Assumptions and disregards define the hypothetical world in which an open-market rent review valuation is carried out.
What is an assumption?
An assumption requires the valuer to treat a specified circumstance as true. Examples may concern the condition of the premises, compliance with lease obligations, the hypothetical term or the availability of the premises to let.
What is a disregard?
A disregard requires specified matters to be ignored when assessing rent. Tenant’s improvements and occupation-generated goodwill are common subjects, although wording varies.
Why they matter
Two otherwise similar leases can produce different valuation exercises because their assumptions and disregards differ. The clause should therefore be analysed before comparable evidence is applied.