Replacement Cost Valuations

In Florida, condominium associations must have a Replacement Cost Valuation inspection/report performed every three years (also known as cost replacement appraisal). A Replacement Cost Valuation provides a third-party, unbiased estimate of the cost to re-build or “replace” the entire property under the current building code in the event of a major catastrophe such as a hurricane. For condominiums, the Replacement Cost Valuation should also be the Insured Value of the property. Otherwise, the association would be either under-insured or over-insured. The Replacement Cost Valuation should be used by the board of directors to ensure the building and other structures can be rebuilt for the membership in the event of a disaster, while the insurance carrier should use the report to accurately estimate the dollar value amount to insure a property. The windstorm insurance premium for an association is often calculated based on a percentage of the Replacement Cost Valuation or Insured Value.

Our Replacement Cost Valuation Process

Our Replacement Cost Valuation process begins with our initial research into the condominium's improvements. A comprehensive field inspection of the community is performed to verify and/or calculate items such as the square footage of the buildings, type of construction, property condition, etc. We exclusively use Marshall & Swift’s CoreLogic data valuation software system, the industry’s leading software platform, to calculate replacement cost. The system performs a complex set of computations based on property data recorded during the field inspection and micro and macroeconomic data of the local market such as the current cost of labor, materials, taxes, fees, overhead, and profit to estimate the cost to reproduce the improvements as of the date of the report.