Functional Obsolescence

Functional Obsolescence refers to a reduction in the desirability or usefulness of a property due to outdated design features or inadequate layout that no longer meets current standards or expectations. This can occur even if the property is well-maintained and in good condition.

Examples include:

• A residential home with only one bathroom, which is less desirable in markets where homes typically have two or more bathrooms.
• An office building with a layout that does not accommodate modern open-plan workSPACes, making it less appealing to tenants.
• A commercial property with outdated technology or lack of amenities, such as insufficient parking or poor access to public transportation.

Cases of functional obsolescence can often lead to decreased property values and may necessitate renovations or upgrades to make the property competitive in the market.