An attempt has been made by the authors
in this treatise to explain in simple language the basic principles of Valuation
of Real Properties.
The subject matter of this edition has
been thoroughly verified, revised and enlarged in 19 chapters.
Appendix I deals with 32 important judgements and decisions pertaining to the
subject.
Appendix II contains 8 useful Valuation Tables.
This revised edition contains 125 typical
solved problems and more than 200 questions at the end of all the chapters.
The subject of valuation has attained
a high degree of importance at present and it is now accommodated in the syllabi
of most of the Universities and Institutions.
The subject matter is characterized by
the clear, methodical and also step-by-step treatment. The presentation is comprehensive
and easy-to-follow.
It is hoped that the book in the present
form would satisfy the need of the student community and also serve as the most
useful reference book for practising valuers of real estates, tax consultants,
lawyers, advocates, etc.
| Price |
: |
Rs. 240-00 |
$ 15-00 |
£ 10-00 |
| Edition |
: |
Seventh Revised and Enlarged Edition : 2008 |
| ISBN |
: |
978-81-85594-77-4 |
| Book Size |
: |
135 mm × 210 mm |
| Binding |
: |
Paperback with Four Colour Jacket Cover |
| Pages |
: |
624 + 16 |
Next>>
Chapter 1 : VALUE
Chapter 2 : INVESTMENT IN REAL PROPERTY
Chapter 3 : INTERESTS IN REAL PROPERTY
Chapter 4 : METHODS OF VALUATION
Chapter 5 : OUTGOINGS
Chapter 6 : DEPRECIATION
Chapter 7 : VALUATION OF LICENSED PREMISES
Chapter 8 : VALUATION OF LIFE INTERESTS
Chapter 9 : VALUATION FOR RATING
Chapter 10 : VALUATION OF AGRICULTURAL LANDS
Chapter 11 : FINANCE FOR INVESTMENT IN REAL PROPERTIES
Chapter 12 : VALUATION TABLE
Chapter 13 : MISCELLANEOUS TOPICS
Chapter 14 : EASEMENTS
Chapter 15 : STANDARD RENT
Chapter 16 : COMPULSORY ACQUISITION OF LAND
Chapter 17 : THE TRANSFER OF PROPERTY ACT
Chapter 18 : URBAN LAND CEILING ACT
Chapter 19 : TYPICAL PROBLEMS
APPENDICIES
Chapter 1 : VALUE
General
Doctrine of estate |
(1)
(2) |
Free tenure
Unfree tenure |
| Type of estates in England |
(1)
(2)
(3) |
Life estate
Fee tail estate
Fee simple estate |
| Land system in India |
(1)
(2)
(3)
(4) |
Zamindari or landlord tenure system
Malguzari land tenure system
Mahalwari land tenure system
Raitwari or independent land tenure system |
Cost, price and value
Concept of the term value
Purposes of valuation |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11) |
Betterment charges
Balance-sheet
Buying and selling
of the properties
Compulsory acquisition
Court fees
Insurance
Mortgages
Reinstatement
Rent determination
Security of loans
Taxation |
| Different forms of value |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
|
Accommodation value
Annual value
Book value
Distress value
Goodwill value
Highest and best use value
Liquidation value
Market value |
(1)
(2)
(3) |
Investor for income
Investor for capital gains
Investor use |
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16) |
Monopoly value
Potential value
Rateable value
Replacement value
Salvage value
Scrap value
Sentimental value
Speculative value |
Supply and demand forces
Occupation value and investment value |
(1)
(2)
(3) |
Government Acts
Intensity of demand
Trade conditions |
| Factors affecting changes in market value |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12) |
Changes in building technology
Changes in fashion and taste
Changes in proportion of single people to married people
Changes in quality
of area
Changes in the age distribution of the population
Designs of property
Means of communication
Migration tendencies
Money supply
Planning control
Population strength
Unstable time |
Concepts of right of compulsory purchase and value in India
Emergence of profession of real estate valuation in India
Classification of the valuers
Role of the valuer |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9) |
Acknowledgment of market conditions
Competency
Cost of outgoings
Effect of statutes
General experience
Knowledge of building costs
Legal complications
Specialised buildings
Value and cost |
| New horizons of valuation |
(1)
(2)
(3)
(4) |
Environment
Neighbourhood
Rapid transit system
Time sharing premises |
| Questions
|
Chapter 2 : INVESTMENT IN REAL
PROPERTY
General
Characteristics of land
Investment
Investment market |
(1)
(2) |
Liquidity preference
theory
Loanable fund theory |
| Investment opportunities |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15) |
Articles for use
Gilt-edged securities
National savings certificates
Local authority loans
Insurance
Fixed deposits in banks
Company deposits
Public provident fund
Capital investment bonds
IDBI bonds
Mutual fund schemes
Units of the Unit Trust of India
Convertible debentures
Shares
Real property as an investment |
| Characteristics of ideal investment |
(1)
(2)
(3)
(4)
(5)
(6) |
Capital appreciation
prospects
Costs of purchase
and sale
Divisibility of holdings
Ease of purchase and sale
Security of income
Security of capital |
Interest on capital
Nature of real property |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10) |
Amount of investment
Central market
Clearance of title
Government action
Heterogeneity
Influence on yields
Joint ownership
Physical inspection
Durability
Source of income |
| Factors affecting real property market |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12) |
Climatic conditions
Communications
Fashion and local demand
Government policies
Individual aspects of property
Lack of market information
Local economy
Potentiality
Services
State of repair
Time element
Topography of the area |
Determination of value of real property
Estate brokers
Questions
|
Chapter 3 : INTERESTS IN REAL
PROPERTY
General
Types of interests |
| I |
Freehold interests |
| |
(i)
(ii) |
Law of the land
Right of others |
| II |
Leasehold interests |
| |
|
Reasons for creating
leasehold interest
Nature of leasehold interest
Renewal and
extension of leases
Theory of sinking fund
Lessor and lessee
Forms of lease
Lease and license |
| Mortgage |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9) |
Amount of loan
Insurance
Leasehold property
Period of loan
Remedies to recover loan
Subsequent mortgages
Third party guarantee
Types of
mortgage lenders
Valuation |
Equitable mortgage and legal mortgage
Development process
Questions
|
Chapter 4 : METHODS OF VALUATION
| General |
| I |
Methods of valuation for open lands |
| |
(1)
(2)
(3) |
Comparative method
Abstractive method
Belting method |
| II |
Methods of valuation for lands with buildings |
| |
(1)
(2)
(3)
(4)
(5) |
Rental method
Direct comparisons of the capital value
Valuation by reference to profits
Valuation based on the cost or contractor’s method
Residual or development
method |
Conclusion
Questions
|
Chapter 5 : OUTGOINGS
Definition
Usual types of outgoings |
(1)
(2)
(3) |
Municipal taxes
Government taxes
Annual repairs and maintenance |
| |
(i)
(ii)
(iii) |
Types of repairs
Conditions of tenancy
Allowance |
(4)
(5) |
Management and
collection
Insurance |
| |
(i)
(ii)
(iii) |
Provision
Rate
Value |
(6)
(7)
(8) |
Vacancies and
bad debts
Sinking fund
Miscellaneous |
Conclusion
Questions
|
Chapter 6 : DEPRECIATION
Meaning of the term
Depreciation as cost in operation
Depreciation as decrease in worth |
I
II
III |
Physical conditions
Functional obsolencence
Economic obsolescence |
| Methods for estimating cost depreciation |
(1)
(2)
(3)
(4)
(5)
(6) |
Straight-line method
Constant percentage method
Quantity survey method
Sinking fund method
Sum of the digits method
Unit cost method |
| Cost of construction |
I
II
III |
Area of building
Cubical contents of building
Detailed or itemwise method |
Cost depreciation and value depreciation
Reproduction cost and replacement cost
Depreciation and depletion
Conclusion
Questions
|
Chapter 7 : VALUATION OF LICENSED
PREMISES
General
General principle of valuation |
(1)
(2)
|
Closing of business
Liabilities |
| Valuation of a cinema |
| |
First method
Second method |
| Valuation of a hotel |
(1)
(2)
(3)
(4)
(5)
(6)
(7) |
Commercial hotels
Ideal situation
Lift
Management
Occupancy rate
Packing facilities
Standard of
accommodation |
| Questions
|
Chapter 8 : VALUATION OF LIFE
INTERESTS
General
Types of life interest |
(1)
(2) |
Lessee for life
Tenant for life |
Mortality tables
Compilation of mortality tables
Application of mortality tables
Jellicoe’s formula
Questions
|
Chapter 9 : VALUATION FOR RATING
General
Definitions |
(1)
(2)
(3)
(4)
(5) |
Assessment
Rate and tax
Rate-payer
Annual value
Rateable value |
| Principles of rating |
I
II |
Principle of communibus annis
Principle of Rebus Sic Stantibus |
| Rent as evidence of annual value |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8) |
Benefits to owner
Foresight of tenant
Occupied by owner
Premium
Property on lease
Repairs of existing building
Short-term tenancies
Special circumstances |
| Hypothetical tenant and hypothetical rent |
(1)
(2)
(3)
(4)
(5)
(6)
(7) |
Actual occupier
Actual rent
Adoption of principle
Competition
Residential accommodation of staff
Special necessities of actual occupier
Standard rent |
| Exemptions from rateability |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10) |
Charitable institutions
Properties of Government
Houses of ambassadors
Literary and scientific
societies
Public religious places
Land struck with
sterility
Properties of
local body
Special properties
Burial grounds
Miscellaneous |
Process of assessment
Methods of assessment |
(1)
(2)
(3)
(4) |
Direct or indirect rental evidence
Contractor’s test
Profit method
Site value method |
Conclusion
Questions
|
Chapter 10 : VALUATION OF AGRICULTURAL
LANDS
General
Importance |
(1)
(2)
(3) |
Crop loans
Development loans
Investment loans |
| Factors affecting value of agricultural land |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9) |
Cottages and buildings
Fencing and gates
General situation
Quality of soil
Roads and approaches
Size of farm
Title of land
Types of crops
Water supply and electricity |
| Methods of valuation of agricultural lands |
I
II |
Income capitalisation method (ICM)
Sales statistics method (SSM) |
Agricultural land and direct tax laws
Questions
|
Chapter
11 : FINANCE FOR INVESTMENT IN REAL PROPERTIES
General
Terms of borrowing |
(1)
(2)
(3)
(4) |
Rate of interest
Reputation of borrower
State of economy
Type of property |
| Sources of borrowing |
I
II |
For residential properties
For commercial and industrial properties |
| Gearing and equity |
(1)
(2)
(3) |
Cost of borrowing
Increase in interest
Increase in rent |
Conclusion
Questions
|
Chapter 12 : VALUATION TABLE
| General |
Table I
Table II
Table III
Table IV
Table V
Table VI
Table VII
Table VIII |
:
:
:
:
:
:
:
: |
TO FIND THE AMOUNT TO WHICH Re. 1/- WILL ACCUMULATE AT THE END OF A GIVEN TERM AT COMPOUND INTEREST
TO FIND THE PRESENT VALUE OF Re. 1/- RECEIVABLE AT THE END OF A GIVEN TERM
TO FIND THE AMOUNT TO WHICH Re. 1/- PER ANNUM INVESTED AT THE END OF EACH YEAR WILL ACCUMULATE IN A GIVEN TIME AT COMPOUND INTEREST
TO FIND THE AMOUNT OF THE ANNUAL SINKING FUND FOR THE REDEMPTION OF Re. 1/- CAPITAL
TO FIND THE PRESENT VALUE OF Re. 1/- PER ANNUM FOR A GIVEN NUMBER OF YEARS ALLOWING SIMPLE INTEREST ON THE CAPITAL AND ACCUMULATION OF AN ANNUAL SINKING FUND
TO FIND Y.P. OF A REVERSION TO A PERPETUITY AFTER A GIVEN NUMBER OF YEARS
TO FIND THE ANNUITY
Re. 1/- WILL PURCHASE ON THE SINGLE RATE PRINCIPLE
TO FIND THE DEPRECIATION PERCENTAGE BASED ON SINKING FUND METHOD
|
Chapter 13 :MISCELLANEOUS TOPICS
| General |
I
II
III
IV |
Capitalised value
Cost inflation index
Deferred or reversionary land value
Discounted cash flow |
| |
(1)
(2) |
Net present value
(or N.P.V.) method
Internal rate of return
(or I.R.R.) method |
V
VI
VII |
Encumberance factor
Floating F.S.I.
Forms of rent |
| |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19) |
Rack rent
Head rent
Leasehold or
lease rent
Statutory rent
Ground rent
Improved rent
Profit rent
Annual or monthly
or weekly rent
Contractual rent
Standard rent
Nominal rent
Acknowledgement
rent
Situation rent
Monopoly rent
Intangible rent
Sitting rent
Rent charge
Gross rent
Net rent |
VIII
IX |
Life of structures
Mesne profits |
| |
Ingredients of Mesne profit |
X
XI |
Mobilisation fund
Rate of interest |
| |
Money and banking
Bank rate
Shops
Offices
Factories and warehouses
Residential properties
Agricultural properties |
| XII |
Record of rights |
| |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9) |
Category of land
Classification of land
Encumbered land
Holder of land
Land under acquisition or reservation
Nature of holding
Occupant of land
Period of validity
Restriction on transfer |
XIII
XIV |
Valuation as a going concern
Valuation under Direct Tax Laws |
| |
(1)
(2)
(3) |
Valuation under
Income Tax Act
Valuation under
Wealth-tax Act
Valuation under
Gift Tax Act |
| XV |
Year’s purchase
Single rate and dual rate for Y.P. |
| Questions
|
Chapter 14 : EASEMENTS
General
Definition
Essential characteristics of easements
Creation of easements |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9) |
By grant
By necessity
By quasi-necessity
By prescription
By lost grant presumed from immemorial user
By custom
By transfer of dominant heritage
By legislation
By the operation of the doctrine of acquiescence |
| Extinguishment of easements |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12) |
By dissolution of right
of servient owner
By release
By revocation
By expiration
of period
By happening of event
By end of necessity
By easement becoming
useless
By permanent change
in dominant heritage
By permanent change
in servient heritage
due to superior force
By destruction
of either heritage
By unity of ownership
By total non-enjoyment |
Easements and natural rights
Effect on valuation due to easement
Questions
|
Chapter 15 : STANDARD RENT
General
Objects of Rent Act
Meaning of standard rent
Exemptions from the Rent Act
Process of fixing standard rent
Methods of ascertaining standard rent |
(1)
(2) |
Comparative method
Investment theory |
| Important factors |
(1)
(2)
(3) |
Cost of construction
Loading and apportionment of land value
Period of first letting |
| Inheritance of tenancy right |
(1)
(2)
(3)
(4)
(5) |
Business premises
Lone tenant
Members of family
Single person
Transfer by will |
Paying guests and Rent Act
Recovery of possession from tenant by landlord |
(1)
(2)
(3)
(4)
(5)
(6) |
Bad behaviour
of tenant
Domestic animals
Erection of permanent
structure
Failure to pay rent
Personal requirement
of landlord
Undesired use
of property |
| Conclusion |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9) |
Application
Cut-off period
Cut-off rent limit
Exemptions
Legalising the pugree
Permitted increases
Repairs and tax
obligations
Smooth legal
procedure
Take-over of old
buildings |
| Questions
|
Chapter 16 : COMPULSORY ACQUISITION
OF LAND
General
The Land Acquisition Act, 1894 |
|
Basic principles
Procedure under The Land
Acquisition Act, 1894 |
| Important aspects of the L.A.Act, 1894 |
(1)
(2)
(3)
(4)
(5)
(6)
(7) |
Public purpose
Proposal for acquisition
Compensation
Solatium
Severance
Injurious affection
Loss of earnings |
| Questions
|
Chapter 17 : THE TRANSFER OF PROPERTY ACT
General
Meaning of transfer |
(1)
(2) |
Family arrangement
Partition |
Definition of transfer of property
Requirements of a valid transfer
Contigent Interest
Conditional transfer
Sales of immovable property |
| |
Rights and liabilities of |
| |
–
– |
seller
buyer |
| Mortgages of immovable property |
(1)
(2)
(3)
(4)
(5)
(6) |
Simple mortgage
Mortgage by
conditional sale
Usufructuary mortgage
English mortgage
Mortgage by deposit
of title deeds
Anomalous mortgage |
Leases of immovable property
Exchanges
Gifts
Actionable claims
Conclusion
Questions
|
Chapter 18 : URBAN LAND CEILING ACT
General
Selection of towns
Objects of the Act
Important provisions in the Act |
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8) |
Definitions
Transfer of vacant land
Acquisition of excess land
Payment of amount for the acquired vacant land
Distribution of excess vacant land
Exemptions
Construction of future residential buildings
Procedural and miscellaneous matters |
| Effects of the U.L.C. Act |
(1)
(2)
(3)
(4)
(5)
(6)
(7) |
Absence of skyscrapers
Administrative
arrangement
Danger of too many houses
for weaker sections
Development of
small towns
Heterogenous
communities
Role of urban
development authorities
Valuation of urban
properties |
Summary
Questions
|
Chapter 19 : TYPICAL PROBLEMS
| Problems with solutions from 19-1 to 19-14
|
APPENDICIES
| APPENDIX I |
: |
Important judgements and decision |
| |
|
General |
|
| |
|
No. 1 |
Valuation of rented house properties |
| |
|
No. 2 |
Site leased out |
| |
|
No. 3 |
Annual letting value |
| |
|
No. 4 |
Principles of valuation of immovable property |
| |
|
No. 5 |
Valuation of incomplete building |
| |
|
No. 6 |
Onus of establishing understatement |
| |
|
No. 7 |
Wealth-tax valuation |
| |
|
No. 8 |
Compensation for acquisition |
| |
|
No. 9 |
Principles of valuation |
| |
|
No. 10 |
Rate of return for rented properties |
| |
|
No. 11 |
Rate of return for rented properties-1 |
| |
|
No. 12 |
Rental method of valuation proper for property let out to tenants |
| |
|
No. 13 |
Annual value |
| |
|
No. 14 |
Understated consideration |
| |
|
No. 15 |
Rule 1 BB applicable for grant of probate |
| |
|
No. 16 |
Valuation by Rule 1 BB of Wealth-tax Act |
| |
|
No. 17 |
Schedule III applicable to pending cases |
| |
|
No. 18 |
Cost of construction |
| |
|
No. 19 |
Cost of construction-1 |
| |
|
No. 20 |
Depreciation for theatre building |
| |
|
No. 21 |
Valuation report recieved after assessment held
not to form part of record |
| |
|
No. 22 |
Valuation of house |
| |
|
No. 23 |
Deduction for joint ownership |
| |
|
No. 24 |
Applicability of Rule 1 BB for Gift-tax purpose |
| |
|
No. 25 |
Capital gain |
| |
|
No. 26 |
Land covered by U.L.C. Act |
| |
|
No. 27 |
Pre-emptive purchase |
| |
|
No. 28 |
Acquisition of property |
| |
|
No. 29 |
Pre-emptive purchase-1 |
| |
|
No. 30 |
Acquisition of property-1 |
| |
|
No. 31 |
Pre-emptive purchase-2 |
| |
|
No. 32 |
Basis of assessment for rateable value |
| APPENDIX II |
: |
Valuation tables |
| |
Table I |
AMOUNT OF Re. 1/- AT THE END OF A GIVEN TERM |
| Table II |
PRESENT VALUE OF Re. 1/- RECEIVABLE AT THE END OF A GIVEN TERM |
| Table III |
AMOUNT OF Re. 1/- PER ANNUM AT THE END OF A GIVEN TERM |
| Table IV |
ANNUAL SINKING FUND FOR THE REDEMPTION OF Re. 1/- CAPITAL |
| Table V |
PRESENT VALUE OF Re. 1/- PER ANNUM ALLOWING INTEREST OF 4% ON CAPITAL |
| Table VI |
Y.P. OF A REVERSION TO A PERPETUITY AFTER A GIVEN NUMBER OF YEARS |
| Table VII |
MORTGAGE INSTALMENT TABLE SHOWING MONTHLY SUM TO REDEEM Rs. 100/- BORROWED |
| Table VIII |
DEPRECIATION PERCENTAGE AT 3.5%
|