Help Calculating Refund

Help! So, I'm usually good with math issues but for some reason we are arguing about how to calculate the return of a few days of prepaid rent due back to ex-tenant.

Tenant prepaid last month's rent. Their current rent was higher than their original rent at move in.

New rent = $975/month

Original rent = $900/month

Need to return 11 days of prepaid rent.

Question: What is the proper order and formula for calculating the rent return for the 11 days in June (30 day month) and do it considering their newer rental rate? --50.45.xxx.xx

Help Calculating Refund (by WMH [NC]) Posted on: Jul 7, 2018 10:18 AM
Message:

Which is why I don't collect last month's rent...long-term tenants will have higher rent by move-out (hopefully!) but they have only paid for their original rate. And I bet there is nothing in the lease addressing this. --50.82.xxx.xx

Help Calculating Refund (by Hammer [TN]) Posted on: Jul 7, 2018 10:18 AM
Message:

In the holdover section of your lease do you have a daily calculation? We use rent/30day + any additional fees. When we prorate, we use the rent/30=daily fee amount.

--137.119.xxx.xxx

Help Calculating Refund (by JB [OR]) Posted on: Jul 7, 2018 10:28 AM
Message:

Within the lease, it is considered a deposit toward last month's rent. I am able to charge the new rental rate, just not sure if we should be making the calculation for the return and subtract the rate difference or do it in a reverse order... --50.45.xxx.xx

Help Calculating Refund (by JB [OR]) Posted on: Jul 7, 2018 10:32 AM
Message:

WMH, actually in this case I'm really glad we had the last month's rent paid because of the particular circumstances in this move out...it saved us a lot of money. --50.45.xxx.xx

Help Calculating Refund (by JB [OR]) Posted on: Jul 7, 2018 10:55 AM
Message:

So, here is my thinking:

900 divided by 30 = $30/day

30x11 = 330

330-75 = 255

$255 should be the refundable portion in my opinion

Does anyone see a problem with this method of calculation??? --50.45.xxx.xx

Help Calculating Refund (by Still Learning [NH]) Posted on: Jul 7, 2018 10:57 AM
Message:

Assuming there is no interest involved and this doesn’t happen in NH so I could be wrong. Aren’t you looking at it the wrong way? I would think instead of refunding 11 days at the new rate $357.50 you should be calculating what they owe in rent and refunding the unused portion. They need to pay for 19 days at the higher rent amount equals $617.50 owed to you. Now take the $900 you are holding and subtract the $617.50 owed to you and get $282.50 refunded to the tenant. Maybe someone else can double check my logic. --24.61.xxx.xx

Help Calculating Refund (by David [NC]) Posted on: Jul 7, 2018 11:00 AM
Message:

975 / 30 = $32.50 a day

If they stayed 19 days then you keep $32.50 * 19 = 617.50 and return $282.50 --65.188.xxx.xxx

Help Calculating Refund (by JB [OR]) Posted on: Jul 7, 2018 11:15 AM
Message:

Yes, yes, yes. Thanks SL and David. I was looking at it from the other way. This makes more sense. I knew something seemed off but couldn't decide why.

Thanks all for your input! --50.45.xxx.xx

Help Calculating Refund (by Sisco [MO]) Posted on: Jul 7, 2018 11:29 AM
Message:

$975x12 / 365 = $32.05 x 11 = $352.60 --72.172.xxx.xx

Help Calculating Refund (by JB [OR]) Posted on: Jul 7, 2018 11:31 AM
Message:

LOL, Sisco...quit. My head already hurts! --50.45.xxx.xx

Help Calculating Refund (by Ken [NY]) Posted on: Jul 7, 2018 11:52 AM
Message:

I rent by the month not the day so I would be sending them a bill not a refund --72.231.xxx.xxx

Help Calculating Refund (by Sparky [PA]) Posted on: Jul 7, 2018 12:21 PM
Message:

If tenant pre-paid last month's rent at $900, then the last month's rent would be $900, not $975. By requiring and accepting the $900 as the last month's rent at the beginning of the lease, you both agreed that the last month's rent would be $900. Did you say that $900 was the last month's rent or did you say something like that $900 would be applied toward the last month's rental amount? --100.6.xx.xxx

Help Calculating Refund (by JB [OR]) Posted on: Jul 7, 2018 12:42 PM
Message:

Sparky, like I mentioned in an earlier comment, it is considered a deposit toward last month's rent. --50.45.xxx.xx

Help Calculating Refund (by BRAD 20,000 [IN]) Posted on: Jul 7, 2018 2:04 PM
Message:

JB,

If the res paid the last month in advance, base your calculations on the payment they made ($900).

But I never understand why LLs are so quick to give away rent. Shore up your lease.

My lease is clear: Rent is prorated on the move in but not on the move out. Rent and notices are by full calendar months only. Example: resident moves out June 11 but is responsible for the entire month of June because management did not force them to leave early.

If you rent a car and turn it in early in the day you still pay for the whole day. Hotel room - same. Meal - same, you pay for the meal even if you don't finish it. Concert tickets -same, you leave early due to a sick child you don't get a refund.

BRAD --68.50.xxx.xxx

Help Calculating Refund (by Lynda [TX]) Posted on: Jul 7, 2018 2:18 PM
Message:

NO, boys. Sparky was the closest. The last month rent given was $900. That is a fixed figure. The rent increase doesn't figure in at all. You are just calculating the portion to return of the $900.

JB, your figures were correct--till you tried to subtract another $75. Unless at some point you made them pay the additional $75 (Ibet you didn't), you can only give back from the amt you were given--the $900-11 days worth.

$30x19=$570 they owe and you keep.

$30x11=$330 they don't owe and you return

You have already AGREED to that via contract. --108.87.xx.xxx

Help Calculating Refund (by NC INVESTOR [NC]) Posted on: Jul 7, 2018 2:32 PM
Message:

Although NC does not require pro rata on leaving just on move-in for those elect to the prorated rent would be at the CURRENT rent Just like a bank or credit card the current rate is the one in effect when they vacated.

Monthly proration is the current monthly rent divided by the number of days in that month. Annual proration is done differently.

If you are still taking last month rent the way to avoid confusion is to have them make up the difference to the last month rent every time you do a rent increase. Same with a security deposit. If you raised the rent 3% per annum then you should also require the 3% rate differential when the increase take affect.

--71.75.xx.xx

Help Calculating Refund (by Oregon Woodsmoke [ID]) Posted on: Jul 7, 2018 3:41 PM
Message:

My accounting, mailed to the tenants would list "prepaid rent for last month, $900"

Then I would prorate, using the $900, and the account would say, "unused 11 days, $xx returned to tenant.

If they had stayed, that $900 would have been their rent for the last month. They would not have owed the additional $75 for the rent raise.

JB can't charge for the full month. Oregon is a literal 30 days for the notice. 30 days is counted from the day notice is given, not from the first month of the rental period. --174.216.xx.xxx

Help Calculating Refund (by Small potatoes [NY]) Posted on: Jul 7, 2018 5:57 PM
Message:

I don't collect last month's rent. This is a good reason why. I do allow tenants to apply a 2nd month security deposit to last month but it would be toward the current rent at the time they clocked out. --66.87.xxx.xxx

Help Calculating Refund (by Small potatoes [NY]) Posted on: Jul 7, 2018 6:02 PM
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Help Calculating Refund

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