Property Valuation
Functional obsolescence in real property refers to a loss in value caused by:
APhysical deterioration of the structure
BOutdated design, layout, or features that reduce utility or desirability✓ Correct
CExternal factors outside the property's boundaries
DEnvironmental contamination
Explanation
Functional obsolescence is a loss of value caused by deficiencies or superadequacies in the design or function of the property, such as outdated floor plans, inadequate plumbing, or poor room layout. It differs from physical deterioration (physical wear) and economic obsolescence (external factors).
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