A key lot is a lot one side of which is adjacent to the rear of a reversed corner lot. The front side of the key lot it a continuation of the side of the corner lot. As a result, one side of a key lot can border multiple neighbor lots. A key lot can have either added value or diminished value—depending on its location.
In modern housing developments, streets are rarely laid out in a checkerboard pattern. Instead, when streets wind through a development in an irregular pattern, an occasional lot may border several adjacent lots. When several other homes back up to such a lot, the home can have a landlocked feel. Consequently, the land has a lower value. This type of lot is referred to as a key lot.
On the other hand, the location of some lots can add to their value. If a buyer needs a lot because of its strategic location to another property, that lot becomes more valuable than it would be on a stand-alone basis.
As an example, if an empty lot is located between a property owner’s home and their lakefront lot, the empty lot would become a key lot. Its value to the property owner would be significantly more than its value as a stand-alone lot.