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Fee Simple or Leasehold?

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JimmyJames

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.
 
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.)
 
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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