Is an appraisal required?

RA Johannes Fiala
On the question of the necessity of having the value of the apartment determined by an expert opinion, we interviewed attorney Johannes Fiala, Munich. Fiala is an expert in this field. Many VfE members already know him. Mr. Fiala, you recommend that your clients have an appraisal done on the value of the home. Why is such an expert opinion actually necessary? RA Fiala: In order to be able to judge at all whether a case of immoral over-increase of the purchase price is present, it is necessary to let determine the value of the bought dwelling at the time of the purchase, in order to compare it with the purchase price. According to the case law of the Federal Court of Justice, a case of immorality in the purchase of a property only exists if the purchase price exceeds the value of the property by at least 87 percent. Without an expert opinion, this determination is not possible. What kind of expert opinion is required for this? RA Fiala: Decisive for the valuation is the market value of the property. There are various methods for determining the fair value. According to the case law of the Federal Court of Justice, the so-called capitalised earnings value method is to be applied to developed properties intended to generate income, e.g. by letting or leasing. In similar cases, the seller of the apartment objected to the accusation of an immoral increase in the purchase price, arguing that the calculated capitalized earnings value did not even correspond to the material costs incurred for the construction of the apartment. RA Fiala: Although this objection seems plausible at first glance, it is factually incorrect. As already mentioned, the Federal Court of Justice has ruled that, for the valuation of a property which is intended to be let for the purpose of generating income, it is the income value of the dwelling and not the purely material value of the dwelling, i.e. the construction costs, which is decisive. What information does the appraiser need to prepare the appraisal report? Ra Fiala: You should at least send the appraiser copies of all contracts concluded in connection with the apartment in advance. Any further information that the assessor may require will be requested from you at a later date. If you collect the information he needs yourself, you make the appraiser’s job easier, which of course then affects the price of the appraisal. Thank you very much for this interview.

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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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