Property Valuation for Court Purposes
When going through a separation or divorce, there can be complex decisions about the division of assets depending on what you share between you and your ex-partner. These decisions are often informed by how particular assets are or likely to be valued.
If you own property together, one thing that will likely be on your to-do list is gaining a property valuation. While some parties may come to an agreed value and divide the property without the need of the courts, in many instances, ex-partners are not able to come to an agreed value, and an impartial, professional property valuation is required to separate the matrimonial assets equitably.
We share what you need to know about obtaining a property valuation for court purposes.
What Steps Should I Take To Obtain a Property Valuation?
Often, the family home is the most valuable piece of property you’ll need an evaluation for. In determining the value of the property, it’s important to understand the process.
The first step is usually for the former partners to provide an estimation to their respective family lawyers about what they believe the property to be worth in an attempt to come to an agreement.
If you are unable to reach an agreed value, the third step will be to jointly appoint a single expert. Their job is to prepare a formal property valuation for court purposes. In this instance, this will be the only evidence of value to be used in court.
Things to Avoid Using to Determine the Value of the Property
There are some important things to understand and evaluations to avoid when it comes to Family Law property valuations.
- Real estate appraisals. While these are free, these can vary greatly and are the real estate agent’s opinion of what the property could be sold for, not necessarily what the property is worth. These sorts of appraisals can often inflate the value, which may cause an unfair financial split;
- A bank’s evaluation of the property, as these tend to be for mortgage or loaning purposes only;
- The price originally paid for the property, as it will no longer be accurate.
Obtaining an accurate and current valuation is very important, as these will be used to determine whether you sell the property, how much tax you might need to pay, and who gets what in the divorce settlement.
How is a Single Expert Appointed?
Appointing a single expert can be done in various ways.
- One party may put forward the names of three valuers, and the other party selects one;
- Both parties can apply to have a valuer appointed through a professional independent body such as the Australian Property Institute.
- Both parties can request that the Court appoints a valuer from a list each party provides to the Court.
Once a single expert is agreed upon, you will need to decide what instructions to give the single expert. The single expert will also need to comply with requirements outlined in the Family Law Act 1975.
There is a cost involved in appointing a single expert which both parties will pay for, unless otherwise agreed or ordered.
How is a Property Valuation For Court Purposes Calculated?
A property valuation for court purposes calculates the ‘fair market value’ of the property as of that date.
It takes into consideration critical issues affecting the property’s value, such as any renovations or improvements done to the property. This will be used to build a report that contains photos, descriptions and an analysis of the property.
Need Legal Help?
If you are going though a separation or divorce and want to know where you stand, Pullos Lawyers can help.