Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.20 - REAL PROPERTY › Subchapter 42.20.1 - Valuation of Real Property › Rule 42.20.105 - CONDOMINIUMS/TOWNHOMES

Current through Register Vol. 13, July 5, 2024
(1) It is the intention of the department to
				employ an appraisal methodology for condominiums and townhouse/townhomes (as
				defined in
				70-23-102, MCA) which is
				consistent with
				15-8-111 and
				15-8-511, MCA. The terms
				"townhouse" and "townhome" are interchangeable and, therefore, reference to one
				term incorporates the other term. The methodology must provide for a separate
				assessment of each condominium/townhome unit, and allocation of the percentage
				interest of common elements must meet the market value standard. The
				methodology must include the consideration, use, and where applicable, the
				reconciliation of the cost approach, the sales comparison approach, and the
				income approach to valuation using accepted appraisal treatises and manuals.
				This rule relates solely to the administration of revenue laws, and nothing in
				this rule should be construed to affect the legal requirements of any other
				purpose.
(2) The department will
				employ the following appraisal and assessment methodology for
				condominiums/townhomes, except for condominiums/townhomes situated on qualified
				tax-exempt community land trust property, as set forth in (6), and time-share
				condominiums, as set forth in (7).
(a) The
				preferred approach for the appraisal of residential condominium/townhome units
				is the sales comparison approach, where comparable sales are available. The
				common elements of residential condominiums/townhomes are inherent in the
				individual unit values when the sales comparison approach is employed. When
				comparable sales are not available, the cost approach must be used. In that
				instance, the condominium/townhome declaration's percentage of ownership
				interest required by
				15-8-511,
				70-23-301, and
				70-23-403, MCA, should be used to
				allocate the value. Allocation of value for each condominium/townhome unit will
				be determined by multiplying the percentage, expressed as a decimal, by the
				appraised value of the entire condominium/townhome project or by adding the
				individual unit cost to the individual unit's allocation of those elements
				deemed common. The common elements are deemed to be inherent in the individual
				unit's declaration percentage when the cost approach to value is determined and
				allocated as specified in this subsection.
(b) The preferred approach for the appraisal
				of commercial condominium units is the income approach where reliable
				condominium income and expense data are available. The common elements of
				income-producing condominiums are inherent in the individual unit values when
				the income approach is employed. When reliable income and expense data are not
				available, the cost approach must be used. In that instance, the condominium
				declaration's percentage of ownership interest required by
				15-8-511,
				70-23-301, and
				70-23-403, MCA, should be used to
				allocate the value. Allocation of value for each condominium/townhome unit will
				be determined by multiplying the percentage, expressed as a decimal, by the
				appraised value of the entire condominium/townhome project. The common elements
				are deemed to be inherent in the individual unit's declaration percentage when
				the cost approach to value is determined and allocated as specified in this
				subsection.