VALUATION FOR VIOLATION OF CHANGE OF LAND USE

KNOWLEDGE BANK FROM B KANAGA SABAPATHY

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Message from B. K. sir 13.03.2023

Question :

This is a case of mortgage loan security. A property was sanctioned as residential units and now it is converted to lodging. Can we give valuation for it?. If yes how?. This property is already mortgaged with the same bank.

Opinion :

1. The property was already mortgaged to the bank and that means the bank has accepted the conversion already in principle.

2. If it is a routine revaluation, you can certify suitable market value after analysing various factors affecting the marketability and enforceability. Record the facts.

3. Considering any property as collateral giving importance to approved drawing is as per the guidelines issued by the bank.

4. In my opinion, if value is required for collateral security, the main aspects to be considered are : (i) Is it a marketable property?. (ii) If yes, what are the factors affecting the marketability?.

• If there are any negative factors, you may discount suitably.

5. However, you may direct the borrower to prepare a revised drawing for “as is where is” condition and get it approved for his sake.

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With best wishes,

B. KANAGA SABAPATHY
bkvaluer@gmail.com
www.bkanagasabapathy.com

About the Author:-

Mr. B. Kanaga Sabapathy born in 1951, is a Civil Engineer who belongs to the 1972 batch of Regional Engineering College, Tiruchirappalli in Tamilnadu.
He is a Registered valuer of the Central Board of Direct Taxes, a Professional Engineer and also a Chartered engineer. Valuation is his main profession..
He was the National Vice-President of the Institution of Valuers (India) for 11 terms.
He is a regular contributor of articles in the Indian Valuer Journal from the year 1985. His articles especially his regular column “Questions & Opinions” are very popular among the practising valuers in India.
His book “Guidelines on Valuation for Banks” (2002) is used to be referred by many banks. The valuation formats designed by him were accepted and adopted as the formats by many banks in the country.
His son K. Arun and daughter B.K. Aruna are also approved valuers and they also contribute articles to the Indian valuer journal.
His guru: Mr. C.H. Gopinatha Rao, Chennai.
His mentor: Mr. R.K. Gandhi, Mumbai.
His role model: Mr. S. Rajaratnam, Chennai.
His best students: Thousands of valuers in the country