5.0. HRSR 04-22-2002 - Laserfiche WebLink

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i UAL • include any improvement of a tenant-owner who of the tenant improvements or the cost to move has the right or obligation to remove the improve- the fixtures/equipment, or the cost of new ment at the expiration of the lease term. equipment (installed), whereas the building The improvements owner is entitled to just compensation for the t t considered to be real real estate (land and building). Again, the Unit property are any Rule, to be discussed in our Summer 2002 issue, Based on our building, structure, governs the Agency's responsibility to reimburse. experience...we have or other improve- We recommend that the real estate expert ments which would appraise the land and the basic building, strip- concluded that the be considered to be ping away movable and immovable issue of compensation real property if fixtures/equipment, and assigning the appraisal for fixtures, whether owned by the owner of these components to other experts.This holds of the real property true regardless of whether the landlord or the movable or immovable, on which it is located. tenant has ownership of these components. By is the biggest problem Compensation for focusing on the value of the real estate alone, the confronting the t e n a n t - o w n e d appraiser can then more easily use and apply appraiser. improvements is standard comparables which do not typically based on the amount include any unusual components. An exception • which the improve- to this recommendation occurs when the real ment contributes to estate appraiser also has unique knowledge about the fair market value of the whole property or its valuing fixtures and equipment. In this situa- salvage value, whichever is greater. Salvage value tion, the real estate is defined in Sec. 24.2 and will be discussed in appraiser is qualified c c our Case Study/Summer 2002 issue. to value the real property and its However, the Identifying and Valuing the Real Property components without laws regarding Components additional assistance When appraising non-residential real estate, it is from other experts. compensation recommended that the professional appraisal However, we still for fixtures/ team conducts the property inspection with the prefer to see the fix- equipment and the owner and the tenant. The ideal team includes tures and equipment reimbursement of the real estate appraiser, the fixture appraiser, the carved out from the equipment appraiser, and the relocation expert. real estate and sepa- relocation expenses During the inspection, the experts will discuss rately valued. By have been given less who is responsible for valuing the individual doing so, we antici- attention over the years components of the property. At this time, it is pate the difficulty of • also important to identify what is owned by the valuing the improve- )) tenant and what belongs to the building owner. ments themselves This is essential because the tenant is generally and avoid the basic conflict inherent in assigning entitled to receive the lesser of the market value a single value to a multi-component property. 14 VALUATION VIEWPOINT VOLUME 7, NUMBER 1 • SPRING 2002