Why does a Rent in Credit show after a Rent Increase

Sometimes when you do a rent increase, even if the date is correct, it can still fall in the middle of a tenants payment, especially if they pay fortnightly

Have a look at the example below

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This tenant is due to have an Increase or decrease (In this case a Decrease) on the 14th September .

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He is in arrears by quite a bit so, on the 22nd October, he pays 4,468.57. Even though October is after September Palace cannot use the new rate because the tenant was only paid up to the 30th August.

So Palace takes the 4,468.57 and works out the number of days using the rent rate of $520.00, breaks it down to days and moves it to the Paid to date of the 13th Setempber. It has to stop there as there is an increase and Palace cannot change the calculation mid-stride.

So then it takes what is left, in this case, $3,428.57 and puts it as a credit, the next time the tenant pays his rent, and let's say he pays his 420.00. Palace will add the 420.00 to the 3,428.57 = 3848.57 and then will divide it by the 420 a week and work out the paid to date from there, which in this case is 9 weeks, with a little leftover and that amount becomes the part payment.

 

 

 

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