The proration of rent clause stipulates that the tenant's rent amount will be adjusted proportionally based on the number of days they occupy the property in a given period. This ensures that both the tenant and landlord are fairly compensated if the lease term begins or ends mid-month.
5.5 Proration of Rent for Partial Months. If the Term begins on other than the first day of a month, Base Rent and additional Rent from such date until the first day of the next succeeding calendar month shall be prorated on the basis of the actual number of days in such calendar month and shall be payable in advance. If the Term terminates on other than the last day of the calendar month, Rent from the first day of such calendar month until such termination date shall be prorated on the basis of the actual number of days in such month, and shall be payable in advance.
The proration of rent and any other amounts payable by tenants shall be made on the basis of actual rent collected and there shall be no proration for uncollected rent or other amounts. At Closing, Purchaser shall receive a credit for any leasing commissions and tenant improvements costs and allowances which Purchaser will be required to pay after Closing with respect to any existing Leases.
Proration of Rent. If either Landlord or Tenant exercises its right to terminate this Lease pursuant to this Article 17, all Basic Rent and Additional Rent will be prorated as of the date of such casualty.
At closing, the purchase price paid to the seller will be adjusted to account for the proration of rent paid by the Series NKES tenant, utility services as well as property taxes. To the extent any of those prorations are not feasible at closing, the prorations shall be made after the determination of the applicable amounts.
Proration of rent refers to the process of adjusting the amount of rent owed based on the actual number of days a tenant occupies a property in a given rental period. This adjustment is necessary when a tenant moves in or out on a day that does not coincide with the start or end of the usual rental period, typically one month.
When should I use Proration of Rent?
You should use proration of rent in situations where:
A tenant moves into a rental property partway through the month.
A tenant vacates the property before the end of the month.
A lease begins on any day that is not the first of the month or ends on any day that is not the last.
A rental agreement needs to be adjusted to reflect actual occupancy for a specified period.
How do I write Proration of Rent?
To write a proration of rent, follow these steps:
Determine the daily rental rate: Divide the monthly rent by the number of days in the month to calculate the daily rate.
Calculate the prorated amount: Multiply the daily rate by the number of days the tenant will occupy the property.
Include in the lease agreement: Clearly state the prorated rent amount and the time period it covers.
Example:
Monthly rent: $1,200 Days in the month: 30 Move-in date: April 10
Daily rate: $1,200 / 30 = $40 Prorated amount for April: $40 x 21 = $840
The tenant will pay a prorated rent of $840 for their occupancy from April 10 to April 30.
Which contracts typically contain Proration of Rent?
Contracts that typically contain proration of rent include:
Residential lease agreements: When a tenant’s move-in or move-out date does not align with the beginning or end of the month.
Commercial lease agreements: For businesses that need to adjust their rent due to non-standard move-in or termination dates.
Short-term rental agreements: When rentals do not conform to a full month, often seen in vacation rental contracts or subletting arrangements.
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