from a vague concept to anapproximation
  of a fee simple estate.
• Reserve and Aboriginal interests have special
• characteristics and utility, which are not
  fullyvalued by determining current market value.
• Any taking of reserve land must be for
  theminimum interest required for the project.

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Indian Act

• provides a separate and complete
• reserve land administration system.

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Interests in Landand Assets (1)
Aboriginal title is a root title subsumed in part
by the Crown and based in a groups communal use
and interest. It must be surrendered and
compensated when granted or used for
non-traditional uses.
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Interests in Landand Assets (2)
Reserve land is a communal interest, with the
general attributes of Aboriginal title. It may
be unallotted to members as locatees by
certificates of possession or allotted by custom,
surrendered for sale or for a specified use,
taken for public purposes or committed for
specific periods for uses through permits, leases
and easements.
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Interests in Landand Assets (3)
A certificate of possession establishes a
members right to possess and use a specific
parcel of reserve land. A certificate holder may
lease the parcel unconditionally, sell, transfer
or will the interest to other band members or
lose the interest through reversion or
resumption, with compensation for improvements by
the Band Council.
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Interests in Landand Assets (4)
Absolute surrender Conditional
surrender Permitted interest Internal
allotment/taking
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Real Estate (1)

• land is a fundamental element of life not
  a medium of exchange
• the reserve land base and resources are
  limited and need to be expanded not
  diminished
• the anticipated community impacts must
  influence any response to a real estate
  transaction
• cemeteries, religious, social and cultural
  sites have special status and usually there
  are no equivalent substitutes

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Real Estate (2)

• there are potential negative tax, rent,
  employment consequences if businesses relocate
  from the reserve
• member opportunities can be part of any real
  estate transaction
• negotiations is an important part of any real
  estate transaction

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Real Estate (3)

• hospitality is an important part of any
  interaction
• fairness and respect are essential in any
  transaction
• there may be ideological changes with
  electoral changes

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Appraisal Contrasts (1)

• Value in use and some apparentnon-economic uses
  must be considered.
• Restoration is important and covers disturbance,
  injurious affectionand special difficulties.
• There may be no or only a limitednumber of
  comparable reservesales and other transactions.

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Appraisal Contrasts (2)

• There is a need to consider Aboriginal interest
  and cultural attachments to land when valuing
  interests.
• There is a need to consider the uniqueand
  inherent value of reserve land to the community.
• There is a need to understand and appreciate the
  traditional attachmentto plants, trees, animals
  and fish and natural features that add value.

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Appraisal Contrasts (3) The valuation impact of
reducing reserve privileges/benefits and revenues
(e.g., taxes, rent, wages, employment) must be
considered.The complex and costly process to
maintain and expand reserves, as a consequence
of real estate transactions/takings is a
valuation concern.Consideration needs to be
given to different interpretations of planning
activities and understanding environmental issues.
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Recap Day One
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Day Two
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Valuation Process
Appraisal Problem Definition
Scope of Work
Data Collection and Analysis
Land Value Opinion
Three Approaches to Value
Reconciliation and Final Value Opinion
Defined Value Opinion Report
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Valuation Process
Highest and Best Use The reasonably probable and
legal use that is physically possible,
appropriately supported, and financially
feasible, and that results in the highest value.
Physically possible? Legally
permissible? Financially feasible?
Maximally productive?
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Valuation Process

• Additional Highest and Best Use Considerations
  (1)
• Current or traditional or non-traditional
  uses
• Special features
• Cultural components
• Future reserve status

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Valuation Process

• Additional Highest and Best Use Considerations
  (2)
• other political or market factors
• Supply and demand differences
• Community, social and cultural factors

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Valuation Process
Land Valuation Methods Allocation
Direct comparison Extraction Ground
rent capitalization Land residual
technique Subdivision development analysis
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Valuation Process
Appraisal Problem Definition
Scope of Work
Data Collection and Analysis
Land Value Opinion
Three Approaches to Value
Reconciliation and Final Value Opinion
Defined Value Opinion Report
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Valuation Process

• Cost Approach
• Develop a value opinion for the land
• Estimate the cost new of the improvement
• Deduct depreciation
• Add land value opinion to the depreciated
  improvement value

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Valuation Process

• Direct Comparison Approach
• Research the market for comparable data
• Develop relevant units of comparison
• Compare the sales to the subject and adjust for
  dissimilarities
• Reconcile the value indications intoa final
  value opinion

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Valuation Process

• Income Approach
• The conversion of income intovalue through a
  rate or a ratio.
• Direct capitalization
• Yield capitalization

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Valuation Process
Reconciliation andFinal Value Opinion
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Valuation Process
Defined Value Opinion Report Narrative
Short narrative Form
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Valuation Process
Appraisal Problem Definition
Scope of Work
Data Collection and Analysis
Land Value Opinion
Three Approaches to Value
Reconciliation and Final Value Opinion
Defined Value Opinion Report
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Objectives (1)Now, you...

• Know more about the nature ofNative lands and
  the reserve land regimes structure
• Understand better the main featuresof First
  Nation land management

45
Objectives (2)Now, you...

• Know more about informationsources relating
  to First Nation land management
• Can appreciate better reservelands procedural
  requirements

46
Thank you!
408-PT Revision 2 04.30.08.CAN