An appraiser is developing a site analysis for a rectangular lot zoned for single-family residential use. The legal description states '120 feet frontage by 200 feet depth,' and the survey confirms these dimensions. However, a 10-foot-wide utility easement runs along the entire 200-foot rear boundary. How should the appraiser report the usable site area for valuation purposes?
Correct Answer
B) 22,000 sq ft, because the easement area is excluded from usable land area
USPAP Standards Rule 1-2 requires the appraiser to identify and report relevant characteristics of the property, including encumbrances such as easements. While the *legal lot area* remains 120 ft × 200 ft = 24,000 sq ft, the *usable site area* — i.e., land available for development — excludes areas burdened by permanent encumbrances that preclude building or landscaping. A rear utility easement typically prohibits structures and deep-rooted planting, reducing functional utility. Appraisers routinely report both legal area and usable/buildable area, with the latter being the appropriate basis for density analysis, site value allocation, and comparison. Option B correctly identifies the reduction (120 ft × 10 ft = 1,200 sq ft easement; 24,000 − 1,200 = 22,000 sq ft usable). Option D misstates USPAP: SR 1-2 requires disclosure of encumbrances but does not mandate reporting *only* buildable area. Thus, B is correct.
Why This Is the Correct Answer
USPAP Standards Rule 1-2 requires the appraiser to identify and report relevant characteristics of the property, including encumbrances such as easements. While the *legal lot area* remains 120 ft × 200 ft = 24,000 sq ft, the *usable site area* — i.e., land available for development — excludes areas burdened by permanent encumbrances that preclude building or landscaping. A rear utility easement typically prohibits structures and deep-rooted planting, reducing functional utility. Appraisers routinely report both legal area and usable/buildable area, with the latter being the appropriate basis for density analysis, site value allocation, and comparison. Option B correctly identifies the reduction (120 ft × 10 ft = 1,200 sq ft easement; 24,000 − 1,200 = 22,000 sq ft usable). Option D misstates USPAP: SR 1-2 requires disclosure of encumbrances but does not mandate reporting *only* buildable area. Thus, B is correct.
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