What term refers to a condition known to be false in appraisals?

The term that refers to a condition known to be false in appraisals is "hypothetical condition." This term is used to describe situations that are contrary to known facts but are expressed as if they were true for the purposes of the appraisal. A hypothetical condition may be necessary when appraising a property under certain assumptions that do not reflect the actual circumstances or characteristics of the property.

For instance, if an appraiser needs to evaluate the value of a property as if it were fully renovated when, in reality, it is in disrepair, this condition would be labeled as a hypothetical condition. The appraiser must clearly state this assumption in the appraisal report because the findings would depend on an understanding that the condition is not factual but rather a theoretical scenario that the appraisal relies upon.