Value Of Real Estate Equal To Its Market Value

Another group of disputes that are relevant today are cases on determining the cadastral value of real estate equal to its market value. The relevance is explained by the fact that since January 2015, changes have been made to the tax legislation, according to which individual property tax will be calculated on the basis of the cadastral value, while the market value may be significantly lower than the cadastral value. Therefore, the assessment of the market value of real estate is also important to establish its cadastral value.

Thus, the Judicial Panel on Administrative Cases of the Supreme Court of the Russian Federation considered in open court a civil case challenging the cadastral value of real estate objects. The plaintiff appealed to the Kemerovo regional court with a statement about the establishment of the cadastral value of the respective real estate objects in an amount equal to their market value. In support of the stated requirements, she pointed out that the cadastral value of the properties it rents significantly exceeds their market value, which is confirmed by a report on the assessment of the market value of the property. In this case, the plaintiff indicated that the lease agreement provides the tenant with the right to establish in court the cadastral value of the leased premises in an amount equal to their market value.

In the Definition of February 11, 2015 No. 81-APG14-14, the Supreme Court found that the current legislation does not contain restrictions that prevent the tenant of the property as a person who has an independent legal interest to apply to the court in order to establish the cadastral value of such object in an amount equal to its market value, if such a right is enshrined in the lease agreement.

However, it should be noted that the provisions of Section 24.18 of the Law on Appraisal Activities imply that in case of challenging the results of determining the cadastral value, the market value of the property must be set to the date as of which its cadastral value is established. That is, if the market value of the relevant property is not determined at the date of the cadastral value, it will be impossible to establish the cadastral value equal to the market value. This position is enshrined in the above definition of the Supreme Court.

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Summarizing all the above, it is worth noting that when making various transactions in respect of real estate, if a certain type of value should be applied for such a transaction, the type of property valuation to be applied must be specified in the relevant contract. Then in the future there will be no dispute about what kind of property value to apply in this case. In the absence of an indication of the type of property value to be applied under the contract, it is the market value that will be applied.

When assessing the value of real estate, referring to independent appraisers, you need to take a serious approach to choosing an independent appraiser, since the report compiled by him will be one of the most important documents used when performing actions with real estate, and should not cause doubts in the authenticity and accuracy. In the event of an evaluation report with actual deficiencies, as well as violations of the law and state standards, during the trial, the court may schedule an examination and receive a new evaluation report, according to which the market value of the disputed real estate may be different. Moreover, the newly determined value of the property may be significantly lower than the value determined previously.

When concluding real estate transactions, as well as protecting our rights to real estate in the event of a dispute, it is necessary to understand that the market value should be assessed at the appropriate time. Thus, when concluding transactions Рprior to concluding a relevant contract, in the event of a dispute Рprior to filing a relevant claim, as well as in cases of administrative procedures in respect of real estate  before the state body adopts.

 

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