The valuation of properties impacted by environmental contamination usually involves which two categories?

• A. Clean and contaminated
• B. Unimpaired and impaired
• C. Pre-existing and post-contaminated
• D. Market value and replacement cost

Answer: (B)

When valuing properties affected by environmental contamination, the important framework is to compare a baseline value with and without the contamination. The two categories are unimpaired value and impaired value. Unimpaired value represents what the property would be worth if it were clean, free of contamination and stigma. Impaired value reflects the reduced worth due to the contamination, including cleanup costs, ongoing monitoring, potential use restrictions, and buyers’ hesitation. The difference between these two values shows the financial impact of the environmental issue and guides the appraisal in presenting a clear, supportable range of value that accounts for remediation and risk. Other pairings like market value versus replacement cost or simply clean versus contaminated don’t capture this explicit baseline-versus-impairment approach, which is why unimpaired and impaired is the best fit.