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Fee Simple or Leasehold?

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JimmyJames

Thread Starter
Freshman Member
Joined
Jan 16, 2002
I am reviewing an appraisal of a duplex that is 1/2 owner occupied and 1/2 tenant occupied. Should the appraisal/review read Fee Simple or Leasehold? What if the tenant is leasing on a month to month basis? Page 138 of The Appraisal Institutes "The Appraisal of Real Estate" appears to indicate that it should be Leasehold. Your comments and opinios are greatly appreciated.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I suspect you are being asked to appraise the fee simple interest of the owner, not the leasehold interest of the lessor. If a monthly lease or short term, there is no leasehold interest to consider. Only a long term lease would impede the owner from having, as a practical matter, the full estate (fee simple.)
 

graindart

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Montana
It depends on what the client wants the appraisal for.

If the client is a bank loaning money to the owner of the duplex, your appraisal will probably be fee simple.

If the client is a lawyer looking for damages to the tenant, your appraisal will probably be leasehold. (tenants interest)

If the client is a lawyer looking for damages to the owner, your appraisal will probably be leased fee. (landlords interest)
 
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