HIGHEST AND BEST USE Charles Johnstone, FRICS, AACI, M.I.M.A.
Highest and Best Use is like family, it is foundational but often overlooked. Whether creating a mass appraisal for assessment purposes or completing a single property appraisal report for an assessment appeal, determining the highest and best use of a property, or a group of properties, is critical, as the highest and best use (HABU) determines what properties are comparable and therefore suitable for inclusion in the dataset for analysis. An error in determining the HABU will almost certainly result in an erroneous estimate of value. Over the past 20 years there has been an evolution in the definition of HABU away from the most profitable use legally permissible to what is the most probable use that a property will be put to as of the valuation day? The Appraisal of Real Estate 4th Canadian Edition states “the most probable use is the basis for determining the most probable selling price of a property.” Just as the definition of market value has evolved from the highest price to the most probable price, so too has the definition of HABU evolved from the most profitable use to the most probable use. What does this mean and what impact will the evolution of the HABU definition have on Assessment practitioners? Charles and Haydn Johnstone will introduce the latest definition of Highest and Best Use, explore the challenges of defining HABU, identify emerging trends, and describe some of the pitfalls from a mass appraisal perspective using case studies from across Canada. Join the Institute of Municipal Assessors (IMA) and the Alberta Assessors’ Association as they present the first Canadian Assessors Summit - Excellence Through Collaboration on March 6th & 7 Highest & Best Use will be the focus of the first day of the Summit, you’ll hear from Charles Johnstone, FRICS, AACI, M.I.M.A. and Haydn Johnstone, AACI, P.App, as they introduce the latest definition of Highest and Best Use! Followed by a panel discussion where where Carlos Resendes, M.I.M.A., IMA’s 1st Vice-President, will guide top leaders in the industry through a discussion about the differences and similarities they see in both HABU and Current Use. Register on the IMA website today!
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IMA | INSTI-NEWS
