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Updated over 7 years ago on . Most recent reply

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Jacob Barnhart
  • Durant, OK
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Help me understand this lease clause.

Jacob Barnhart
  • Durant, OK
Posted

I am going through all of the landlord paperwork that comes with The Book on Rental Property Investing provided by biggerpockets and one of the clauses in the sample lease looks like this:

"

  • a.AMOUNT: The rent for the Premises will be $__________ per month. For the period from Tenant’s move-in date, _________, through the end of the month, Tenant will pay a prorated amount of $_________ to Landlord. This prorated amount will be due on the first day of the second month of the Lease term, and a full month’s rent will be due before Tenant can take occupancy of the Premises. Tenant shall also pay $_________ towards the last month’s rent of the Lease term."

The way I am reading this it appears (assuming rent is $1,000/month) if the tenant moves in on the first day of their lease, say November 20th, they will be paying $333 for prorate on December 1st. But before the actual move-in the tenant must provide the full first months rent ($1,000) plus the last months rent ($1,000) plus a security deposit ($1,000) making for a total of $3,333 in the first two weeks.

Am I missing something here or was this just written in a less than ideal way?

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Mindy Jensen
  • BiggerPockets Money Podcast Host
  • Longmont, CO
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Mindy Jensen
  • BiggerPockets Money Podcast Host
  • Longmont, CO
ModeratorReplied

@Jacob Barnhart , this is written in this manner to protect the landlord. At the end of month 2, the tenant has paid the same amount that they would have if they paid the pro-rated month first, then the entire month second, but the landlord is more protected at the end of the first month if the tenant cannot come up with the next month's rent.

To use your numbers, the prorated amount for the first month is $333 and rent is $1000. You don't want someone moving in and having only given you $333, then not be able to come up with the $1000 for the next month. You'd have to start the eviction process with only $333 collected from the tenant. 

If  you collect the $1000 upfront, then they can't come up with the $333, you start the eviction process with a full month's rent collected. 

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