Also known as: clear market values · fair market value
Written by attorneys · grounded in primary & secondary sources — see below
A valuation standard representing the price that property would bring through negotiation and mutual agreement after ample time to find a purchaser between a vendor who is willing but not compelled to sell and a purchaser who is willing to buy but not compelled to take a particular piece of property.
Catherine Carter, a tenant under a long-term commercial lease, validly terminates after the landlord breaches a repair covenant. On the termination date the court measures her damages by determining the clear market value of the remaining leasehold interest, which reflects what a willing assignee would pay for the balance of the term given current rental rates and market conditions.
Craig Caldwell dies owning several parcels of real estate. Within three months of appointment the personal representative prepares the inventory and lists each parcel at its clear market value as of the date of death, using recent comparable sales to establish the price a willing buyer would have paid Craig on that day.
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Charles Cunningham defaults on a mortgage and the lender forecloses. At the deficiency hearing Cunningham requests a determination of clear market value. The court finds the property's clear market value exceeds the foreclosure sale price by $40,000 and applies that amount as an offset against the claimed deficiency.
Claire Campbell holds a junior roadway easement that is extinguished when a senior mortgagee forecloses. After the senior lien is satisfied a surplus remains. The court awards Claire the clear market value of the terminated easement from the surplus before any remainder reaches the equity holder.
Colin Chambers relies on a promise of a franchise and incurs substantial expenses before the deal collapses. The court awards reliance damages measured by the amount of expenditures made in reasonable reliance on the promise that became worthless when the promise was withdrawn.
Corinne Cho, a minority shareholder, challenges a squeeze-out merger. The court determines the clear market value of her shares by reference to what a willing buyer would pay a willing seller for the proportionate interest in the corporation's assets on the merger date.
A defendant in a deficiency action may request a judicial determination of clear market value as of the foreclosure sale date. If that value exceeds the sale price after deducting surviving liens, the defendant receives an offset equal to the excess, preventing recovery based solely on a depressed auction price.
Yes. When a tenant validly terminates a lease, damages may include the clear market value of the lease on the termination date, measured by what a willing assignee would pay for the remaining term under prevailing market conditions.
The personal representative must list each asset at its clear market value as of the date of the decedent's death, using reasonable detail and noting any encumbrances.
Yes. Courts commonly rely on recent sales of comparable properties, income capitalization, or reproduction cost less depreciation to determine clear market value, provided the valuation reflects a willing buyer and willing seller under non-compulsory conditions.
…the city has “taken” their right to this superjacent airspace, thus entitling them to “just compensation” measured by the fair market value of these air rights. Apart from our own disagreement with appellants’ characterization of the effect of the New York City law, see infra , at 134-135, the submission that appellants may…