Termination of a Condominium Appraisal Services
According to Arizona Revised Statute 33-1228, a condominium may be terminated only by agreement of unit owners of units to which at least eighty percent of the votes in the association are allocated, or any larger percentage the declaration specifies. The declaration may specify a smaller percentage only if all of the units in the condominium are restricted exclusively to nonresidential uses.
When the eighty percent threshold is reached, an independent appraiser selected by the association shall determine the fair market value of the individual units. The determination of the independent appraiser shall be distributed to the unit owners and becomes final unless disapproved within sixty days after distribution to the unit owner. Any unit owner may obtain a second independent appraisal at the unit owner's expense and, if the unit owner's independent appraisal amount differs from the association's independent appraisal amount by five percent or less, the higher appraisal is final. If the total amount of compensation owed as determined by the second appraiser is more than five percent higher than the amount determined by the association's appraiser, the unit owner shall submit to arbitration at the association's expense and the arbitration amount is the final sale amount. An additional five percent of the final sale amount shall be added for relocation costs for owner-occupied units.
Bailey Valuation and Consulting is experienced in this process and can perform an appraisal of your individual unit for use in this process. Additionally, we are knowledgeable of the many technical appraisal issues that result from this process that could impact your unit’s Fair Market Value (i.e. Fannie Mae, Freddie Mac and the FHA all have certain standards that condominium developments and their homeowners' associations must meet before they will approve a mortgage to buy a unit there. Among the main requirements of all three is that at least half of the units must be owner-occupied and that no single investor can own more than 10 percent of the units). Our appraisal will consider the individual characteristics of your condominium unit including any upgrades or remodeling that you have done since purchasing the property, its location in the condominium project, and any other characteristics that may impact your unit’s individual value. Typically, the association’s appraiser does not inspect your individual unit, but instead, a representative model of your same floor plan from the condominium project. If your unit is better than the unit they inspected, their appraisal of your unit may conclude to an inaccurate value. Unlike some appraisal firms, we welcome the arbitration process and know the not so common, technical, appraisal issues that can occur during this process.
Don’t hesitate to call us if you need an accurate appraisal of your unit or have questions about the appraisal of your unit.