Which of the following is a form of functional obsolescence?

Functional obsolescence refers to a reduction in the desirability or utility of a property due to outdated features or designs that do not meet current market standards or buyer expectations. This concept encompasses scenarios where a property may still be structurally sound but fails to satisfy contemporary needs or preferences.

Choosing outdated building designs or features as a form of functional obsolescence is accurate because this condition directly impacts the potential use or appeal of a property in the current market. For example, a layout that was popular a few decades ago may not be functional for modern living, or a lack of current technology such as energy-efficient systems can render a property less desirable.

In contrast, physical decay of the structure pertains to wear and tear over time, which is not typically categorized as functional obsolescence but rather as physical obsolescence. Environmental issues refer to factors that may not be related to how the building functions itself, such as pollution or local zoning changes. Lastly, excessive wear and tear due to tenant neglect impacts the condition but isn't a commentary on a property’s design or functionality. Understanding these distinctions is crucial for evaluating real estate value accurately.