How to challenge the amount of an expropriation in Chile

Short answer: the amount you are offered is not the final amount, unless you let the deadline pass. The provisional compensation is set by a panel of valuers appointed by the very body doing the expropriating. Both the owner and the body can challenge that amount in court and ask for it to be finally determined, from notification of the expropriation order until the thirtieth day after physical possession is taken. If nobody challenges, the law treats that figure as final, as though the parties had agreed it.

Where the amount you are offered comes from

Before arguing about the figure it helps to understand how it was produced, because that explains why it usually falls short.

Every expropriation procedure begins with the appointment of a three member panel charged with determining the provisional amount. That panel is appointed by the expropriating body, choosing from a list of valuers approved by decree of the Ministry of Finance. There are safeguards: professionals belonging to the body may not sit on it, and no more than one member may belong to the State administration. But the instruction comes from only one of the two sides.

The panel has thirty days to report, extendable by a further thirty. In that time it inspects the asset and values it. What it almost never does, because it is not what it is asked to do, is measure the effect of the works on the part that is not taken.

One detail worth checking: if more than thirty days pass between the date of the report and notification of the expropriation order, the provisional amount must be adjusted for the change in the consumer price index between the month before the report and the month before the order. It is an express rule and it is sometimes overlooked.

What is compensated, and why that is where the argument lies

The constitutional standard is the patrimonial damage actually caused. Patrimonial rules out non pecuniary loss. Actually caused rules out the hypothetical.

Within those limits, what is compensated is not only the value of the land the strip takes, but the real and provable loss the expropriation inflicts on the owner's estate. And that is precisely where a valuation measuring square metres falls behind.

The points that most often move the figure are these.

• What sits on the land. Sheds, fencing, troughs, wells, mature plantations and irrigation works inside the strip, recorded as land without improvements.
• Access. If the strip takes the entrance to the public road, the loss is not the surface area: it is that the rest of the property is left landlocked.
• Severance. A property split in two loses its working logic even if it keeps nearly all its area.
• The area. If the real surface does not match the registered one, the valuation is built on the wrong figure. That is the moment to look at rectifying the registered area.
• Land classification. Dry grazing land is not the same as an irrigated block with registered water rights.

The deadline, properly counted

The challenge to the amount can be brought from notification of the expropriation order until the thirtieth day after physical possession of the asset is taken.

It is a long window compared with the thirty days from publication that govern attacks on the expropriation itself, which is why it is the route most people use. But it has a catch: its expiry depends on something that happens on the ground, the taking of physical possession, and not on a published date. It needs to be recorded.

Where the owner agrees to hand over by public deed, the date of that deed is treated as the date of the taking of physical possession for the purposes of the calculation.

Silence counts as agreement. The statute says it plainly: the provisional compensation is treated as final and agreed if neither the expropriating body nor the owner brings a challenge within the period. It is not left open for later. It is closed.

What the proceedings look like, step by step

They are brought before the civil court of first instance for the place where the expropriated asset lies. They can be filed by the owner and also by the expropriating body, which sometimes argues that the valuer paid too much.

The risk to weigh before challenging

Challenging is not free in terms of outcome, and this is rarely said.

If the judgment sets the final compensation above the provisional amount, the amount already received is credited against it with the appropriate adjustment. That is the outcome being sought.

But if the judgment sets the final compensation below the provisional amount, the owner must return the excess received, likewise adjusted as the judgment determines.

Which is why the decision to challenge is taken after your own valuation and not before. The question is not whether the land is worth more than they are offering, which is what anyone feels, but whether the patrimonial damage actually caused can be proved above the provisional amount.

What to gather before challenging

A challenge to the amount is won or lost on the file, and several of the documents take weeks to obtain. It is worth starting to collect them the day the publication appears, not the day the application is filed.

• The full expropriation order. Not the extract from the Diario Oficial, but the decree or resolution identifying the asset, the law invoked, the provisional amount and the terms of payment.
• The date and the copy of the publication. It fixes the starting point for the deadlines and it is the first thing the court will look at.
• The current registration of title. With a certificate of mortgages, charges and restrictions. If something turns up that should not be there, it has to be dealt with in parallel and not afterwards, and that starts with a title search.
• The plan of the property and of the strip. If there is no up to date plan, one has to be surveyed. It is the document the argument runs on.
• The record of how the land was used. What was done on it and with what result: area under crop, livestock, contracts, registered water rights, permits.
• What is built inside the strip. Sheds, fencing, wells, troughs, greenhouses and plantations, with their age and condition.

Two warnings on this point. The first is that if the registered area does not match the real one, it is much better to find out now than in the middle of the proceedings. The second is that if the title is not in order the problem is not only evidential, because afterwards you will have to prove ownership in order to be paid.

What happens after judgment

The judgment sets the final compensation, and from there three things can follow.

If the final amount is higher than the provisional one, the provisional amount is credited against it with the adjustment appropriate to the date the judgment used to determine the final compensation. What remains is the difference in the owner's favour.

If the final amount is lower, the owner must return the excess received, adjusted as the judgment determines. That is the scenario to anticipate before challenging.

And if either party appeals, the appeal is governed by the rules on interlocutory matters, which is a shorter procedure than an ordinary appeal.

Winning on the amount is not the same as collecting it. Once the final compensation is fixed, you still have to prove ownership and be up to date with property tax before payment is made. A case won on a property with an unsorted title still waits, and that part of the work is better done in parallel than afterwards.

The mistakes we see at this stage

• Challenging without your own expert evidence. The court compares two valuations. If one of the two does not exist, there is nothing to compare.
• Claiming a figure with nothing behind it. An inflated amount with no supporting material undermines the credibility of the rest of the submission, including the heads that were sound.
• Not recording the taking of physical possession. The expiry of the deadline depends on that date, and it is published nowhere.
• Leaving the title for later. Regularisation, posesión efectiva or exit from a co-ownership take months, and the deadline on the amount is not suspended meanwhile.
• Forgetting the remainder. If what is left has lost economic sense, as well as the amount it may be right to seek total expropriation, but that deadline expires much sooner.

How we handle this at Terreno en Regla

We start with the file: the expropriation order, the law invoked, the panel's report, the adjustment and the dates, which are what determine whether the window is still open and until when.

Then we value it ourselves, with our own survey team. We survey the property, draw the strip and measure what is taken and what it does to the rest. That produces a reasoned figure, which is the only thing a court can weigh against the other side's valuer.

With that figure in hand we tell you whether challenging is worth it. If it is, we run the proceedings to determine the final compensation before the civil court for the place where the property lies. And in parallel we review the title, because winning on the amount is worth nothing if you then cannot collect.

Frequently asked questions