We have had several conversations recently with various industry stakeholders and we would like to encourage you to consider the following:
BLENDED SITE ADJUSTMENTS: In recent conversations with the Bank of Montreal, BOM has stated that the blended adjustments for site value are no longer acceptable to them, and they are requesting that adjustments, and the comments associated with them address the specific components that contribute to the adjustment(s).
Please ensure that when completing appraisal assignments for this client, that the site adjustments and comments reflect their requirements.
TENANT OCCUPIED PROPERTIES: The question about the ownership rights being appraised, in tenant occupied properties, keeps coming up. If a property is tenant occupied, then the owner has surrendered part of their ownership rights, (the right to occupy) and therefore no longer has the full bundle of rights (Fee Simple). In such a case, the normal course of action is for the appraiser to consider the LEASED FEE interest of the property, and appraise it as such. This would typically require the use of tenant occupied comparable sales for consideration, etc. HOWEVER some clients (lenders such as BMO) require that the Fee Simple interest in a property be the basis of the appraisal assignment. In such cases, the appraiser is still to indicate that the property is Tenant Occupied, however the ownership rights being appraised are FEE SIMPLE. The appraiser simply needs to include a statement such as: “At the request of the client, the subject property is being valued considering the Fee Simple interest, and the Leased Fee interest in the property has not been addressed in this appraisal assignment.” See USPAP FAQ #217