What is a heritage designation?
Provincial Heritage Acts (in BC, AB and ON) allow municipalities to designate properties to hold its cultural value or interest in the form of a by-law. A heritage designation can be applied to a single property, an entire neighbourhood or even a district. Once a property has been deemed of heritage value, it gains public recognition along with protection from demolition or unsympathetic alteration. The main purpose of this designation is to preserve the property’s cultural value and heritage components.
What factors are considered when appraising heritage properties?
Normac uses the Cost Approach to determine replacement cost. Estimates are based on replacing a property with an equally desirable substitute while taking into consideration what has changed since the original property was built. If an owner chooses to maintain the heritage attributes upon a rebuild, the costs associated with the current façade and unique building features must be included. We consider special materials commonly found in heritage properties (e.g. brick, terra cotta, stucco, gable ends & dormer windows, projections, etc.). Valuations for heritage properties tend to be on the higher end as a result.
In order to rebuild to a like-for-like structure, we take into account the materials needed to maintain the façade and interior build of the original structure, with exception of certain components – largely within the structure – that will need to be rebuilt to current building codes. For example, copper piping or heavy-duty cast-iron piping will have to be replaced with PEX. Other components deemed functionally obsolete such as plaster & lathe interior walls, aluminium wiring, hot water heating with iron radiators, would all have to be replaced with newer technology.
What about the additional soft costs required for the rebuild?
Given the unique components found in heritage properties, rebuilding those parts of the building is atypical and more expensive. As a result, we build into our cost estimates the additional soft costs incurred such as architectural, engineering, and design. Furthermore, rebuilding structures with heritage components are assumed to take longer to finish and this extra time has a corresponding increase in soft costs such as site security, project management, accounting, insurance, and so forth. If these costs are not included, the property owner(s) would be at risk in the event of a total loss.
Leave it to the specialists
At your discretion, Normac will work with you to include or exclude heritage components from our appraisals and adjust the Total Insurable Value to reflect this. As Insurance Appraisal specialists, any heritage property that we appraise will have an accurate replacement cost valuation.