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When does the tenant pay their first rent?

When does the tenant pay their first rent?

Many people ask, when purchasing a new rental property, when does the tenant pay their first rent?

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To answer this question we must understand that there is no 100% correct answer. To make this a little clearer, let's talk about the differences that different forms of payment can entail in residential lease contracts.

Contracts without Guarantees - First Rent

In unsecured contracts, the Owner, also called Lessor, may demand advance payment of rent. This is due to the fact that there is no guarantee given in advance of the tenant's use of the property and, for this reason, the law allows the charging of rents before using the property.

This is a way to ensure that the property is not used in advance of the tenant's obligations.

This form of use is less common, as the lack of guarantee, despite granting the Lessor the right to request an “Empty Report” in the event of non-payment, it has little liquidity in case of problems with the current Tenant.

We must remember that liquidity is not only related to rent values, it also has to ensure in the values ​​any broken items in the property, paint, misuse by the tenant, among other issues.

We must remember that in our current law, the period for eviction of a bad debtor can reach up to 1 year, depending on how the process unfolds and especially on the judge's reading of the case presented.

It is also important to emphasize that the owner often has to bear the fixed costs of condominium and property tax in this process until the property is vacated by the debtor.

When the tenant must pay the first rent in an unsecured contact, it is IN ADVANCE.

Guaranteed Contracts - First Rent

Contracts with guarantee are the most usual, since the Lessor is protected from any lack of payment by the Tenant by a legal security called Guarantee.

There are several types of lease guarantees that can be used: Guarantor, Surety Bond, CredPago, Escrow Deposit, among others. In case you want to know more about these types, we made a post specific to lease guarantees.

For those who choose to enter into the contract with conventional guarantees, the tenant's law says that there cannot be “two” simultaneous guarantees in the contract.

This means that the tenant's payment must be post-paid for use. In other words, use and then pay.

Usually a date is fixed in the Contract for monthly payment and, if this does not take place after 30 days from the start of the contract, the proportional amount of the lease will be charged in the first month of use.

When the Lessor asks for an advance payment of the rent, this can be considered another type of guarantee and be an illegal practice, within the Tenancy Law.

When the tenant must pay the first rent in a contact WITH guarantee, it is AFTER USE, and the amount proportional to the first month until the payment due date may be charged.

Which Adjustment for Rent Payment

The rent amount in the lease is not the same as long as the tenant pays the first rent. There is an index that readjusts contract values ​​annually.

That is, if you start your lease on March 2, 2020, you will have an adjustment on March 2, 2021 in the amount paid for the rent.

The Lease Agreement must say which index readjusts the lease agreements and it depends a lot on which one is used.

The most common indicators to readjust the rent annually are: IGPM *General Market Price Index and IPCA (Inflation Index).

 

When can the Owner increase the Rent payment amount?

The owner can only increase the rent during the term of the contract when it undergoes some kind of annual adjustment, as mentioned above. By pure and simple will the landlord cannot change the values ​​expressed in the rental contract.

There is a possibility that the value of the package (Rent + Condominium + Iptu) will increase and this will be passed on to the Tenant, but this is not reflected by the owner's desire to increase it. This must be described in the contract.

Annually the value of the IPTU increases and possibly the value of the condominium can also increase.

These values ​​can be transferred to the Tenant, remembering that the condominium value can only be charged more if there is this increase described in the minutes of the condominium assembly.

If the readjustment index is negative, does the rent decrease?

In practice, when we have a negative rent adjustment index, the rent value does not decrease. It simply stays at the same value as before.

That is, if your contract is being readjusted by the IGPM and the index for 12 months and the readjustment is 5%, you will have a real readjustment of 5% on the amount paid for rent.

Example: You pay R$1,000 monthly and after one year the IGPM value drops 5%, your rent will be R$1,005.00 next year.

If this amount is negative, -5% your rent will not be reduced by 5%, it will simply be kept at the amount paid in the previous year.

Example: You pay R$ 1,000.00 monthly and after one year the IGPM value is -5%, your rent remains at R$ 1,000.00 in the next year.

Want to calculate the amount of your rent adjustment? Take a look Calculate Here

So, what did you think of our post?

Source: Tajarat.com.pk

 

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