Diminution Valuations (Non-Dilapidation)
It is now common practice for a Court to require a diminution valuation to assess damages in most property litigation matters as at the date of the “event”. Historically a builder’s estimate could form the basis of a claim but now a diminution valuation is required to assess the reduction in value. The “event” is in many cases the purchase and the Completion Date would be relevant but in other cases, “the event” is something that happens to prejudice the occupation or value of a property. Such an “event” is usually caused by the negligent action or inaction of another party, in many cases a neighbour.
For assessing diminution as at purchase, many factors have to be taken into account including the practicality of funding and occupation by the hypothetical purchaser. The factors where an “event” occurs at another time is then based upon Market Value, i.e. what would the hypothetical purchaser do in such circumstance. The difference between unaffected Market Value and actual Market Value yields the diminution figure.