Sunday, September 30, 2012

Appraisals for Chinese divorce in California

    Beijing night market, September 2011

This blog has attracted inquiries from two separate California divorce attorneys who share a similar problem – what happens when Chinese couples divorce in the state of California and the marital assets must be divided 50-50, but those marital assets include residences in the People’s Republic of China?

 They need residential appraisal reports, but the reports must be in the English language and be literate enough to be submitted to a court of law.  Finding an English-literate Chinese residential appraiser is easier said than done, but to be fair, the Chinese have done a much better job learning English than Americans have done in learning Chinese. 

 When I have searched the directories of international appraisal organizations, I find the Chinese members to be sophisticated commercial real estate appraisers who appraise corporate assets, but who does one turn to for a simple condo apartment appraisal?

 China Daily News has reported that there are about 550 appraisal companies in China, but finding one is a challenge in itself.  The most recent request I received was for the valuation of 4 apartments, three in Beijing’s ChaoYang District, in central Beijing, and one in the ShanDong province halfway between Beijing and Shanghai. 

 I contacted several Beijing appraisers listed in the Appraisal Institute directory but got only one response – with a price quote of 30,000 Chinese Yuan, or about $4750, which shattered my “everything is cheaper in Chinatown” way of thinking. The sample appraisal reports from the firm also showed how appraisal jargon can get lost in translation. For instance, what we call “comparables” were instead labeled as “contemporaries”.

While pondering this issue, I was contacted by my friend Ian Ng, the chief appraiser for the Hong Kong appraisal firm of Ascent Partners, who is about to embark on a U.S. business development tour.  I have collaborated with them before on corporate asset valuations and already knew of their ability to write lucid English-language appraisal reports, and he told me that they had the ability to handle such an assignment at a fairer price. 

The divorce attorney was pleased, but he also explained that the inherently emotional nature of divorce often leads to frequent starts and stops. In the mean time, I am willing to hear from any other Beijing or Shanghai residential appraisers.

And for Chinese husbands, treat your wives well.  Remember -- they get half.
Enhanced by Zemanta

Tuesday, September 4, 2012

Appraisal of a 1700-acre ranch in Belize

I sometimes encounter misperceptions about the effect on land value when a property is divided into two parts. In this instance, a ranch of several thousand acres of mahogany, rosewood and cedar in Belize had been appraised for $45 million in 2006 for a wealthy landowner. Then he died, and the ranch was split between heirs into western and eastern portions. I was to appraise the eastern portion.

Per the map, the western portion was accessible via the Northern Highway leading from Belize City to Orange Walk, and the eastern portion was accessible via the Old Northern Highway, 2 miles east of the Northern Highway. The property to be appraised was the eastern portion, and the mortgage broker must have assumed that values had remained unchanged from 2006 and that eastern and western parts were similar in value.

When I arrived in Belize I was surprised to find out that the Old Northern Highway serving as the western boundary of the eastern ranch had been dismantled back in the 1970s by the UK government because it was being used by Colombian drug smugglers as a landing strip. The subject property, two miles east of the Northern Highway, could only be accessed by tractor due to brush and topography (including wetlands).

To make matters worse, most of the valuable timber had been stolen, a common problem in Belize.

In the end, the value of the property, which had been represented as a seven-figure number, was appraised as a six-figure number.

Enhanced by Zemanta