One of the most common, and often most contentious issues in family law valuations is the identification of building damage and the associated cost of rectifying those issues as at the date of valuation.
While these issues can have a material impact on property value, it’s important to understand where a valuer’s expertise begins and ends, and how early preparation can significantly reduce delays during what is already a challenging time for all parties involved.
The Valuers Role
A property valuer is appointed as an expert in the valuation of real property, not as a building consultant or cost estimator.
During an inspection, a valuer can identify superficially evident issues such as general wear and tear or minor visible defects. However, valuers are not experts in diagnosing structural issues or ascertaining the costs associated with rectification works, which can be significant and have a material effect on the value of a property.
How Condition Impacts Valuation
The predominate method of valuation for residential property is Direct Comparison. This approach relies on analysing sales of properties that are:
- Similar in style, age and construction
- Located in comparable areas
- In similar condition to the subject property
Where a property reflects average wear and tear for its age, this is typically captured within the comparable sales evidence.
Minor issues, such as some damage to a small retaining wall, a vanity unit that needs replacing or similar can be provisioned within the valuation.
When Valuations Need to Pause
Challenges arise when significant damage is present, particularly where that damage is not immediately visible during a standard inspection.
Examples can include:
- Roof or structural damage
- Water ingress caused by poor drainage
- Framework deterioration
In these situations, we will pause the valuation process and ask the parties to agree to;
- A qualified building report
- Independent confirmation of rectification works
- Verified cost estimates from a builder or Quantity Surveyor.
This process can take months, creating delays that are far from ideal in family law matters.
Why Early Disclosure Matters
It’s not uncommon for the party intending to retain the property, and who is present at the inspection, to point out building issues. While many of these would be identified by the valuer regardless, there are occasions where major, non‑evident defects are disclosed that require the valuation to stop and further investigation to be undertaken.
Increasingly, we are seeing family lawyers take a proactive approach by providing building reports and rectification costs upfront as part of an agreed statement of facts. This approach can significantly reduce delays and uncertainty.
We strongly encourage lawyers to ask clients early whether any known building issues exist and, where they do, to obtain both a building report and cost estimates at the outset.
Why Costing Matters
A building report on its own is often not enough. Statements such as “the roof requires replacement” or “the slab requires underpinning” do not provide the information needed for valuation purposes without reliable costings.
Valuers will not estimate rectification costs, as this falls outside their expertise. Without verified costs, the valuation cannot accurately reflect the property’s condition.
Where rectification costs are required, these may be provided by a registered builder. In family law matters, particularly where issues are significant or contested, independent registered builder costings are often preferred due to their objectivity and level of detail.
In an ideal world, a building report should form part of every family law valuation instruction, much as it does for property purchases. In many cases, reports identify only minor issues typical for a property of that age. Where more serious defects are identified, obtaining costings early allows the valuation to proceed efficiently and with certainty.
Ultimately, early preparation can:
- Reduce delays
- Minimise disputes
- Ease stress for all parties during an already difficult process
A small step upfront can make a big difference to both timelines and outcomes.