Maryland Home Improvement PSI Practice Exam

If an older building cannot be air-conditioned, it is an example of ___________?

1. Economic obsolescence.

2. Functional obsolescence.

3. Physical deterioration.

4. External deterioration.

The correct answer is: Functional obsolescence.

When an older building cannot be air-conditioned, it primarily reflects functional obsolescence. This term refers to a reduction in the usefulness or desirability of a property due to some inherent feature that is no longer considered ideal or necessary by current standards. In this case, the inability to air-condition the building means it may not meet modern expectations for comfort and utility, which decreases its marketability and overall value. Functional obsolescence can arise from outdated designs, lack of desirable amenities, or inefficient layouts that do not align with contemporary living or working conditions. The presence of central air conditioning is often a standard expectation for many buyers and tenants today, so a building lacking this feature can be considered deficient in its functional capabilities. In contrast, economic obsolescence refers to issues outside the property, such as neighborhood decline or changes in zoning laws, while physical deterioration involves the actual wear and tear of the physical structure. External deterioration is also related to outside factors affecting the property. Each of these concepts plays a different role in assessing property value and condition, but functional obsolescence is specifically tied to the building's failure to meet current functional standards.