An appraiser is valuing a 20-acre tract zoned agricultural but crossed by a deeded right-of-way allowing public vehicular access to a lake. The right-of-way, established in 1958, is 30 feet wide and bisects the property diagonally. No compensation was paid at creation, and the landowner receives no income from it. For appraisal purposes, how should this right-of-way be classified?
Correct Answer
C) An easement appurtenant, diminishing highest and best use potential
A deeded right-of-way established by written agreement and running with the land constitutes an easement appurtenant (benefiting the dominant tenement—in this case, likely adjacent lakefront lots or the public via dedication). Because it is permanent, recorded, and restricts use of the servient estate (the 20-acre tract), it is an encumbrance that may impair highest and best use—e.g., by preventing subdivision or intensive development across the corridor. Option A is incorrect: an encroachment is an unauthorized physical intrusion (e.g., a fence over a boundary), not a legally authorized right-of-way. Option B is wrong: a license is personal, oral or informal, and revocable—not deeded or permanent. Option D mischaracterizes the instrument: covenants impose affirmative or restrictive obligations (e.g., 'no commercial use') but do not grant rights of use over land.
Why This Is the Correct Answer
A deeded right-of-way established by written agreement and running with the land constitutes an easement appurtenant (benefiting the dominant tenement—in this case, likely adjacent lakefront lots or the public via dedication). Because it is permanent, recorded, and restricts use of the servient estate (the 20-acre tract), it is an encumbrance that may impair highest and best use—e.g., by preventing subdivision or intensive development across the corridor. Option A is incorrect: an encroachment is an unauthorized physical intrusion (e.g., a fence over a boundary), not a legally authorized right-of-way. Option B is wrong: a license is personal, oral or informal, and revocable—not deeded or permanent. Option D mischaracterizes the instrument: covenants impose affirmative or restrictive obligations (e.g., 'no commercial use') but do not grant rights of use over land.
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