Being named as the executor of a will is an honor, but it can seem overwhelming at times, particularly when the decedent owned commercial property such as a large apartment building. Part of the probate process is taking inventory of the estate, which includes businesses and commercial properties. Accomplishing that when there are tenants residing in the units in the apartment building can seem like a daunting task. Fortunately, you can hire a commercial real estate appraiser to help. Here's how they will help you during the probate process.
Property Valuation Report
Depending on the number of units in the apartment building that are currently being occupied with tenants, assessing the condition of the building and all of the structural and mechanical components will need to be done to determine:
- what the fair market value was on the date of death
- what condition the building and mechanical components are in
- how costly any necessary repairs may be
- how easy or difficult it would be to liquidate the property
- what the income is from the tenants in the building
- did the decedent save the tenants' security deposits
- how much is still owed on the property
- are there any back taxes that need to be paid
All of this information and other location-specific information will be used to determine the value of the property as is required by the probate court as part of the process of executing the will of a decedent's estate. The results of the valuation report may help you finalize some difficult decisions as to the requirements you are obligated to fulfill regarding paying off any and all creditors, particularly if a large portion of the estate needs to be liquidated in order to pay creditors.
Fair Market Value Appraisal On the Date of Death
It's important to understand that the fair market value will be determined based on the date of death not on the current date when the appraisal is done and the report is finalized. Due to this, it's a good idea to hire a commercial real estate property appraiser to begin the assessment and valuation as soon as possible after the probate case has been opened in court. Keep in mind that you will be required to give the tenants of the building notifications that the appraisers will enter their residences within a timely manner, such as a 48-hour notice or a 1-week notice, depending on the local, county, and state laws.
For more information on commercial real estate appraisals, contact a professional near you.