IMPUTED RENT

The rental income from a building assuming market rents and full occupation. The valuer should be cautious about using, or assuming that a commercial building with a large complex rent schedule would ever reach the stage that most leases are at market rent. This is because leases fall due or have new rents determined at different dates and it may well be that the building will never achieve a greater ratio of passing rents to imputed rents than that existing at the date of valuation.

This is an argument against using the shortfall method of valuation.