Real Estate: Valuation and Appraisal
Practitioners need to be able to critically assess real estate appraisals in various situations so as to better advise their clients and draft more effective documents. Leases (ground leases, net leases, and space leases) often include renewal terms based on market values to be determined by appraisers; partnership and other arrangements (LLC, etc.) may have dissolution clauses relying on appraised values. The language of these clauses can have an effect on the resulting value. Trust and estate counsel regularly deal with appraisal issues with the IRS and estate planners on behalf of clients, and bank counsel must be conversant with appraisal regulations and requirements at federal and state levels.
Attorneys do not need to know how to perform appraisals, but they should know how to read and understand appraisal reports, how to retain competent appraisers in various situations and be aware of laws and regulations that apply in different situations. The appraisal that is needed for highway condemnation is not the same as that required for gift tax purposes.
This course will survey the most common uses of real property appraisals in leasing, lending, and litigation; review typical appraisal methodology, including the Uniform Standards of Professional Appraisal Practice; address how to select and retain qualified appraisers; address how to review an appraisal report valuing a commercial property; and provide practice tips for drafting agreements with appraisal clauses.
Grading will be based on 3 take-home assignments given during the course and one take-home final/paper. This course will meet for the first half of the semester (one evening for 1 hour and 40 minutes for 7 consecutive weeks).