How much is a co-ownership worth?

In the framework of the Horizontal Property Seminar ‘Tools and New Trends’, organized by Fedelonjas and the Sonja de Bogotá, they spoke about the importance of knowing the value of joint property and the cases in which it is necessary to make an appraisal of it. interviewed Camilo Bermudez González, president of the Board of Directors of the Sonja de Bogotá and Andrés Martinez Umami, executive president of the Sonja de Bogotá.

According to Martinez, “Law 675 of 2001 establishes that co-properties can request the appraisal of both the common areas and the private areas, but they must necessarily request that the common areas be appraised.”

What is a co-ownership valued for?

The value of joint property is basically needed to know the replacement cost that it has. That is, how much is it worth to return the property to the original construction conditions, according to Martinez.

Generally, determining this value has two functions: knowing the insurable value and on the other hand for accounting purposes. “For insurable purposes, the value of the land is not taken into account, because the value of the land is a common good that does not depreciate and therefore is not an insurable value. The insurable value is the replacement cost of the common areas. In the book value if you have to include the land, but in the same way it is handled as a replacement cost of the unit again”, assured Bermudez.

Then, those who use the value that is established in the appraisal are the insurance companies, to determine what the insurable value is.

How often should the appraisal be done?

Insurers typically require a co-ownership appraisal to be done annually, experts said.

What determines the value of co-ownership?

The value is established based on the state of conservation of the goods. “The better common areas and common services a unit have, the more value it can have. If its deterioration is allowed to accelerate, obviously its value is detrimental,” commented the president of the Board of Directors of the Sonja de Bogotá.

In which cases is the insurer responsible for the replacement value?

“In cases where there is a loss, either due to a seismic movement, fire or any calamity, the insurance company enters to evaluate what the damages were and has to pay them at its replacement cost, that is, to replace it again “, Bermudez expressed.

It is important to clarify that in the event that the damage to the common goods is due to natural deteriorationthe insurer is not liable for them.

Who makes these appraisals? 

In these cases, as for the appraisals of private goods, Law 1673 of 2013 and Regulatory Decree 556 of 2014 govern, which stipulates that appraisers must have an open registry of appraisers to be able to carry out their activity, Martinez concluded.