The Role of a Real Estate Valuer in a Divorce Hearing
Divorce or separation proceedings often involve complex asset divisions, especially when there’s a business at stake. When a real estate agency and/or rent roll forms part of the marital asset pool, an independent business valuation will help ensure a fair outcome.
BDH Valuers is frequently called on to provide valuations for agencies and rent rolls in Victoria and other parts of Australia. Here’s some upfront information based on our experience in this area.
Why are business valuations required during a divorce or separation?
When a couple separates, the family court may require a valuation of commercial assets to help determine how everything should be divided. For real estate professionals, including independent agents, franchisees or agency owners, the business may be one of the most substantial financial interests in the asset pool, and their partner may be legally entitled to a percentage of it.
An expert valuation provides clarity on the business's real-world, commercial value at a specific point in time, giving the court the information it needs to make legally and financially sound decisions. The process involves a thorough analysis of past and recent income, expenses, goodwill, market position, risk factors and future earning capacity.
The valuation exists to allocate a dollar figure. The valuer does not decide who is entitled to what or how the asset should be divided. This is up to the couple to figure out through negotiation, or it will ultimately be for the courts to determine.
Who engages a valuer during a separation or divorce?
In divorce proceedings, either party may engage a valuer to assess the value of the real estate business. In some cases, both parties may agree to jointly appoint a single expert. In other situations, each party may engage their own expert, particularly if there is a dispute over the value.
A valuer can be an accountant, but it makes better sense to work with a property industry specialist who understands exactly how to calculate the amount a real estate or property management business is worth.
When they take on the role, the valuer should be carefully instructed regarding the factors to be considered when valuing the business and how the report must be prepared in case it needs to be used in Court. They will then provide a report and attribute a figure (even if it’s within a range) for the business's value.
The valuer’s duty is to the court, not the client
A valuer engaged in the context of a divorce hearing does not act as an advocate for the person or party who hires them. Instead, their professional duty is to the court.
When the team at BDH Valuers are engaged in these circumstances, we step in to provide an independent, unbiased assessment of the business’s value in line with the relevant valuation standards and the rules of the Family and Federal Court of Australia. The report we prepare is objective, transparent and created to be defensible under scrutiny.
What the agency or rent roll valuation process typically involves
At BDH Valuers, our approach to divorce-related valuations is thorough and impartial. A standard process may include:
A review of financial statements
Normalisation of earnings to reflect the true economic position
Assessment of goodwill, brand value and client base
Consideration of current market conditions and competitive position
Interviews with the business owner (where appropriate)
A clearly reasoned and fully compliant expert report
We’re also available to appear in court if required to give evidence and answer questions relating to the valuation.
Request a business valuation from BDH Valuers
The strength of a valuation lies in its credibility and this comes from independence, experience and professional rigour.
At BDH Valuers, we have valued numerous real estate businesses, including in family law contexts. Our team understands the pressures of divorce proceedings and is committed to delivering accurate, defensible reports that meet the court’s needs while bringing clarity to complex situations.
If you need a real estate business valuation for a divorce matter or the breakdown of a professional partnership, we’re here to help. Get in touch to to find out how I help.
Real Estate Valuation FAQS:
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Either party can engage a valuer. However, regardless of who appoints them, the valuer’s duty is to the court. Their role is to provide an objective, independent valuation, not to act in the interests of either party.
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Description texIf both parties do not agree on a joint expert, each may engage their own valuer. In such cases, both expert reports may be presented to the court, which will assess the evidence and may call on valuers to give further clarification.t goes here
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In a separation, a valuation report relating to a real estate business forms part of the legal proceedings and is typically disclosed to both parties and their legal representatives. Its contents are treated as part of the court matter and subject to the usual confidentiality provisions in family law.
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A real estate business valuation considers financial statements, adjusted earnings, goodwill, brand strength, client relationships, operating structure and market conditions, among other factors. The valuer will follow the same process as they would to estimate how much any other rent roll or agency is worth.
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This can vary depending on the complexity of the business and the availability of financial information. Most valuations for family law purposes are typically completed within 3 weeks from the date all necessary documents are received.