Selected problems of the value appraisal of real estate built contrary to construction law — part II

Abstract

The scope of the examination of the actual condition, and the examination of the legal status of real estate property has long raised practical doubts and dilemmas. In particular, the issue of the expert’s obligation to take into account irregularities in construction proceedings raises a number of reservations. In the first part of the article, the concept of illegal construction works (performed without a building permit) had been presented; the duties of the appraiser provided for in the Real Estate Management Act were listed; the consequences of illegal construction works performed without a building permit, and other defects in the construction process were described, as well as difficulties in determining whether a given object had in fact been illegally constructed. Examples of decisions and permits issued in the construction process and their significance for the property appraiser were discussed. The second part of the article analyses the impact of the building permit on the price of the real estate property and discusses the scope of the obligation for the property appraiser to examine the compliance of the valued property with building regulations. Examples of bank’s requirements for property appraisers are indicated, and the problem of the practical significance of clauses included in real estate appraisal reports are presented. The discussion of all the above issues concludes with a summary. As a rule, a real estate property appraiser is not a person authorized to assess whether a given object, in whole or in part, has been built or is being used in accordance with building regulations. The appraiser, due to the statutory duty to exercise special diligence appropriate to the professional nature of his or her activities, is required to collect and use all necessary and available data on the given real estate property. If a discrepancy is found in the analysed documentation, the appraiser should mention it in the report. The appraiser is neither entitled nor obliged to determine the causes of the discrepancies. The indicated circumstances justify the inclusion in the report a clause that the valuation of the property in question may change due to discrepancies revealed, or proceedings being conducted. Failure to provide relevant information and reservations may justify the expert’s liability under the applicable provisions of the Civil Code.