Property Valuation
In Arizona, 'functional obsolescence' in appraisal refers to:
APhysical deterioration due to normal wear and tear
BLoss in value due to deficiencies or super-adequacies in the property itself—features that are outdated, inadequate, or excessive relative to current market expectations✓ Correct
CValue loss caused by external factors outside the property boundaries
DDepreciation calculated on a straight-line basis over the property's useful life
Explanation
Functional obsolescence is value loss from the property's own functional deficiencies (e.g., outdated floor plan, inadequate electrical service, only one bathroom in a large house) or super-adequacies (e.g., an Olympic pool in a modest neighborhood). It differs from physical deterioration (wear) and external obsolescence (location factors).
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