An appraiser is measuring a partial taking by the before-and-after method, with no benefits or other compensation items. The whole property is valued at $500,000 before the taking and the remainder at $390,000 after it; the part taken contributes $80,000. What is the total diminution in value?
Correct Answer
C) $110,000
Before-and-after diminution = $500,000 − $390,000 = $110,000; this equals $80,000 part taken + $30,000 remainder diminution. The indicated result is $110,000. Common errors: reporting only the part taken gives $80,000; reporting only the damage to the remainder gives $30,000; reporting the remainder's before value (before value less the part taken) gives $420,000.
Why This Is the Correct Answer
Option C is correct because the before-and-after measure deducts the after value of the remainder from the before value of the whole: $500,000 - $390,000 = $110,000. That total equals the $80,000 contribution of the part taken plus $30,000 of diminution to the remainder. With no benefits or other compensation items, $110,000 is the total.
Why the Other Options Are Wrong
Option A: $30,000
Option A, $30,000, reports only the damage to the remainder: $500,000 - $80,000 - $390,000 = $30,000. It omits the $80,000 part taken; the total is $500,000 - $390,000 = $110,000.
Option B: $80,000
Option B, $80,000, reports only the contribution of the part taken and ignores the $30,000 loss to the remainder. The total diminution is $500,000 - $390,000 = $110,000.
Option D: $420,000
Option D, $420,000, is the before value less the part taken ($500,000 - $80,000), which is the remainder's value before the taking, not a loss. The total diminution is $500,000 - $390,000 = $110,000.
Before minus after, that's all
Total diminution is simply the before value minus the after value; the part taken and remainder damage are pieces inside that one difference.
How to use: Use this phrase to avoid adding the part taken on top of the before-and-after difference.
Exam Tip
When a question gives before value, after value and the part taken, compute before minus after first; the part-taken figure is usually there to tempt partial answers.
Common Mistakes to Avoid
- -Reporting the remainder's before value as the diminution
- -Reporting only the value of the part taken
- -Reporting only the damage to the remainder
Concept Deep Dive
Analysis
This question tests the before-and-after measure of a partial taking. Under that rule, total diminution equals the whole property's before value minus the remainder's after value. The figure for the part taken is a component of that difference, not an amount to add on top of it.
Background Knowledge
The before-and-after rule measures compensation in a partial taking by deducting the remainder's after value from the larger parcel's before value. This single difference captures both the value of the part taken and any damage to the remainder. Some assignments use other measures or require separate treatment of benefits, so the appraiser follows the measure the assignment requires.
Real-World Application
A highway project takes a strip of frontage from a commercial parcel, reducing access and parking. The appraiser values the whole property before the taking and the remainder after it, reporting the difference as the total diminution under the federal before-and-after rule.
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