Property Valuation
A Mississippi industrial property is contaminated with hazardous waste. An appraiser valuing the property must:
AIgnore the contamination since it has not been confirmed by testing
BAcknowledge the contamination, note its impact on value (stigma, remediation costs), and develop a value opinion that reflects the contamination or use hypothetical condition assumptions with clear disclosure✓ Correct
CSimply not accept contaminated property assignments
DUse only the cost approach ignoring contamination
Explanation
USPAP requires appraisers to acknowledge and address known contamination in their analysis. The appraiser must reflect the contamination's impact on value — either by valuing the property as-is (including contamination discount) or by using clearly disclosed hypothetical conditions (assuming cleanup). Ignoring known contamination produces a misleading value opinion.
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