Pre-Payment Rental Discount: What purpose does it serve?

A tenant/resident can demand a rental discount by making the agreed upon rent payment before the 1st day of the month. However, the landlord/owner should receive the rent payment before the date. The owner can  charge the full rent payment if he/she receives it after the 1st day of the month even if it is due to poor mail delivery. The landlord and the tenant/tenants need to sign a Pre-Payment Rental Discount agreement where the terms and conditions of the contract are clearly stated, which both the parties need to follow.

Required information for the agreement

You need to fill out the following fields in a Pre-Payment Rental Discount agreement with accurate information in order to make it valid.

* Name of the owner/landlord
* Due date of the rental payment
* The amount of rent if paid between 1st and 4th of the month
* The amount of regular monthly payment
* Pre payment discount if rent is paid before 1st day of the month
* The due rental amount after the discount
* The late fee amount if rent is paid after 4th of the month
* Total amount of rent if it not paid within 4th of the month (rental amount + late fee)

At the end of the agreement, the resident/residents and the manager need to sign the agreement and also mention the date on which the contract is signed.

Purpose of the rental discount agreement

A Pre-Payment Rental Discount agreement is a legal contract. It is mentioned in the contract itself that a tenant is supposed to get a discount if he/she pays the agreed upon rent before the 1st day of the current month. However, a tenant has to pay regular fees if he/she makes the payment within 1st to 4th day of the month. It is also mentioned that a resident has to pay late fees if he/she fails to pay the rental amount within the due date, that is, 4th day of the month. The late fees continue to accumulate till the tenant pays the amount due. It is usually calculated by multiplying the number of days with the late fee amount of a single day.

When resident/residents sign a Pre-Payment Rental Agreement, then it implies that they have read the agreement and they agree to act as per the contract. Therefore, it is advisable that the resident and the landlord should take legal help if they are unable to understand any of the clauses. By taking help of a real estate attorney, both the resident and landlord can avoid making mistakes while taking a property on rent or renting a property or a portion of the property to the tenant.