Given that the Florida market has declined, the owner is asking for an opinion of market value and a completed cost approach section. The reason why I was here "asking" was that in the course of doing my "Duty" I found out it was a 2 unit condo after he told me it was an attached townhome.
Mr. Dillon,
Good job on catching the condo thing then! For the market value side of this I am sure you are well qualified. Actually, the insurance side of "value" is not all that hard, but it needs to be two separate assignments just as Ms. Langely stated. Or at least should be in your mind as you approach it. If this is for one of the owners it could all be in one report. But it needs to be clear the cost approach is not for market value. Truth be known, and maybe you should ask, but it is likely some past appraiser completely missed the condo form of ownership appraising it as a townhome and did a cost approach when one should not have been completed.
There are things you have not disclosed yet. Such as is the lot all one big lot or is it two separate lots with each unit placed on a lot that goes with the unit. Not that this matters for insurance purposes, but it would in appraisal theory regarding disqualifying the cost approach for reflecting market value.
You have an odd bird there. A condominium form of ownership was most likely selected to get around some zoning and planning stuff. But once past those items a two unit condo project is really stupid. I would never purchase a unit myself in most cases. How do you approach a voting deadlock when the HOA only has two voting members? Great, now you and your neighbor hate each others guts and every issue is deadlocked. I can think of a host of potential problems with such a set up that hardly anyone considers when the project is new or recently new. But wait a decade or two and watch them start popping up!
Look, again, no amount of disclaimers in the final report is going to bail you out if the actual property owner is your client, the SOW was for insurable value, you failed to provide it, and later you get sued. The only way to have any shield at all would be a detailed engagement contract with the property owner, your client, agreeing to assume 100% of all liability for the misuse of inappropriate replacement cost data if you only have "market value" cost data sources. Versus "insurable value" cost data sources. They are not the same data sources. You would have to have this contract, in writing and signed, with the owner BEFORE you did any work at all and created a report. Even at that, I certainly cannot advise you as to your legal position if you find yourself getting sued later on anyway in spite of the contract.
Providing "Insurable Value" replacements costs is a niche market that, just like everything else we do, we are supposed to be prepared for and qualified when we do it. You are being viewed as an expert by this client, and if you have to come to this forum with questions, like the ones you posted regarding it, then you are not an expert.
Webbed.
