Under legal permissibility and current land use regulations, an appraiser must consider __________.

• A. Aesthetic considerations
• B. Reasonably probable modifications of land use regulations
• C. Market demand
• D. Tax implications

Answer: (B)

The key idea is that appraisers must account for changes in land use regulations that are reasonably probable. If zoning or other regulatory rules could be modified in a way that would enable a different, more valuable use, and such a modification is reasonably probable to occur, market participants would anticipate it and the value should reflect that expectation. So the focus is on reasonably probable modifications of land use regulations and how they could affect permissible uses and value.

Aesthetic considerations aren’t tied to regulatory permissibility in a way that must be reflected in value under current rules. Market demand drives value but isn’t the regulatory allowance aspect described. Tax implications influence net value, but they’re not the regulatory changes being considered here.