A residential property is located in a subdivision governed by covenants, conditions, and restrictions (CC&Rs) recorded in 1985. One CC&R prohibits detached accessory structures over 12 feet in height. The property currently has a 14-foot-tall detached garage built in 2012. No enforcement action has been taken. How should the appraiser reflect this violation in the appraisal report?
Correct Answer
D) Note the violation in the report and analyze its effect on marketability, insurability, and potential enforcement risk per USPAP Standards Rule 1-2
CC&Rs are equitable servitudes that run with the land and remain enforceable unless extinguished by law (e.g., abandonment, laches, or statutory expiration — none indicated here). USPAP Standards Rule 1-2(a) mandates identification and analysis of all relevant property rights and encumbrances, including private land-use controls. A violation creates legal risk (e.g., mandatory removal, fines, title defects) that affects marketability and buyer perception — thus value. Calling it 'nonconforming' (A) applies to zoning, not CC&Rs; 'encroachment' (C) refers to physical trespass onto another’s land, not a violation of restrictive covenants.
Why This Is the Correct Answer
CC&Rs are equitable servitudes that run with the land and remain enforceable unless extinguished by law (e.g., abandonment, laches, or statutory expiration — none indicated here). USPAP Standards Rule 1-2(a) mandates identification and analysis of all relevant property rights and encumbrances, including private land-use controls. A violation creates legal risk (e.g., mandatory removal, fines, title defects) that affects marketability and buyer perception — thus value. Calling it 'nonconforming' (A) applies to zoning, not CC&Rs; 'encroachment' (C) refers to physical trespass onto another’s land, not a violation of restrictive covenants.
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