The importance of valuations in relationship property.

One of the most important steps in determining your legal entitlements in a separation is valuing the assets of the relationship.

Once the values are established, the parties can then look at the practical allocation of the assets, i.e who keeps what.

In the current market especially, having an accurate representation of what is the present market value of property is going to very important. Someone retaining a property may be seeking to ascribe a lower value to property, whereas someone being paid out for their interest will be seeking the greatest value to maximise their pay out figure. As such, the values arrived at in your case will have a material effect in your overall settlement.

For the purposes of this article, I will traverse some of the options for valuing property:

1.       Agreement: parties agree to a value they are both comfortable with for a particular asset.

Benefits are that this is a cost effective and time efficient way to reach a value of relationship property. Risks are that are that the value is not indicative of market value and one person benefits from that, while the other suffers a loss.

2.       Market Appraisal: parties engage a professional to give an idea of the value of property.

Benefits again are that it is cost and time effective. However, there is a risk that market appraisals especially for property are prepared by an agent who wants to win your business. Therefore, it could well be inflated or could provide a wide range of potential outcomes.

3.       Registered Valuer: a registered valuer is a professional who holds the requisite qualification to value property (or a business). Benefit is this is the most accurate value you will get other than selling the property, the risk is that the market is currently changing so quickly that a valuation is likely to go stale within 3 – 6 months meaning a further valuation is required. Generally these costs from $700 - $1,300 for each.

What option is going to be best for your specific case will turn on the individual cases’ facts but clients should be cognisant of how they ascribe values to property and what effect that may have on their bottom line.

If you wish to discuss your relationship property matter feel free to call Walker Murdoch Law Ltd for a no obligation, no cost conversation about the best steps for you to take to maximise your settlement.