residential real estate market prices), assuming that a real estate market price equals the building reproduction cost
plus the market price of the plot.
In one gas case, for example, the Court wrote "[i]f the property, which legally enters into the consideration of the question of rates, has increased in value since it was acquired, the company is entitled to the benefit of such increase."(38) The Court further illuminated its acceptance of reproduction cost
in another gas case.
Two types of costs are applied in the cost approach: reproduction costs
and replacement costs.
The church's pretrial motions requested the court to exclude any appraisal testimony that (1) did not treat the church complex as a single, larger parcel; (2) did not value the church complex as a nonprofit, special-use property; (3) was based on a reproduction cost
standard; and (4) was based on an erroneous legal instruction to exclude the impact of the church complex's visibility.
The appraiser uses a depreciated reproduction cost
, a market and comparative analysis, and the capitalization method in the gathering of his information which leads him to his conclusion.
A question exists in the appraisal community as to whether functional obsolescence caused by a deficiency requiring an addition should be calculated in the reproduction cost
approach (i.e., starting with a reproduction cost
basis) in the same way as functional obsolescence caused by a deficiency requiring substitution or modernization (sometimes called a "defect" to distinguish it from the former type of deficiency).
There exists a question in the appraisal profession over the correct methodology to calculate functional absolescence in the reproduction cost
At the trial to determine just compensation, the owner sought to introduce evidence of the reproduction cost
of the house as a measure of damages.
The appellate court said that the reproduction cost
less depreciation approach was the appropriate methodology to value specialty property, but should be used only in those limited instances in which no other method of valuation will yield a legally and economically realistic value for the property.
estimate, including contractor's cost, overhead, and profit + indirect costs: This is the cost to reproduce on the appraisal date the improvements as they exist, with reasonable substitutions for unobtainable construction materials and construction methods.
The alternate property may be either an exact duplication of the subject improvements (reproduction cost
) on a comparable site, or it may be an approximation of the subject improvements (replacement cost).