increase rent based on oil prices

[Kenneth LaVoie]

I've heard alot about having verbiage in rental agreements / leases that allow you to increase rent based on oil prices crossing a pre determined threshold. My lawyer just emailed back and said it was pretty straight forward but didn't offer any idea or examples. Has anyone here had such experience? (I'm already aware of having tenant paid utilities whenever possible, this is for those times when it's impossible). thanks much!

[Bill Gulley]

Had me going there, as from the title, I thought you were talking about crude! How crazy would that be? Since you are in Maine, I assume it's heating oil that you are paying for.

If I were to do such a thing I would figure my max cost allowed on a sq. ft basis for each unit. Then increase rents as a sur-charge when prices increase over that allowed price to the rents.

Make sure the amount charged is made a part of the rents then due so that non-payment constitutes non-payment of rent. I'd use the actual bill, otherwise, you'll be speculating on future prices as an oil company would.

[Mitch Kronowit]

Originally posted by Financexaminer:

Had me going there, as from the title, I thought you were talking about crude!

Same here! I was thinking, well, why base rent on the price of crude. Why not something else, like a percentage of whatever bail amount Lindsey Lohan is currently out on? :mrgreen:

[Bill Gulley]

Hey Mitch, that would make a great loan index too! One point per 1,000. Remains fixed until the next bail hearing!