If the cost to cure a functional deficiency exceeds the value added to the property, what is this called?

When the cost to cure a functional deficiency surpasses the additional value that the improvement would add to the property, it is referred to as incurable functional obsolescence. This concept relates to scenarios where the existing characteristics or features of a property result in decreased value, and addressing these deficiencies through repairs or upgrades would not result in a corresponding increase in property value.

Incurable functional obsolescence indicates permanent deficiencies due to outdated designs, layouts, or features that cannot be economically corrected. This distinction is vital in real property appraisal, as it influences the overall valuation and helps appraisers and stakeholders assess the property's worth realistically.

Other options refer to different aspects of property depreciation: curable functional obsolescence occurs when the cost of correction is less than the increase in value; functional depreciation generally encompasses a wider range of issues affecting property value; and external obsolescence pertains to external factors impacting property value negatively, such as environmental changes or economic downturns. Understanding these terms is crucial for accurately appraising properties and determining how various types of obsolescence affect value.