A reduction in utility and consequently
a loss of value resulting from an impairment
of physical condition.
The amount of physical deterioration
ultimately translates into
depreciation (the cost to cure),
resulting from the actual breakdown of
structures and their components.
Physical Deterioration - Curable
Curable Physical Deterioration refers to
the physical breakdown of structures and
their components that the prudent owner
would anticipate correcting immediately.
Such curable deterioration is frequently
referred to as
deferred maintenance.
Physical Deterioration -
Incurable
Involves the physical breakdown of
structures and their components that are not
feasible to correct, based on the market
conditions as of the date of the appraisal.
The cost of correcting or curing the
deterioration is greater then the
anticipated cost of utility, and hence it
would be less costly not to cure the
deterioration.
Incurable physical deterioration can be
either short lived or long lived.
Short-Lived Deterioration
Components that are not yet ready to be
replaced but will require replacement
sometime before the end of the remaining
economic life of the structure. In other
words, their life expectancy is less then
the remaining economic life of the building.
Long-Lived Deterioration
Components that have suffered some
physical deterioration but will not require
replacement during the economic life of the
structure.
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