Rent refers to all monetary obligations (except the Security Deposit) that a Tenant pays to a Landlord for the occupancy and use of the Premises. The Security Deposit is exempted in order to avoid it being deemed income and thus taxable to the Lessor. The purpose of this section is to clearly state the consideration and how it may be adjusted during the term.
Payment refers to the dollar amount provided by the Tenant on a regular basis to the Landlord of the property for a specific period of time in exchange for the use of the Premises.
There are two common misconceptions regarding payments under the Lease. First, many Lessees assume that they will receive monthly invoices for Rent. While many landlords provide invoices as a courtesy to their tenants, the Lessor is not obligated to provide invoices. Second, many Lessees think that their most recent payment will be applied to the Base Rent due for the current month, but the Lease specifies how money is allocated. For example, a Lessee may submit a check and designate which month the rent is for (i.e. “July Rent”). If the Lessee has outstanding charges, then the money from the “July Rent” check will go towards the charges first, and then towards the rent. This can be confusing when the Lessee receives a late charge notice regard July rent.
Things to note in this section:
- Base Rent is payable in U.S. dollars on the day of the month set in Paragraph 1.5
- All monetary amounts are to be rounded to the nearest dollar
- Inaccurate invoices from the Lessor shall not supersede actual amounts due under the Lease
- Prorations are based upon the actual number of days in the month in which the proration is to occur
- Rent is to be paid to the Lessor or Lessor’s designee
- The acceptance by the Lessor of amounts that are less than what is actually due does not constitute a waiver of the Lessor’s right to collect the remaining monies due
- There is a $25 charge for any NSF/dishonored checks and the Lessor may thereafter require that all future payments be made by cashier’s check
- Payments will be applied first to accrued late charges and attorney’s fees, second to accrued interest, then to Base Rent, Insurance and Real Property Taxes and then any remaining monies to other outstanding charges