KNOWLEDGE BANK FROM B KANAGA SABAPATHY
LET KNOWLEDGE SPREAD
Message from B. K. sir 24/04/2023
Question :
There is a 2,000 sq.ft. flat, one of four in a G+3 building built on a common 750 sq.yd. Plot was purchased from the Housing Board in 1983. The sale deed does not mention the undivided share of land. How to estimate the value of the flat?
My opinion :
When the sale deed does not mention about the UDS of land, the following methods can be adopted :
1. You may try by land & building method. Find out the FSI of the apartment building. UDS of land is the super built up area divided by the FSI. UDS of land multiplied by the prevailing market can be the value of the land. Calculate the depreciated value of the building by assuming suitable salvage value. Addition of value of land and the depreciated value of the building will be the value by land & building method.
2. By doing comparable sale instances of the apartment building located nearby, you can estimate the value of the said flat after making suitable adjustment for the specification, location, condition, etc.
3. By rent capitalisation method also, you can estimate the market value. It is to be remembered that the assumption of yield rate plays an important role. A valuer with sound knowledge of local market condition can assume an appropriate rate.
4. After analysing the values by above three methods, a prudent valuer can come to a conclusion about certifying the market value after a thorough analysis of the factors affecting marketability and enforceability.
What have been given above is for overall guidance only. Depending upon the site conditions and exact purpose, a valuer can take prudent decision.
With best wishes,
B. KANAGA SABAPATHY
[email protected]
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
