Property Valuation
In Montana, when appraising a property that is encumbered by a long-term below-market lease, the appraiser distinguishes between:
AResidential and commercial value
BLeased fee value (the owner's interest subject to the lease) versus fee simple value (as if unencumbered), with the leased fee value typically being lower due to the below-market rent✓ Correct
CMarket value and assessed value
DReplacement cost and market value
Explanation
The leased fee interest represents the owner's interest subject to an existing lease (collecting below-market rent). The fee simple value assumes the property is unencumbered.
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Key Terms to Know
Fee Simple
The highest and most complete form of property ownership — absolute ownership with the right to use, sell, or pass the property to heirs.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Math Concepts
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