1.10.1. The Unit Rule. In the development of an appraisal concerning properties containing resource assets, it is particularly important to understand the unit rule.78 Property must be valued as a whole for federal acquisition purposes, with due consideration of all of the components that make up its value. Its constituent parts are considered only in light of how they enhance or diminish the value of the whole, with care being exercised to avoid so-called cumulative or summation appraisals.79 

Accordingly, it is improper to estimate the value of the surface of the property, add to it a valuation of the minerals or other resource such as water or timber (as estimated by a separate expert), and thereby conclude an opinion of total market value for the property. Not only would this result in an improper summation appraisal, as a practical matter it would also mean that no one individual could testify to the market value of the property as a whole should the matter go to litigation. For these reasons, when consultants’ reports are used in the valuation of mineral property, appraisers must strictly adhere to the requirements of Section 1.13 of these Standards relating to the use of consultants’ reports.

78 See Section 4.2.2 for a discussion of the legal basis for the unit rule.
79 See Section 4.2.2.