An appraiser is asked to assume a property is free of a known deed restriction. How should this be characterized?
Correct Answer
C) A hypothetical condition contrary to known fact
Why this is correct: A hypothetical condition assumes something contrary to known facts. Since the deed restriction is known to exist, assuming it is absent is contrary to fact, making this a hypothetical condition. Its use is permitted for legitimate purposes (e.g., litigation) with proper disclosure. Why the other choices are wrong: The choice calling it an extraordinary assumption about the title is incorrect; an extraordinary assumption is about an uncertain fact, not a known one. The choice calling it an ordinary limiting condition is wrong; limiting conditions describe the scope of work, not contrary-to-fact scenarios. The choice calling it a jurisdictional exception is false; this is a defined USPAP concept. Exam tip: Known fact false? = Hypothetical condition. Fact uncertain? = Extraordinary assumption.
Why This Is the Correct Answer
Why this is correct: A hypothetical condition assumes something contrary to known facts. Since the deed restriction is known to exist, assuming it is absent is contrary to fact, making this a hypothetical condition. Its use is permitted for legitimate purposes (e.g., litigation) with proper disclosure. Why the other choices are wrong: The choice calling it an extraordinary assumption about the title is incorrect; an extraordinary assumption is about an uncertain fact, not a known one. The choice calling it an ordinary limiting condition is wrong; limiting conditions describe the scope of work, not contrary-to-fact scenarios. The choice calling it a jurisdictional exception is false; this is a defined USPAP concept. Exam tip: Known fact false? = Hypothetical condition. Fact uncertain? = Extraordinary assumption.
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