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Challenging the cadastral value

Home Services Challenging the cadastral value

Cadastral value shall be understood as an amount established as a result of state cadastral valuation or consideration of disputes that arise out of the results of determination of the cadastral value by court or a cadastral value dispute review board (the third part was put into effect by virtue of Federal Law No. 167-FZ, dated 22.07.2010, as amended by Federal Law No. 431-FZ, dated 28.12.2010).

Currently, the following documents regulate revision of the cadastral value:

  • Article 24.19. of Federal Law, “On Valuation in the Russian Federation”, No. 135-FZ, dated 29.07.1998;
  • Order, “On amending the Procedure of establishment and working of the cadastral value dispute review board” , No. 259, issued by the Ministry of Economic Development of the Russian Federation on 16 May 2013, as approved by the Ministry of Economic Development of Russia through its Order No. 263, issued on 4 May 2012;
  • Order, “On approval of the procedure of establishment and working of the cadastral value dispute review board”, .No. 263, issued by the Ministry of Economic Development of the Russian Federation on 04.05.2012.

Below you will find the review of all options of consideration of the cadastral value and of all their pros and contras.

1st option –Litigation!

In case of a litigation we can help you as we may offer the client the services of our partners, lawyers experienced in litigation of cadastral value before courts in Moscow, the Moscow Region and other regions of this country. We guarantee defense of our valuation report in court. We believe this type of the options is the most transparent and effective one.

Pros: Contras:
  • Cadastral value may be decreased more than by 30 percent
  • The client will be free from settling problems by himself as it is enough to engage the professional team.
  • • High probability of success (confirmed by a positive judicial opinion and statistical data).
  • • The client pays only for the valuation results reported in the valuation report and there are no expenses from expert examination by SRO.
  • Financial expenses from services provided by the lawyers or attorneys who will be the client’s representatives at court.
  • Inherent danger or prejudice to the litigation.

Results of monitoring of judicial decrees related to challenging the land cadastral value in 2012

  Total claims Claims not satisfied Claims satisfied Decrees postponed or claims not considered
2012 917 101 776 40
2013        
Total: 917 101 776 40
   
11%
85%
4%

2nd option– Approaching the Cadastral Value Dispute Review Board.

Activities of the boards:

Refer to the official site of Rosreestr, Section Activities of the cadastral value boards related to consideration of the disputes from the cadastral value determination for the details about the activities performed by the boards and their results.

Where the client challenges the cadastral value independently or engages its lawyers, there are two sub-options possible:

Option 2.1:

Where a claim for adjustment of the cadastral value was filed based on the established market value of the real estate property as set forth in the valuation report, which report contents and execution comply with Article 11 of Federal Law No. 135, requirements applicable to the valuation reports, description of information used in the course of the valuation works, as were set forth by the federal valuation standards, and where such market value differs from the cadastral value of such real estate property by 30 percent, at most, the Board will resolve on determining the cadastral value of the real estate property as equal to its market value.

Article 11. General requirements to the contents of the valuation of the subject property report

The First Part is ineffective.

The valuation report (the “Report”) may not allow for unambiguous interpretation or be misleading. The Report must specify the valuation date, valuation standards used, valuation goals and tasks as well as other information as may be required ensure complete and clear interpretation of the valuation results described in the Report.

The Third Part is void.

The Report must contain the following information:

  • The Report date and number;
  • Valuation grounds;
  • Place of location of the valuer and information about its membership with a self-regulated valuers’ organization;
  • Accurate description of the subject property and where such subject property is owned by a legal person, the details of such legal person and the carrying value of the respective subject property;
  • Valuation standards applied to measure the respective type of value of the subject property, the grounds that substantiate their use for the purposes of valuation of the subject property, the list of the data used for the purposes of valuation of the subject property with their sources indicated as well as the assumptions in the valuation of the subject property;
  • Order of valuation of the subject property and the final valuation result as well as limitations applied and also the limits of the scope of the obtained result application;
  • Subject property valuation date;
  • List of the documents used by the valuer that establish the quantitative and qualitative characteristics of the subject property.

The Report also may contain other information that, in the valuer’s opinion, is significant as it ensures the complete description of the valuation approach used for the purposes of measuring the value of a specific subject property.

The legislation of the Russian Federation may provide for the special forms of the deliverables where specific types of subject properties are valued.

All pages in the Report must be numbered, laced (except for its electronic form), signed by the valuer(s) who performed the valuation works and also sealed by the personal seal of the valuer or a seal of a legal person which has an effective labor contract with the valuer(s).

The Report in the electronic form must be signed by a digital signature in accordance with the legislation of the Russian Federation.

In cases set forth by federal laws, acts of an authorized federal body that exercises powers of the statutory regulation of the valuation activities, the Report must be published in accordance with the procedure as may be established by an authorized federal body which is the regulator of the valuation activities.

Pros: Contras:
  • The client may gather the package of the documents independently, without engaging lawyers and attorneys thus decreasing the expenses.
  • The positive result is highly possible.
  • The cadastral value may be decreased by 30 percent, at most.
  • The results of the cadastral value measurements may be challenged before the Board only within 6 months after the date on which the respective data have been introduced into the state real estate cadastre.

Option 2.2:

Where the  market value of a real estate property differs from its cadastral value  by more than 30 percent, the board will resolve to decline the claim for a revision of the cadastral value result, except for  cases when the claimant files a positive expert’s opinion (if the market value report was developed by the valuers from different self-regulated valuers’ organizations, - positive expert opinions of the respective self-regulated valuers’ organizations), which complies with the requirements of the legislation of the Russian Federation and if the contents and the form of the market value report issued with respect to the subject property comply with Article 11 of the Federal Law, the requirements regarding the contents of the valuation report, description of information used in the course of the valuation works as may be established  by the federal valuation standards.

Pros: Contras:
  • The client may collect the package of the documents independently, without engaging lawyers and attorneys thus decreasing the expenses.
  • The cadastral value may be decreased by 30 percent, at least.
  • The results of the cadastral value measurements may be challenged before the Board only within 6 months after the date on which the respective data have been introduced into the state real estate cadastre.
  • Significant financial and time expenses required to obtain a positive opinion of a self-regulated valuers’ organization (examination may take from 1 month to three months and the expert examination fee may exceed the valuer’s fee).
  • The positive result is not guaranteed (both by SRO and the Board).
  • • Often the Board’s denial results in the only possible option remaining for the client – to appeal to court, which means that the client inevitably takes on the 1st option.

The results of the board activities in 2013-14

  Total of appeals Declined Sustained because Suspended
Market value measured Information pertaining to the land plot was recognized as unreliable
April 6 6      
May 4 2 2    
June 32 22 7 2 1
July 121 67 52 2  
August 5 4   1  
September 1 1      
October 3 1 1   1
November 1 1      
December 5 2     3
January          
Total: 178 106 62 5 5
   
59%
35%
3%
3%
 

Irrespective of the option the client may choose to appeal to the Board or court, then the valuation report will be required.

Our Firm offers the following types of the services:

  1. Preliminary valuation of the market value of the target subject property includes collection and analysis of the subject-property related information, travel of the expert valuer to site, inspection of the subject property and calculations of its market value. The result will be formalized in the format of an expert opinion which will serve for the client the basis of actual market value of the subject property allowing for a decision regarding its future actions.
  2. Development of the valuation report to be submitted to the Board or court, which will depend on what body the client will decide to appeal to. IMPORTANT! The fees due for the 1st stage will be included in the fees due for developing of the valuer’s report: the client will not pay for the services a double amount of the fees but rather for bringing the report in conformity with the legislation of the Russian Federation which regulates the valuation activities.
  3. Defense of the report before court. Where the client intends to challenge the amount of the cadastral value before court our experts are ready to recommend our partners, lawyers with the positive practice of challenging the cadastral value before courts in Moscow, Moscow Region and other regions of the Russian Federation as well.

We will be pleased to answer all your questions. Please call us:

+7 (495) 639-93-78. Our managers will promptly advice you .

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