Last Months Rent
Tuesday, March 31, 2009 15:20
The Concept of Last Month’s Rent
Many landlords collect a deposit as well as what is known as the last months rent. The deposit acts as the security for repairs of the rental unit, for any significant and unrelated wear and tear damage to the unit. Whilst the last months rent applies to the actual rent that the tenant has paid in advance for occupation of the unit in that last month of their occupancy, when it arises.
The main problem that may arise with the last months rent, is when the landlord and tenant have signed a month to month agreement, and the tenant has rented the unit for a considerable period of time. These problems can also arise upon renewal or resigning of a lease.
In the first instance, the tenant paid the last months rent and has continued to rent the unit from the landlord, who may after a period of time increased the rental amount charged for the unit. This could have occurred after a year or so, and the tenant is now paying an increased rent. Upon giving notice the tenant decides to vacate the unit, the landlord is short on the last months rent – if the relationship is suitable to discuss this short payment then it should be taken up with the tenant, however the tenant is not legally obliged to adhere to this, as the onus remains with the landlord to have collected that amount. A solution for this would be to advise the tenant to pay the additional amount into the last months rent ‘account’ at the time of increasing the rent and related negotiations. An alternative to this is correctly stating in the rental agreement that such a shortfall can be recouped from the security deposit, with the only problem being that the unit may require extensive repairs that may not leave an amount over for this shortfall.
In the case of a longer term lease, and renewing the agreement, basically the same concept applies and it would be in both parties interest to adjust and record the last months rent amount accordingly. These practices may determine that the landlord and tenant part amicably at the expiration of the rental agreement.
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