What happens with "last months rent" if tenant resigns?

Question

I had my tenants pay first and last months rent wen signing plus a security deposit.

Their year is almost up and they would like to resign. I gave them notification that I will be raising rent on this new contract.

Should last months rent that they paid in the beginning just get transferred to the new contract plus the rent increase? They were asking about not paying rent for this month since they already paid for it but then the would just have to give me a new last months rent on the new contract. Am I correct in this thinking?

Kim Meredith Hampton · Answer

@Brett M. I always transfer the last months rent to the new lease, they technically are not in their last month, unless they are moving out.

Olivia Grabka · Answer

@Brett M.

1. Keep rent escrowed

2. Let them know it will be used at the end of their new lease and that they will need to pay the difference between the amount escrowed and the new rate

Issue this in writing

Nathan Gesner · Answer

Your policy is "last month's rent plus deposit."

If they use the last month's rent on this lease, then you will have to charge them a new last month's rent for the new lease. Either way, they are paying last month's rent on the new lease, so they should just push the existing payment to the next lease.

Brett M. · Answer

I guess the upside for option B is they they could get a little short term cash but then they resign they will be hit with a larger bill.

Brett M. · Answer

Yep I just asked them I can do it the two ways

A) transfer over previous last months rent plus the rent increase

or

B) when they resign charge them a new first and last months rent.

Ryan Murdock · Answer

@Brett M.

Same as @Kim Meredith Hampton I always transfer to the new lease and have never once been challenged on it.

However, it is an interesting point since although it's not the last month of occupancy it is the "last month" of the current contract - they could claim to just want to re-pay it at the start of the new contract. If push comes to shove it may come down to the wording of the lease. And if it gets pushed that hard I'd reconsider signing that new lease......

What happens with "last months rent" if tenant resigns?

What happens with "last months rent" if tenant resigns?

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