A commercial parcel’s rear third is not required to support its primary use and has no feasible separate use or sale. It cannot be split off. How should it be classified and valued?
Correct Answer
D) As surplus land with its contribution to the whole analyzed
The stated unnecessary inseparable rear area is surplus land. Analyze its contribution to the whole based on utility and market evidence; no automatic lower unit rate is established. It remains part of the legal site area and is not a depreciable physical improvement.
Why This Is the Correct Answer
Option D is correct because land that does not support the existing improvement and cannot be sold separately or support an independent use is surplus land. Surplus land cannot be separated from the appraisal unit, so its contribution to the whole is analyzed. No automatic lower or full unit rate applies; market evidence decides.
Why the Other Options Are Wrong
Option A: As excess land valued separately at the full unit land rate
Option A, excess land valued separately at the full unit land rate, does not fit because excess land must be capable of separate use or sale, and this rear area cannot be split off. Applying a full separate rate would ignore its limited utility.
Option B: As acreage removed from the legal parcel
Option B, acreage removed from the legal parcel, is wrong because the rear third remains part of the legal site. Its limited utility affects value, not the legal area.
Option C: As a depreciable building component
Option C, a depreciable building component, is wrong because land is not a building component and is not depreciated as an improvement.
Excess exits, surplus stays
Excess land can exit through a separate sale; surplus land stays attached to the main site.
How to use: Use this phrase to classify extra land by whether it can be separated.
Exam Tip
Ask whether the extra land can be split off or sold separately; if not, it is surplus land.
Common Mistakes to Avoid
- -Calling inseparable extra land excess land
- -Valuing surplus land separately at the full land rate
- -Removing surplus land from the reported site area
Concept Deep Dive
Analysis
This question tests the distinction between excess land and surplus land. Land not needed for the primary use that cannot be separately used, sold or split off is surplus land. Its value is its contribution to the whole, analyzed from utility and market evidence.
Background Knowledge
Excess land is extra land not needed for the primary use that can be separately used or sold and may be valued separately. Surplus land is extra land that cannot be separated and does not have an independent highest and best use. Surplus land may contribute some value to the whole, which the appraiser measures with market evidence.
Real-World Application
A big-box store sits on a lot with an unused rear strip that has no street access and cannot be divided under local rules. The appraiser treats it as surplus land and studies how much it adds to the whole property, such as for storage or buffering.
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Previous Question
Sale price per acre is a vacant-land unit of comparison. A comparable vacant tract of 15.0 acres sold for a cash-equivalent $1,800,000 and is otherwise similar to the subject in HBU and market conditions. What indicated site value does that unadjusted per-acre rate support for a subject tract of 11.0 acres?
Next Question
An improved property has a value of $1,750,000. Sales of similar properties in the market area indicate that land accounts for 22% of total value. What is the indicated land value by allocation?