Rules for the Valuation of Properties According ECO/805/2003 (V)

Valuation Rules According ECO/805/2003 (V)

Statement of the Values. Checks. Land Area. Mortgage Value. Intermediate Valuation.

When valuing a Real Estate in Spain, the values should be stated in a report and, where appropriate, a Certificate of Valuation.

Minimum Checks

The valuation of a property requires to perform all necessary checks to know the characteristics and the actual condition. Among the checks that should be performed, the following ones should always be included:

• physical identification of the property, through its location and visual inspection, checking if its floor area and other characteristics match the description
• identifying all visible servitudes
• conservation status or condition
• occupancy status
• use or exploitation intended for the property
• public protection regime, if it’s about housing
• architectural heritage protection regime
• agreement of the property with all applicable urban planning regulations
• where applicable, availability of right to the valued urban use.

Land Area

In order to calculate the value of a land or a country estate, the area to consider should be checked by the appraiser. If this testing is not feasible, the appraiser should use the lowest value between the Registry Area and the Cadastral Area.

Definition of Mortgage Value (VH)

The Mortgage Value or VH (‘Valor Hipotecario’, in Spanish) is defined as the value of the property as determined by a prudent valuation, taking into account all market conditions, the use at the time of the valuation and any possible alternative uses.

Definition of Intermediate Valuation

The Intermediate Valuation of a construction work is any of the valuations that are issued after the initial valuation and during the construction or rehabilitation process of a building or an element of a building. The Intermediate Valuation reflects the progress of the works and the percentage of work performed, but its issue does not involve the updating of the values ​​contained in the initial valuation.

Rules for the Valuation of Properties According ECO/805/2003 (III)

Valuation Rules According ECO/805/2003 (III)

Market Value and Replacement Value. Checked Area and Computable Area. Comparable Properties. Urban Levels.

The Spanish Order ECO/805/2003 defines the Market Value (VM) as the price at which the property could be sold on the date of the valuation. In determining the Market Value is necessary to consider:

• that there is no prior relationship between seller and buyer
• that neither the seller nor the buyer holds any personal or professional interest in the transaction, excluding those associated with the cause of the contract
• that the public offering to the market occurs through a proper marketing strategy and with no inside information
• that the price of the property is consistent with the public offer and reflects a reasonable estimate relating to market conditions existing at the date of the valuation
• that the price does not include any taxes or marketing expenses.

Definition of Replacement Value (VR)

The Replacement Value (VR) can be gross or net. The Gross Replacement Value (VRB) is the sum of all the investment costs required to build, on the date of valuation, another property with the same characteristics (capacity, use, quality, etc.) but using current technology and materials. The Net Replacement Value (VRN) is the result of deducting from VRB the physical and functional depreciation of the property on the date of the valuation.

Checked Area and Computable Area

The Checked Area is the floor area as measured by the valuer. The Computable Area is the floor area used in the valuation.

Comparable Properties

Comparable properties are those that are considered similar to the property that is being valued, or appropriate to apply the homogenization, because of its location, use, type, size, antiquity, condition or other relevant physical characteristic.

The Urban Levels of the Land

For the purposes of the valuation, Spanish Order ECO/805/2003 classifies the land into two levels:

• level II: non-developable land
• level I: developable and developed land.

Architect Daniel Trujillano

http://www.arquitectotrujillano.com/valuation/home.html

Valuation Reports for Properties in Spain

Measuring Floor Areas in Spain – GFA and GIA

Gross Floor Area and Gross Internal Area in Spanish Buildings from Arquitecto Daniel Trujillano

Info00. Gross Floor Area and Gross Internal Area in Spain

(click to enlarge)

Architect Daniel Trujillano

http://www.arquitectotrujillano.com/measurement/home.html

Measurement Reports for Buildings in Spain

Video 00: Measurement of Floor Areas in Spanish Buildings

Architect Daniel Trujillano
http://www.arquitectotrujillano.com/measurement/home.html 
Measurement Reports for Properties in Spain

Measuring Floor Areas in Spain (II)

Measuring Floor Areas in Buildings (II)

GIA and GFA in Spanish Order ECO/805/2003

In Spain, Order ECO/805/2003, on Valuation Standards for Real Estate Properties, includes specific criteria for the measurement of Gross Internal Areas (GIA) and Gross Floor Areas (GFA) in buildings.

Gross Internal Area - GIA

According to the Order ECO/805/2003, GIA is the result of substracting from the floor area bounded by the perimeter defined by the inner face of the external wall of a building -or a building element- the following areas:

• the area occupied by all internal walls and partitions
• the area occupied by vertical structural elements
• the area occupied by pipes or ducts with horizontal section area greater than 100 square centimeters
• the floor area where clear height is smaller than 150 centimeters.

The floor area bounded by the perimeter defined by the inner face of external walls must include 50 per cent of the floor area of all private use covered outdoor spaces (terraces, balconies, drying rooms, porches, loading docks, overhangs, etc.), as measured along the horizontal projection of the roof.

GFA Excluding Common Parts

According to the Order ECO/805/2003, the Gross Floor Area Excluding Common Parts is the result of adding to the floor area delimited by the inner face of the external walls of a building -or element of a building- the following areas:

• 100 per cent of all area occupied by facades
• 50 per cent of all area occupied by sharecropping partitions, or partitions shared with other elements in the same building.

Again, the floor area bounded by the perimeter defined by the inner face of the external walls must include 50 per cent of all private covered outdoor spaces, as measured along the horizontal projection of the roof.

GFA Including Common Parts

According to ECO/805/2003, Gross Floor Area Including Common Parts includes the proportionate share which is result of the application of the associated sharing rate on the floor area of all common elements of the building.

Architect Daniel Trujillano

http://www.arquitectotrujillano.com/measurement/home.html 

Bulding Measurement Reports in Spain