Valuation of the bank building during the pandemic

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Valuation of the bank building during the pandemic
28 January 2021

As part of the procedure for challenging (establishing) the cadastral value equal to the market value as determined by the Moscow City Court, Valrus experts valued the building of the head office in Russia of a large western bank. The valuation was carried out as of the date of determination of the cadastral value, January 1, 2018.

A distinctive feature of the object under study is that it is made based on the historical building of the 1810s. In fact, it was completely renovated in 2005 with the technical equipment of a high-class business center, including specialized banking facilities with equipment.

The examination work was carried out in April 2020, directly during the quarantine period imposed in Moscow in connection with the spread of COVID-19 coronavirus infection. This was one of the first projects and inspections we conducted during the lockdown. As we wrote on the site and the page in Facebook, the work of the company's employees was switched to remote mode, however, the implementation of valuation and forensic examination projects was not suspended.

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High-quality business centers located near the building under study were considered as analogues. The leasable area was taken into account by the total area of the building, with the exception of technical rooms and vertical communications. Since the class of buildings and their location were very close, the expert applied a minimum of adjustments, and the results had high convergence. The value of the market value of the capital construction facility was determined to be 3.6 billion rubles (with a cadastral value of 4.3 billion rubles).

The main problem was that the owner had previously disputed the cadastral value of the object, and it was determined at the level of 2.5 billion rubles. In this administrative case, there was also a valuation made by an international company in the amount of 2.5 billion rubles. An "additive" of 1 billion rubles, eventually resulting in 16 million.rub. of additional taxes per year, of course, did not suit the owner, and the bank tried to challenge the examination. We were presented with comments on the topic of choosing supposedly more expensive analogues that do not correspond in class. Convincing arguments were presented to the comments, including information from the case file and the official statements of the bank.

At the same time, the court nevertheless ordered a re-examination, and the main reason was not only the plaintiff's comments, but also the fact that objections were also received from the defendant, the Department of Urban Property of the city of Moscow. So, the City argued that the cost should be even higher, reducing the cadastral value by 1 billion. rub. the administration was not satisfied with the loss of taxes. Having received objections from both sides, although they were multidirectional, which only confirmed the independence and correctness of the valuation, the court decided to play it safe and appoint another examination.

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It should be noted that the plaintiff's procedural position was correct. They insisted on the correctness of their assessment. Thus, the ill-considered position of the City Property Department and the Government of Moscow on submitting comments on each examination, which gives some significant reduction in the cadastral value from the current valuation, without comparing the results with previous rounds of contestation (which, on the contrary, significantly increases the tax base), has led to additional budget costs for forensic examinations in a particular case.

The results of the re-examination turned out to be comparable to ours with a difference of 1%, and the plaintiff no longer dared to challenge them, and the defendants' objections were not satisfied by the court. Despite the fact that the cadastral value of the disputed object was established based on the results of a re-examination, confirmation with such a high degree of comparability of the final result allows us to speak about the high quality of the work carried out and the balanced approaches of the Valrus expert.

By the decision of the First Court of Appeal of General Jurisdiction, the decision of the Moscow City Court was left unchanged.

 


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