When separating assets in family law matters, understanding the value of shared property is critical. A property valuation provides an expert assessment of a property’s worth, often required when one party wants to retain the property or when there’s disagreement about its value.
Here’s a comprehensive guide to property valuations in family law, including when and why they’re needed, how they differ from market appraisals, and the steps involved. Your lawyer will provide you with advice with respect to your specific needs.
What is a Property Valuation?
A property valuation is an independent assessment of a property’s value conducted by a jointly appointed single expert, often required under the Family Law Act. Unlike market appraisals or bank valuations, a property valuation is admissible evidence in court, making it a critical tool in resolving disputes over property division.
When Do You Need a Property Valuation?
- If One Party Wants to Retain the Property: A valuation ensures both parties have an accurate figure for negotiations or settlements. If the other party is retaining the home it would ordinarily be prudent to have a single valuation so you can be sure that the value agreed reflects a fair market value.
- If the Property Will Be Sold: A valuation isn’t always necessary when selling, as the market will determine the final sale price. In such cases, you can avoid the cost and time associated with obtaining a valuation. However, sometimes historical valuations are required for example, where one party brought a piece of real property into a shorter relationship and the ‘contribution’ of that property needs to be assessed. Or where one party has received a property by way of inheritance.
Market Appraisals vs. Bank Valuations vs. Property Valuations
Many clients assume they already have a valuation, but often it’s a market appraisal or a bank valuation, not an official property valuation: Below is an explanation of the differences.
- Market Appraisal: Real estate agents provide these to estimate how much they believe a property might sell for. However, they are often inflated to attract sellers and are not considered reliable or admissible in court but can be useful when first commencing negotiations
- Bank Valuation: These are typically conservative estimates used by banks for lending purposes. While more accurate than market appraisals, they are not designed for family law disputes.
- Property Valuation: Conducted by a qualified valuer, this is the only admissible document in court if there’s a dispute about property value. The reason why such an expert is generally appointed as a single expert is so that each party don’t go to the expense of separate valuations which may then not be in agreement. They generally share the cost of the single valuation.
When Should You Obtain a Property Valuation?
You should initiate the valuation process as soon as discussions begin about one party retaining a property. Acting early avoids delays and ensures accurate figures for negotiations or court proceedings.
Who Pays for the Valuation?
The cost of a property valuation is generally shared equally between the parties. However, if one party cannot afford to contribute upfront to the report, the other party may initially pay the full amount, with an adjustment made during the final settlement to recover the other half.
How to Obtain a Property Valuation
- An expert is agreed usually by one party providing a list of 3 and the other selecting one.
- A joint joint letter of instruction to the expert is prepared setting out the terms of their engagement and what is required.
- The parties pay generally in equal shares.
- Access to the property to valued is arranged with clear instructions that the valuer is not to have any private discussions of substance with either parties to ensure their impartiality.
- The report is prepared and sent to both parties.
- The parties then use this report to settle their balance sheet and progress their property discussions.
Additional Tips
- Delays May Require Updates: If there are significant delays in the property settlement process, an updated valuation might be needed to reflect current market conditions.
Need Help with Property Valuations in Family Law?
At Coastal Lawyers, we understand the complexities of dividing property in family law matters. If you’re unsure about the valuation process or need assistance with negotiations or court proceedings, our team is here to guide you every step of the way.y.
Written by Coastal Lawyers- Central Coast Family Lawyers
Coastal Lawyers are family lawyers based in Erina, on the Central Coast.
Coastal Lawyers assist family law clients in parenting, property, mediation, dispute resolution, and litigation. We offer the legal advice you expect from a lawyer, along with the emotional support you might not expect.
We are passionate about assisting our clients achieve amicable separations without the need for court intervention through the process of legally assisted mediation.
Our team also frequently appears at the Newcastle Federal Circuit and Family Court of Australia (Newcastle FCFCOA), the Parramatta Federal Circuit and Family Court of Australia (Parramatta FCFCOA), and the Sydney Federal Circuit and Family Court of Australia (Sydney FCFCOA) to represent our clients in more intricate family law matters. This encompasses issues related to family violence, unacceptable risk of harm to children, relocation applications, recovery orders and complex property settlements.
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