Construction Error Significantly Devalues Commercial Property


Appraisal ExpertThis case involves a nail salon that was being built. Over multiple revisions of the building plan, it was indicated that the floor was to be completely flat and have no grade. In the last revision, there included plans for a 2% grade. The nail salon owner didn’t realize this change, as the other plans had consistently indicated that the floor would be flat. The floor was eventually built with a 2% grade making it overly sloped. This lead to things rolling on the floor of the salon causing product and liquid spills as well as water leaks from pedicure machines. An expert in commercial property appraisal was sought to opine on the diminution of value in the property due to the sloped floor.

Question(s) For Expert Witness

  • 1. How would you evaluate the diminution of value of the property?

Expert Witness Response E-121648

I have 34+ years of experience in real estate appraisal. I frequently work on cases like this one, as I do a lot of title company work, condemnation work, and construction defect cases. I have worked extensively in appraising service stations, shopping centers, industrial planned communities, residential subdivisions, multifamily housing, single-family homes, nursing homes, congregate care centers, special purpose properties, and vacant land throughout the United States. In a case like this, there are be 3 values: the first being the unimpaired value as though the salon had a normal slope, the second being the impaired value assuming the salon has a defective floor with the grade and other construction issues described, and the third, the difference between the two, which is the diminution in value.

 

 

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