Rental question: "last months rent" when renewing a lease...

[Lisa loves Pooh]

How technically does one handle this?

If the lease is renewed, do they continue paying rent since it isn't their "last month" or do you give a "freebie month".

I'm guessing they just continue paying if they renew.

And nope--didn't specify in my lease with my tenant since legally, only a 1 year lease is permitted, so the lease stands alone and can't have any clauses tied to the next year (that I am aware of). This was our first year as landlord. But if anyone has a suggestion for a legally binding clause for next time, I am all ears.

But for now--how would I address this with the tenant when it is decision time on renewal?


Thanks!

 

[Curiouser&curiouser!]

I was never a landlord, but I have been a tenant before. The "last month's rent" was always held for the *real* last month. So if I renewed, I continued to pay. When I finally didn't renew, the last month's rent went to the very last month I lived there.

Hope that makes sense!

 

[FergieTCat]

The last month's rent is the landlord's insurance that if the tenant skips out at the beginning of the month without paying, the landlord doesn't lose the money.

Since the tenant (presumably) left a deposit which included last month's rent when they signed the lease, you would just renew the lease and the tenant continues to pay rent. If you let the tenant ride out the month with the deposit money, you again have no insurance if they skip without paying.

 

[crashbb]

My landlord just kept it. Well, they'd already cashed it last year, but I didn't get a "freebie" month.

I'll get the benefit of it in my real last month.

However, where I used to live (where it was a management board kind of thing), they did use it to pay August's rent (everyone was on a Sept-Aug year). And you had to pay another last month's rent for the next year. So, you got a freebie (August) but paid twice in September, so it evened out (except that the new rent was often higher, so you did pay a bit more). They did it this way so that the last month's rent was actually the value of that month's rent. If, for example, you lived there for 10 years, your rent would have increased. So, your "last month" rent cheque (which you gave 10 years ago) would no longer actually cover your last month's rent.

 

[malibuconlee]

I would say that the "last months rent" would transfer to the new lease. However I have never paid a "last months rent". Every place has done it differently, however I've usually paid the first months rent or pro-rated rent and the deposit which is usually equal to a months rent. I've also paid any pet deposit at the time I sign the lease.

The strange thing about paying a last month with the first, if they keep renewing the lease and you up the amount for rent, it would be a lesser amount you are holding.

 

[ohiomom28]

Must be different in different parts of the country...We pay 1st months rent and deposit. Deposit is usually equal to the monthly rent and is kept to pay for anything that is damaged. If there is no damage, the deposit is returned to the renter.

 

[mamacatnv]

The state I live in defines what can be required upon move-in.
First month rent
last month rent - exactly as worded to be used as your very last month of residency
deposit = to 1 months rent or less
pet deposits can be added as additional items due to their nature

Around here, first, last and full deposit have gone by the wayside. During the housing boom, landlords realized people could buy a house for less than the move in costs of a rental and so the trend has become. First month up front with a security deposit that ranges from 1/2 to a full month.

I moved my DS into a house near the Univ. last year
First months rent was due on the first day of the lease period and a deposit equivalent to a months rent was due at lease signing. That was for a group of college kids.

 

[Lisa loves Pooh]

Must be different in different parts of the country...We pay 1st months rent and deposit. Deposit is usually equal to the monthly rent and is kept to pay for anything that is damaged. If there is no damage, the deposit is returned to the renter.

We did it as it was the standard in our area.

The last month's rent check has actually been spent. (It went towards reconciling our relocation costs after living in two states.) We did not set it aside. (And we did properly notate it on our taxes.)

The security deposit was set aside since that is returnable to the renter upon verification of no damage, of course.

I just did not want to approach possible renewal with an expectation that was not standard. Sounds like we just keep things going if they renew and would continue to expect a rent check if they sign a new lease.

Thanks!