A property next to a sewage treatment plant is likely to experience what type of loss?

The correct answer is external obsolescence. This type of loss occurs when a property’s value is adversely affected by external factors beyond the property owner's control. In this case, the proximity to a sewage treatment plant can lead to negative perceptions regarding the property. This can result in a diminished desirability due to concerns about odors, noise, or environmental issues, which often leads to a decrease in property value.

External obsolescence is connected to factors that are external to the property itself, unlike functional obsolescence, which pertains to a loss of value due to outdated features or designs within the property. Curable obsolescence relates to fixable issues that can potentially improve the property's value but do not involve the broader external environment. Physical deterioration concerns the wear and tear on the property, which is a result of age or neglect, rather than how external factors affect the property's overall marketability and value.