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Reasonably Probable Change

by Administrator on Dec 3, 2013 General Appraisal 2448 Views

The Appraisal of Real Estate 13th Edition (Appraisal Institute) noted on page 291 that “the highest and best use of land as though vacant must be considered in relation to its existing use and all potential use. The appraiser must also consider whether there is a reasonable probability that the zoning or other restrictions could be changed in order for the highest and best use of the property to be realized.”

As an appraiser it is my understanding that if a property being appraised is not currently zoned for a specific use but it is planned for a use then there is a reasonable probability that the planned highest and best use will be realized.   Here in Clark County Nevada people (market participants) buy and sell land and rely on government planning as a basis for value.  For example, if a property that is zoned “R-E” or rural estates residential but is planned for a service commercial or tourist commercial use is sold with the expectation that the County will make good on the planned land use and allow for its commercial development.


Yes buyers who don't want to find that a property has been misrepresented check on the zoning and planning and the smart ones will even ask if the planned land use of the parcel indicates what will "likely be approved," but the governmental agency will not make a guarantee.

Sure there may be some requirements and maybe even some limitations place on the commercial development of the property, but to not allow a use consistent with the planning would send a message to the entire market that planning is just a scam and that you can’t rely on planning.  I’m sure that there have been situations when Clark County or some other jurisdiction has failed to approve any use consistent with planning, but I think it’s rare.  Of course buyers should go beyond what is displayed on a planning map and get assurances (in writing) from the government if they are buying land to develop it for a certain purpose.
An appraiser must determine what is “reasonably probable.”  That is a tall order when you are appraising a property that is in conflict.  I recently appraised a property that was the subject of a lawsuit.  It was clearly planned for a medium density residential or mixed use.  The use if allowed would have provided for up to 18 dwelling units per acre with a commercial component (like medical offices).  The opposing side claimed that an attempt had been made to make a change that failed. 

Is it still reasonably probable for a property to be used for its planned use if a zoning change was attempted and failed?  I would say yes.  There are all kinds of reasons for an application for zoning change to fail.  Usually the government board that has denied a zoning change will provide an explanation either at the hearing or in writing.

My case had an additional wrinkle, the party claiming that the change in zoning of the subject property wasn’t reasonably probable in keeping with its planning had a relative who was on the County Commission.  If a zoning change was politically blocked was it reasonably probable for the appraiser to assume that the zoning could have been changed in keeping with planning?

I don’t know about you, but when politics or political influence twists the outcome of what would normally be an approved zoning change via an application for change I am not going to agree that it is no longer reasonably probable that the zoning change will or would have occurred.  It’s like agreeing that because someone is successfully violating the law that the law does not exist.         

For more appraisal information contact Glenn Rigdon, MA, MRICS, ASA a Las Vegas / Henderson Nevada appraiser via email or via his business website Horizon Village Appraisal (, or you can also click me using “Contact Us” on the home page of this website.


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