SAEE Highest and Best Use Analysis 3 — Questions and Answers
Question 1: The correct order in which the four tests of highest and best use are normally applied is:
- Legally permissible, physically possible, financially feasible, maximally productive (Correct answer)
- Maximally productive, financially feasible, physically possible, legally permissible
- Physically possible, maximally productive, legally permissible, financially feasible
- Financially feasible, legally permissible, maximally productive, physically possible
Correct answer: Legally permissible, physically possible, financially feasible, maximally productive
The tests are typically applied in sequence: legal, physical, financial, then maximally productive.
Question 2: A legally nonconforming use is one that:
- Was lawful when established but no longer conforms to current zoning (Correct answer)
- Has always violated zoning laws
- Requires a new building permit each year
- Is the maximally productive use by definition
Correct answer: Was lawful when established but no longer conforms to current zoning
A legal nonconforming use predates a zoning change and is grandfathered despite not meeting current rules.
Question 3: Which use would most likely be the highest and best use of a corner lot on a busy commercial arterial in a commercially zoned area?
- A retail convenience store (Correct answer)
- A single-family home
- An undeveloped pasture
- A private cemetery
Correct answer: A retail convenience store
Commercial retail typically maximizes value at a high-traffic commercially zoned corner.
Question 4: Consistent use theory requires that land and improvements be valued:
- On the basis of the same use (Correct answer)
- On the basis of different uses
- Without regard to zoning
- Only at liquidation value
Correct answer: On the basis of the same use
Consistent use theory holds that land and improvements cannot be valued on the basis of different uses.
Question 5: If demand for a particular use does not yet exist but is expected to develop, the property's current highest and best use is most likely a:
- Speculative or interim use (Correct answer)
- Permanent nonconforming use
- Maximally productive completed use
- Legally prohibited use
Correct answer: Speculative or interim use
When future demand is anticipated, holding the land speculatively or in an interim use can be the present highest and best use.
Question 6: Which of the following would cause a use to fail the legally permissible test?
- A deed restriction prohibiting commercial activity (Correct answer)
- Steep topography on the site
- High construction costs
- Low market rents
Correct answer: A deed restriction prohibiting commercial activity
Private deed restrictions are legal limitations that can disqualify a use under the legally permissible test.
Question 7: In highest and best use of land as though vacant, existing improvements are:
- Ignored as if the land were unimproved (Correct answer)
- Valued at full replacement cost
- Assumed to be demolished at owner expense first
- Treated as the maximally productive use
Correct answer: Ignored as if the land were unimproved
The as-though-vacant analysis disregards current improvements to focus on the ideal use of the bare land.
SAEE Highest and Best Use Analysis 3
The correct order in which the four tests of highest and best use are normally applied is: