Dock included in value?

[Terrel L. Shields]

Doug, my brother was a banker for years and they knew that docks disappear. His bank, for one, did not treat them as part of the property and took an UCC mortgage (financing statement) which spells out in detail what items are included in the sale and what has a mortgage. A deed to a property is not sufficient title to let the bank claim a boat dock... In my state and in OK that is pretty much SOP for local banks. Docks are not attached fixtures like the AC or stove.

 

[Doug DeMars]

Fair enough. And I appreciate this thread with a healthy discussion from different perspectives.

IMO, the physical dock amenities are quasi-real estate. The rights to have a dock located adjacent to a subject's site typically has a significant impact (regardless if there's an existing dock). Physically speaking, they can depreciate very quickly due to the nature of their location.

Yet, the market speaks loud enough with respect to their impact upon real estate values. All things being equal, dwellings with attractive dock(s) are going to fetch a much higher value than without. I dare say that if one asked 100 buyers (within the water-oriented communities) 99 would indicate their purchase price decision included consideration of the quality and condition of the dock amenity.

That being said...

I'm amending my position on the contributory value of dock features...with respect to their physical quality and condition. Moving forward, I'll focus more upon the rights associated with the amenity and the specific frontage provided at the water's edge.

 

[Ken B]

We have a few developments here in the Knoxville area where some of the owners or buyers of lots have a right to purchase a dock on the water. That right can be sold to someone else and does not remain with the lot.

And?

,.........

 

[timd354]

...just like when a disgruntled borrower decides to remove the AC unit, furnace, all the kitchen appliances and light fixtures...

:icon_mrgreen:

True, but most of those thing that you mention are not worth $50,000 to $80,000 as some of the very large and the very complex floating boat docks were and most of the AC unit, furnace, light fixtures and some of the kitchen appliances were part of the real property, unlike the floating boat docks that the appraiser included in the value.

 

[timd354]

Doug, my brother was a banker for years and they knew that docks disappear. His bank, for one, did not treat them as part of the property and took an UCC mortgage (financing statement) which spells out in detail what items are included in the sale and what has a mortgage. A deed to a property is not sufficient title to let the bank claim a boat dock... In my state and in OK that is pretty much SOP for local banks. Docks are not attached fixtures like the AC or stove.

A UCC financing statement is a filing that is used to declare a security interest in personal property. While some local lenders and banks may be fine with security interests in personal property, they are not acceptable to the GSE's and most secondary mortgage participants.

 

[J Grant]

Docks deeded with a property remain as a right of real property even if they can be removed, because the right to rebuild/put in another dock is on the deed (assuming it is not a grandfather clause)

The other kind of dock is use as an amenity but not owned/deeded outright.

Both convey contributory value to a property beyond physical cost of dock itself, appraisers need to comment on that as well as disclose differential of what is real property or not. If an owner removes a dock out of spite it is vandalism; no appraiser can control or forsee that. The point is, was the user/lender client informed of ownership rights vs use amenity in commenting on how value was accorded in report.

 

[Terrel L. Shields]

Docks deeded with a property remain as a right of real property even if they can be removed

Once again, how the buyer and seller treat it won't matter. It is how the state and the courts treat it.

Docks are definitely "real". That does not mean the courts always treat them as "realty". That's why the banks take them on the Uniform Commercial Code. And thus, with Fannie mae, etc. if I were appraising it in a state where it is recognized as part of the real estate, I would still segregate the dock on a separate line, adjust accordingly to come to the property value and make darn sure that the client understands the value of the dock is a separate line item. In a state that takes it as personal property, same and the final value would NOT include the dock's contribution.