I just read an article about renting an apartment, and it raises an interesting point:
QUESTION: I am a landlord. Some people tell me I should collect the first and last month’s rent from a new tenant, plus a security deposit. But others tell me to just collect a security deposit and first month’s rent, instead. Which is best?
ANSWER: If you collect first and last month’s ahead of time, and your tenant stays several years, when the tenant moves out you must then accept as full payment the already-paid low last month’s rent.
Surely, this can’t be so. Right? If I move in to an apartment, and the rent is $900, and the landlord collects first month’s rent of $900 and last month’s rent of $900, but then every year he raises the rent by $100, when I move out five years’ later, is my last month’s rent only $900, or do I have to come up with the extra $500?
I assume I have to pay what’s due for the last month – $1,400, right?
This isn’t that common, of course. Mostly because any smart landlord is going to write up a new lease, every year, covering the new year and new rent.
Still, I wonder what a court would say.
How renting home each year impacts $250K tax break: Principal-residence rule worries some (2nd question) – By Robert J. Bruss, Inman News, by way of The Boston Globe