When real property is partitioned or valued in court proceedings, its value can be assessed in several ways:<\/p>\n
1. The comparable sales method (the market comparison approach) bases the market price on information about sales of properties with characteristics similar to those of the property being valued, over a period extending back no more than six months from the valuation date. Actual sale prices and asking prices for similar properties are compared directly. The factors considered are the use of the properties compared, the dates of the transactions, the location of the subject property relative to the comparables, the year of construction and resulting age, the method of construction, and other shared characteristics that affect the value of the benchmark properties.<\/p>\n
2. The development method (residual valuation) determines the market value of land. It is used for unfinished construction projects and for developed or undeveloped sites where the valuer considers that the property would be worth more if developed, converted or put to a different use. The market value of the land, or the highest offer for the site, is calculated by deducting the costs of completing the proposed development from its market value once completed.<\/p>\n
3. The replacement cost method (cost approach) starts from the cost of creating the property. The calculation takes account of gross floor area, compliance with applicable requirements and fitness for use, investment cost, estimated costs per square metre and physical depreciation. It reflects the cost of constructing a property with similar characteristics, the remaining useful life, the building right, external installations, permanent plantings and improvements.<\/p>\n
If you are facing court proceedings for the partition of a property, seek qualified legal assistance and consult a lawyer.
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