When an appraiser evaluates lease value, how is the appraised value divided?

When evaluating lease value, the appraised value is divided based on the interests defined in the lease terms. This approach recognizes that a lease agreement signifies a contract that outlines the rights and responsibilities of both the landlord and tenant, including how the financial aspects, such as payments and any special provisions, are allocated.

Understanding the lease agreement is crucial because it typically details the rights to the property, usage restrictions, and any rental adjustments. This specificity informs how the appraised value is consequently divided, reflecting the economic benefits each party stands to gain from the arrangement. It goes beyond a simple equal split or distribution based on market value alone, accounting instead for the unique stipulations that influence the financial outcomes for both the landlord and tenant.

The focus on lease terms emphasizes the need for appraisers to have a deep understanding of the individual agreement's language and implications in order to derive a value that accurately represents the interests involved in the lease.