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) Identify and analyze the deeded access encumbrance as it actually is
The recorded right-of-way is an access encumbrance that must be investigated under its actual instrument and law. Determine its beneficiary, scope and permitted uses before assigning a more specific legal subtype. Width, diagonal location and lack of compensation do not alone prove a dominant parcel or a particular value deduction.
Why This Is the Correct Answer
Option C is correct because a recorded right-of-way is a known encumbrance that the appraiser must identify and analyze. USPAP calls for identifying known easements, restrictions and encumbrances relevant to the assignment. The appraiser should determine its beneficiary, scope and permitted uses from the instrument rather than guessing a subtype or a value deduction.
Why the Other Options Are Wrong
Option A: Ignore it, since a crossing of this kind is purely cosmetic
Option A is wrong because it ignores the crossing as purely cosmetic. A deeded public vehicular access route across the tract is a property-rights encumbrance that can affect use and value, so it must be analyzed, not ignored.
Option B: Assume it is revocable personal permission despite the recorded deed
Option B is wrong because it assumes revocable personal permission despite the recorded deed. A license is informal, revocable permission, but this right was created by a recorded deed, so the appraiser cannot simply assume the weaker interest.
Option D: Assume it is only an income-producing covenant for the owner
Option D is wrong because it treats the right-of-way as an income-producing covenant for the owner. The facts say the owner receives no income, and the instrument grants access to others, which burdens rather than benefits the owner's rights.
Read the deed, then decide
For any recorded access right, ask three things from the document: who benefits, what use is allowed, and where it runs.
How to use: Use these three questions before labeling any easement-type encumbrance on an exam or in practice.
Exam Tip
When a question piles on physical details about an encumbrance, the better answer is usually to identify and analyze it from the actual instrument rather than ignore or relabel it.
Common Mistakes to Avoid
- -Ignoring a recorded right-of-way as if it had no effect on property rights
- -Treating a deeded access right as a revocable license
- -Assigning a fixed value deduction from width or location alone
Concept Deep Dive
Analysis
This question tests how an appraiser handles a recorded access right that crosses the subject. The details about width, age, diagonal path and lack of compensation are there to tempt a quick label or value conclusion. The supportable response is to identify the encumbrance from the actual instrument and analyze its scope and effect.
Background Knowledge
Easements, licenses, restrictive covenants and other encumbrances limit the bundle of rights in a property. An appraiser identifies known encumbrances and reads the actual instrument to understand who benefits, what uses are allowed and where the right lies. The market effect is then analyzed with evidence rather than assumed.
Real-World Application
An appraiser valuing rural acreage finds a recorded public access road to a lake crossing the site. The appraiser obtains the deed, notes the permitted uses and location, and considers how the road affects usable area, privacy and buyer appeal using market evidence.
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