An appraiser finds that the subject's garage extends 2 feet onto the neighboring lot. It has been there for 12 years, and the state's adverse-possession period is 10 years. How should the appraiser address this?
Correct Answer
D) Report it and analyze its effect, relying on survey or legal input
An encroachment can affect title, marketability and value, so it must be reported and its effect analyzed. Whether adverse possession has ripened depends on legal elements beyond elapsed time (open, hostile, continuous use and so on), and that is a legal determination. The appraiser relies on a survey, title or legal opinion, or uses a clearly disclosed extraordinary assumption, and does not assume removal or no effect.
Why This Is the Correct Answer
Option D is correct because an encroachment can affect title, marketability and value, so it must be reported and its effect analyzed. Whether the owner has acquired the strip depends on legal elements such as open, hostile and continuous use, not just the 12 years elapsed. The appraiser relies on a survey, title or legal opinion, or uses a clearly disclosed extraordinary assumption, rather than deciding the legal question personally.
Why the Other Options Are Wrong
Option A: Note the encroachment but assume it has no effect on marketability
Option A notes the encroachment but assumes it has no effect on marketability. An encroachment can affect title, marketability and value, so assuming no effect without analysis or support skips the analysis the appraiser is required to perform.
Option B: Conclude that the owner now holds title to the strip under the garage
Option B has the appraiser conclude that the owner now holds title to the strip under the garage. Adverse possession requires legal elements beyond the passage of 10 or 12 years, and deciding whether it has ripened is a legal determination outside the appraiser's role.
Option C: Assume the garage will be cut back to the line and adjust the value
Option C assumes the garage will be cut back to the line and adjusts value on that basis. Nothing in the facts supports assuming removal; the encroachment may be resolved by removal, a boundary agreement, an easement or a legal determination, so the appraiser should report it and analyze its effect with survey, title or legal input rather than pick one outcome.
Report, analyze, rely
For a boundary or title issue, think: report it, analyze its effect, and rely on survey, title or legal input. The appraiser is not the judge of who owns the strip.
How to use: Use this whenever a question tempts you to make a legal ownership conclusion from a few facts.
Exam Tip
When an answer choice has the appraiser decide a legal issue, such as title passing by adverse possession, it is usually wrong. Look for the choice that reports the issue and relies on qualified expert input or a disclosed extraordinary assumption.
Common Mistakes to Avoid
- -Assuming title has passed simply because the statutory period has elapsed
- -Ignoring the encroachment's possible effect on marketability
- -Assuming the structure will be removed without support
Concept Deep Dive
Analysis
This question tests how an appraiser handles an encroachment that may raise a title question. The time the garage has stood looks like it settles the matter, but whether adverse possession has ripened depends on legal elements beyond elapsed time, and that is a legal determination. The appraiser's job is to report the condition, analyze its effect on marketability and value, and rely on qualified survey, title or legal input or a clearly disclosed extraordinary assumption.
Background Knowledge
An encroachment is an improvement that extends onto another owner's land, and it can cloud title and reduce marketability. Adverse possession is a legal doctrine whose outcome depends on several elements, such as open, hostile and continuous use, not only on how many years have passed. Appraisers describe and analyze such conditions but leave legal conclusions to surveyors, title professionals and attorneys.
Real-World Application
During a refinance appraisal, the appraiser notices on the plat that a detached garage crosses the side lot line. The appraiser describes the encroachment in the report, requests or reviews the survey and title information, and states any extraordinary assumption about how the issue will be resolved. The value analysis then considers how buyers in the market would react to the unresolved boundary question.
More Property Description Questions
A local zoning ordinance allows these maximum densities: R-1, 4 units per acre; R-2, 8 units per acre; R-4, 20 units per acre; PUD (with approval), 12 units per acre. Which category allows the highest density?
What design advantage is commonly associated with post-and-beam construction?
A hypothetical local ordinance permits either a single-family house or duplex on the site. The existing single-family house complies with all current rules. Which statement is supported?
A zoning variance allowing a reduced side setback is granted for a parcel. After the parcel is sold, who generally holds the benefit of the variance, subject to its conditions?
Under ANSI Z765-2021 as applied by Fannie Mae, a staircase runs from the second floor down to the first floor. Its area is counted as part of:
Under ANSI Z765-2021, as Fannie Mae requires for a detached house, where are exterior dimensions taken on a brick-veneer wall?
A building's HVAC system would be classified as which type of building component?
A home on a large tract is valued at $620,000 including the land it needs. The remaining excess land could be sold separately and contributes a net $95,000 after separation costs. What is the total indicated value?
A covered sale concerns a residence built in 1965. Which hazard is the subject of the federal pre 1978 housing disclosure rule, without assuming its actual presence?
Which site characteristic is most likely to reduce site utility by restricting where a typical dwelling can be placed?
People Also Study
Real Estate Market
13.6% of exam
Land or Site Valuation
4.5% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam
Previous Question
Under the June 2020 Fannie Mae Appraiser Update guidance for the legacy Site SFHA checkbox, part of the lot is mapped SFHA but the dwelling is entirely outside. What reporting action follows?
Next Question
A qualified HVAC assessment confirms oversizing causes short cycling, and market evidence isolates value loss from that design overadequacy rather than wear or outside factors. What cause of loss is identified?