An appraiser is engaged to value a commercial building subject to a recorded easement allowing a utility company to maintain underground power lines across the rear 15 feet of the lot. The easement was created by express grant 20 years ago and burdens the land regardless of ownership. How should the appraiser treat this easement in the appraisal?
Correct Answer
C) Analyze its impact on highest and best use and potential marketability, as it is an encumbrance affecting the bundle of rights
An easement appurtenant (like this express grant) is a nonpossessory interest that burdens the servient estate and is binding on successors. Under USPAP Standards Rule 1-2(a), the appraiser must identify and analyze all relevant property rights, including encumbrances, because they affect value, marketability, and highest and best use. An easement may restrict development, limit site planning, or create maintenance liabilities — all relevant to value. It is not a lien (which secures debt) nor a leasehold (no possession or rent).
Why This Is the Correct Answer
An easement appurtenant (like this express grant) is a nonpossessory interest that burdens the servient estate and is binding on successors. Under USPAP Standards Rule 1-2(a), the appraiser must identify and analyze all relevant property rights, including encumbrances, because they affect value, marketability, and highest and best use. An easement may restrict development, limit site planning, or create maintenance liabilities — all relevant to value. It is not a lien (which secures debt) nor a leasehold (no possession or rent).
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