Final answer:
Market rent is the theoretical rent a similar property would command under current market conditions, not necessarily the same as the rent stipulated in a lease (contract rent).
Step-by-step explanation:
The correct statement about market rent is that it is the rent that landlords could expect to receive for a property if it were available for lease at the current time, reflecting its quality and location, as well as current supply and demand conditions in the market.
Market rent is not necessarily the same as contract rent, which is the rent actually paid under a lease agreement. Market rent does not reflect the specific conditions and restrictions of an individual lease agreement; rather, it represents what a similar property would theoretically rent for under current market conditions without any specific lease terms.
When a property is subject to rent control policies, the market rent can be considerably higher than the contract rent because rent control caps the amount landlords can charge, potentially distorting the actual value of the living space. This can lead to a lower quality of housing, as landlords may not be incentivized to maintain the property well due to the limited return on their investment. Understanding the difference between market rent and contract rent is crucial in appraisal and real estate economics.