If you need a professional property valuation for a divorce settlement, look for a property valuer who can satisfy several criteria, including the ability to prepare a comprehensive property valuation report, knowledge of the legal process and experience appearing as an expert witness in court.
Our property valuations team understand the complexities of family law matters and we have developed the following guide to assist you when navigating the process so you can obtain the best results.
How do you divide a property when divorcing?
If you are faced with the daunting prospect of separation and divorce, an impartial valuation of shared property will form an important step in clarifying your future path.
The method for dividing property in the event of a separation is determined by the Family Law Act 1975 (Cth).
In practice, the matter of property divisions can be complicated and fraught. Divisions are not always 50:50 and there are time limits that apply for court property settlements. Married people must apply to court within 12 months of the finalisation of their divorce. This time is extended to within two years for de facto relationships based on the date of separation. That means all parties are under time pressures to produce the required information. Parties unable to agree on a value for the property must undertake further processes set out by the court.
For the average couple it is critical to establish the correct value of the family home and reach agreement – in a legally binding form and within a set timeframe – which is where a professional property valuer can assist. It is best to engage a valuer with experience in legal valuation processes and confidence with representing valuations in courtroom settings.
During a turbulent separation, a professional valuation service can smooth your path by providing access to expert knowledge, professional discretion, and sound guidance.
Why are professional property valuations often required?
Property valuations are conducted regularly due to the number of marriages that at some stage go through the process of separation or divorce. Researchers estimate that around one in three Australian marriages will end in divorce, with second marriages more likely to end in divorce. In 2019 the median length of marriages ending in separation was 8.5 years and divorce 12.2 years (ABS).
Although free market appraisals may suffice in some situations, professional property valuations are increasingly sought in divorce cases where a reliable formal valuation is critical. For example, complex property divisions may be involved, or market values might be contested.
Divorce situations are stressful and lead naturally to heated differences of opinion, especially over property. The potential for property arguments to escalate into a lengthy legal dispute is a big concern to many couples who only have limited resources. Because of the pressured conditions, both divorcing parties require trusted, impartial advice on property values so they can reach agreement, minimise costly rancour and get on with their lives.
A professional property valuer can help both parties
Establishing an accurate current property value is the goal, for both parties.
Property valuers provide a legally binding document that indicates, in their professional and impartial opinion, what a property would sell for – without the property owners actually having to go through the sale process.
Valuation services are crucial in divorce situations when one party wants to retain the family home while the other party wants to exit ownership and receive their fair share of the property’s value.
Note that professional valuations are only valid for three months as they must reflect current market values.
A common solution is to choose a professional property valuer who acts as a Single Expert, although in some cases divorcing parties choose separate experts.
Role of property valuer SINGLE EXPERT in resolving family court matters
Both parties can appoint a Single Expert property valuer to produce a legally binding report. The professional will be a certified practising valuer registered by the Australian Property Institute.
The court may also appoint a Single Expert property valuer.
A Single Expert property valuer has these credentials:
- Is a certified valuer
- Is a specialist in property valuations
- Has expert knowledge of the property market and capacity to analyse details
- Is reputable and can represent interested parties in professional manner
- Follows the Licensed Valuers Code of Conduct
- Is experienced at working with lawyers on Family Law matters
- Has courtroom experience
The advantages of using a Single Expert property valuer include:
- Seeking quick, market appraisals from local estate agents may be an option, but multiple appraisals may differ considerably. A single, fully considered valuation provided by a jointly appointed Single Expert provides surety.
- Where parties fail to agree on market appraisals, the impartial and legally binding valuation supplied by a jointly appointed Single Expert can be the breakthrough you need.
- Both parties share the costs of the Single Expert property valuer.
- The Single Expert’s valuations are accepted by the court as evidence.
Role of property valuer separate EXPERT in resolving family court matters
Although the Family Law Rules encourage the use of a jointly appointed Single Expert valuer there are cases where couples elect to have separate experts.
There are more onerous requirements when using separate experts. Couples need to apply to the Court to accept the valuer’s evidence. It is likely that the experts will need to confer with each other to discuss their respective views and the issues they can agree on. After they hold a conference, the experts present a report to court highlighting any issues.
Who pays for a jointly appointed valuer?
For jointly appointed Single Experts, both parties are responsible for their share of the payment, unless otherwise agreed or ordered.
At McLennan Steege Smith we conduct the inspection in good faith and payment is required prior to the release of the report.
How to appoint a valuer
Parties in the separation or divorce process have different options for how they go about appointing a professional valuer. Particular circumstances may govern the chosen method of appointment.
Alternative methods of appointment include:
- Single Expert – One party names three valuers for other party to select from
- Single Expert – Both parties supply a list to the court and the court appoints one valuer
- Single Expert – Both parties request that the court appoints one valuer
- Separate Experts – Each party engages separate valuer and the valuers will confer and present a report to court highlighting any issues
- When unable to reach agreement – in some states both parties can apply to an independent institution such as the API for appointment of one valuer.
The property valuation process for divorces in New South Wales
The valuer will:
- Conduct research and make an assessment of fair market value – this is the amount a willing buyer would be ready to pay a willing seller for the asset. Valuers can reach their findings by different methods, such as:- direct comparison of recent sales or yield analysis.
- Compile a report, based on their analysis, which includes photos and full description.
- When disputes do escalate:
- Courts require a properly formatted valuation report that will stand up in court.
- Courts require the expert valuer to appear in the courtroom. serving as an ‘Expert Witness’
In a dispute between divorcing parties, a valuer with relevant experience in court matters will be able to best represent the client. Legal procedures require that the valuer submits a valid valuation report as evidence in the Family Court, and provides an Affidavit confirming the report and that the rules have been complied with. An experienced professional valuer will defend this valuation report effectively in a courtroom setting.
Inspections and what the valuer looks for
The professional property valuer will make an initial inspection of the subject property to gain a full understanding of it.
The valuer will also conduct research to gain more information about the subject property and identify directly comparable evidence. The valuer will seek the best possible sales evidence relative to the subject property in recent times.
Key features the valuer will determine include:
- Land size
- Zoning
Attributes and detriments such as:
- Location to shop and/or train station
- Local school/and catchment areas
- Busy main road
- Very steep land
- Airport and Aircaft noise
- Tennis court/swimming pool
- Waterfront or water views
Choosing the right valuer
If you are in the position of engaging a qualified valuer or putting forward a list of candidates for the role, take some time to investigate the available professionals and their track records, and seek recommendations.
When making your decision, consider what the valuer might need to achieve for you during the forthcoming process.
The attributes of a recommended professional valuer include:
- Courtroom experience
- Works with major law firms and knows how they operate
- Demonstrates discreet, professional manner in client discussions
- Displays sensitivity at the time of inspection
- Communicates with all parties with empathy, fairness and calm demeanour
- Committed to keeping all parties informed
- Upholds independence, accuracy, and proper conduct of law.
Checklist for getting your property ready for a valuation:
- Timing – Allow sufficient time to conduct the valuation and remember the valuation will expire after three months.
- Appointment methods – Establish the most appropriate method of appointment – the recommended first option is a jointly appointed Single Expert
- Selection – Choose a professional property valuer with good credentials, including experience in family court work
- Legal process – Both parties follow the procedure for appointing a valuer, according to the elected appointment method
- Access – Provide the valuer with physical access to the property
- Background – Supply any relevant information that will assist with their valuation process
- If there are conflicts or problems with the valuation, take steps to resolve them.
McLennan Steege Smith has 30 years of property valuations expertise. We also have experience working with lawyers on family court matters and can help guide our clients through the property valuation maze. We produce legally compliant documents and, having presented our valuations in courtrooms, the confidence to take your valuation through all the required stages.
Call us for a consultation.
Disclaimer: This article is general information and does not constitute legal advice.
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