What is necessary for a subdivided lot to be classified as improved?

For a subdivided lot to be classified as improved, the key requirement is that there must be a contract in place for construction. This indicates that the lot is undergoing a transformation from its raw state to one that is developed and usable. An improvement typically refers to enhancements made to the land, such as the construction of buildings, utilities, or other physical structures that add value, usability, or functionality to the lot.

A contract for construction signifies a commitment to these enhancements, signaling that work is officially planned or in progress. This status elevates the lot beyond being merely vacant land, highlighting its active use in development. Other options do not meet the criteria needed for classification: merely being sold or having tenants does not necessarily mean that improvements are being made, and a vacant lot does not qualify as improved. Thus, the presence of a construction contract is critical for categorizing a subdivided lot as improved.