Conditions Of Free Sale Of Property

From the above it follows that in conditions of free sale of property on the open market (that is, not at regulated prices), the price at which this property is sold and bought will always be market. Other prices in such conditions simply cannot be. In other words, the phrase “market price” contains a tautology.

Perhaps that is why the phrase “market prices” is not used in the Federal Law “On appraisal activity in the Russian Federation”, and its concept of price is already incorporated as market value. In addition, in the sense of the Federal Law “On appraisal activity in the Russian Federation”, the result of professional appraisal activity is the establishment of a market or other value, but not a market price.

So, the subject property of a professional appraiser can be a specific property and its consumer utility, the purpose of evaluating a professional appraiser is to determine the value of the property (but not its price), and the price is set by the market [344] .

Thus, in the current legislation two terms are used:

1) Determining the value of the property and 2) determining market prices.

The difference between these terms is that the market price is the price of a specific transaction assumed or concluded by economic entities, and the market value is the calculated value at which the transaction could be concluded.

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Thus, in accordance with clauses 4, 5 of the federal standard for evaluation “General concepts of appraisal, approaches to appraisal and requirements for appraisal (FSO No. 1)”, when determining the price of an appraisal object, the amount of money offered, requested or paid for by an appraiser is determined by participants a completed or planned transaction, when determining the value of the appraisal object, the estimated value of the appraisable object determined on the valuation date is determined in accordance with the selected cost type. Making a deal with the object of valuation is not a necessary condition for establishing its value.

It is interesting to pay attention to the fact that in the Law on Executive Procedure the term “cost” is used rather arbitrarily. For example, according to paragraph 4 of Art. 91 of the Law on Enforcement Proceedings, the bidding is declared failed, if the person who won the bidding did not pay the full value of the property within five days from the day of the bidding. In this case, we are talking about the price of a particular concluded transaction, at which the property must be paid, i.e. obviously, the payment should have been made at the price (and not the cost) of the contract concluded at the auction. Thus, the term “value” is used here as a sum of money offered and requested for property by the parties to the transaction, i.e. in fact, we are talking about the price, and not about the cost – as the calculated value.

At the same time, in hours 8, 9 of Art. 87 and Part 2 of Art. 89 of the Law on Enforcement Proceedings, the term “value” is used as a calculated value, according to which property can be put up for auction or offered to buyers. The price of the property will be determined at the conclusion of the contract, for example, during the bidding process. In the same sense, the term “cost” is used in paragraph 3 of Part 5 of Art. 80, h. 5, 8 Art. 85, Part 3, 12 Art. 87, Part 2 of Art. 96, Part 3 of Art. 112 of the Law on Enforcement Procedure.


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