Incurable Depreciation
Definition of "Incurable depreciation"
Occurs when the cost of repairing a component of a building structure exceeds the value of the structure and is therefore uneconomical to perform. For example, because of extensive settling, the foundation of an old home crumbled and had to be replaced. However, the cost of replacing the foundation with the structure on it exceeded the value of the structure. Therefore, it was considered incurable depreciation and the building was condemned and razed.
When purchasing a property that is in need of a lot of work, it is a good idea to have a surveyor, engineer and contractor assess the amount and cost of the work to know the true value of the property.
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