312.01: Determining the Fee Simple Value

In determining the fee simple value of the subject property, the appraiser should generally use as comparables sales of similar properties that are owned as fee simple estates.  However, if this is not possible, the appraiser may use sales of properties that are subject to other types of leasehold estates -- as long as he or she makes appropriate adjustments (based on the terms of their leases) to reflect a fee simple interest.

When the community or neighborhood has sales activity for other leasehold estates held by a community land trust, the appraiser should discuss them in the appraisal report, but should not use them as comparable sales since, in all likelihood, the sales prices will have been limited by restrictions in the ground lease (and thus the sales transaction would not be comparable to the hypothetical condition -- no restrictions -- on which we require the appraisal of the subject property to be based).