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Repair or improvement


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TP commercial building roof was leaking and a claim was made with their insurance, insurance company denied the claim because the roof rafters had sagged due to age.   The whole roof top had to be torn down and rebuilt at a cost of $25K, plus the insurance company was ready to drop them if they didn't get it fixed, does this sound like a major repair or improvement?   


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The new roof does make my client better off in case they wanted to sell the building, the building's value did not change and more likely the value of the building is less than it was worth last year.  The building is located on a one-mile strip of nothing but retail businesses, high vacancy rate, high property taxes and very low rents.  I see it as they were made whole, not better off knowing their circumstances. 

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42 minutes ago, cbslee said:

Are you saying that the value building now with the new roof is less than the value of the building

with the old leaking roof with rafters that were failing?

TP said way less now after new roof and rafters because there are so many empty spaces and buildings for sale in the area, (like in many different places, businesses didn't re-open after COVID) they can ask for $200K or more if they want to sell it, but what ever is selling is going for 20-30% less than the asking price.  TP also mentioned that in a refinance appraisal, the new roof might increase the value, but not if they wanted to sell it.  I know the area and have other clients with businesses on the strip.

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