Rental Property - Change of Ownership & Rent Apportioning

Llala2011 on 28/11/2015 - 12:10

Hi all,

We recently completed purchase of an apartment in Southbank as our first home. The property was subject to a lease so we cannot move in until next year. The rental month on the lease starts on the 20th of each month. Since we reached settlement on 23/11, we were entitled to a portion of the rent during the rental month from 20/11 until 19/12.

Based on our calculations, the amount we should receive is based on the following:

  • Rental month 20/11 to 19/12 = 30 days
  • Owner A (previous owner) owned the property from 20/11 to 23/11 during this period = 4 days
  • Owner B (us) owns the property from 24/11 to 19/12 during this period = 26 days
  • Rent = $550/wk = $2,390/month
  • Owner A therefore should receive: (4/30*$2390) = $318.67
  • Owner B should receive: (26/30*2390) = $2,071.33

However, the property management agent used a different calculation. He used the daily rental rate to calculate Owner B's portion, then apportioned the remainder to Owner A as follows:

  • Daily rental rate = $550/7 = $78.57
  • Owner B receives: 26 * $78.57 = $2,042.82
  • Owner A receives: $2,390 - $2.042.82 = $347.18

Using the agent's calculation method, Owner A gets more than what he/she is entitled to while Owner B gets less.

After an email exchange with the agent that is now approaching 20 correspondences, the agent is still convinced that my calculation is wrong and that his is correct. I even used a hypothetical situation where had the settlement date fallen in the middle of the rental month (i.e. Owner A and B both owns the property for 15 days), his method of calculation would result in one owner receiving more than the other. However, he chose to ignore my hypothetical situation in his response and kept repeating his own calculation. I also showed him how, had the rental month have 31 days, one owner would actually receive less rent than he/she is entitled to. Once again, he ignored this in his response.

I would really appreciate help from the OzB community in analysing this situation. Are we correct or is the agent's calculation considered acceptable in the industry?

Financial

closed Comments

  • ozhunter on 28/11/2015 - 12:16
    +8

    Just looking at it, I'd go with the agent's calculation. Owner A didn't stay the whole week so just go by the daily amount.

    • lala2011 on 28/11/2015 - 12:28
      -8

      Thanks for the reply. But this is not a rental payment calculation, since Owner A is not the tenant. The tenant is not really involved in this as the ownership of the property simply changed from Owner A to Owner B. Also, had the agent calculated Owner A's portion first and then apportioning the rest to Owner B, Owner B would end up receiving more instead of less. So who makes the call on which Owner's portion to calculate first? Also, using this method, if this had occurred during a 31-day month, one owner would actually end up getting less than his/her entitlement!

  • t_c on 28/11/2015 - 12:20
    +64

    Is your time worth so little you have exchanged 20 emails and written this post over a difference of less than $30?

    • lala2011 on 28/11/2015 - 12:33
      +5

      Thanks for the reply. The answer to your question is no. In fact, I am pretty frustrated that I have spent so much time over so little money. However, it is not the $30 that I care about. What I do care about is entrusting the management of the property to an agent who I know is competent and have the ability to explain things to me clearly if there is ever any confusion. Wouldn't mind hearing your opinion on the matter, thanks.

      • t_c on 28/11/2015 - 13:09

        If rent is $550 per week then

        $550 x 52 weeks = $28600 (yearly rent)

        $28600 / 365 days = $78.36 per day

        Owner B gets 26 x $78.36 = $2037.36

        Owner A gets 4 x $78.36 = $313.44

        If rent is $2390 per month then

        $2390 x 12 months = $28680 (yearly rent)

        $28680 / 365 days = $78.58 per day

        Owner B gets 26 x $78.58 = $2043.08

        Owner A gets 4 x $78.58 = $314.32

        • Unbranded on 28/11/2015 - 14:09
          +25

          There is not exactly 52 weeks in a year (52 weeks + 1 or 2 days) , so this calculation is also flawed. The only calculation which works for every month and leap year is to use the weekly rate of $550 / 7 which gives you the daily rate of $78.57 which can then be applied as the agent has done. The agent is correct.

        • t_c on 28/11/2015 - 19:04
          +40

          @lala2011:

          Owner B would receive $78.57 x 15 = $1178.55
          Owner A would receive $78.57 x 15 = $1178.55

          Real estate agent would receive $32.90 for replying to your 20 emails.

        • tomleonhart on 28/11/2015 - 19:49
          +19

          @lala2011: The problem with your calculation is that you assume 1 month = 30 days. The agent did the right thing by calculating daily.

        • Thenarrator on 29/11/2015 - 00:46
          +2

          @lala2011: thats because "Owner A would receive: $2,390 - $1,178.55 = $1,211.45" is incorrect. A months rent is NOT 2390. It is 30*78.57142857=2357.14

        • legendary-noob on 29/11/2015 - 09:04
          +10

          @lala2011:

          There is an inconsistency in the numbers presented and your confusion is due to mixture of 2 sets of numbers that are inconsistent….. Neither $550/w x 4 nor $78.57 x 30 (assuming 30 days in month) yields $2,390.

          • you need to agree with agent whether rent is $550/w or $2,390/m. They come to different daily rates and cannot be used together.

          • if rent is indeed $2,390 for the month, then $550/w does not apply anymore. So you need to do the same daily allocation ie 4 days worth of rent owed to owner A = $2,390 / 30 x 4 and owner B $2,390 / 30 x 26.

          • remember. 1 month = 30 or 31 days. 4 weeks = 28 days. dont use the same rental figure and mix up with day count convention. the key is whether rent is $550/w at which daily rate is $550/7 or $2,390 per month at which daily rent is $2,390/30 or /31

          • btw i have never seen a rental agreement that stipulates rental per month in Australia.. its common to have rental per week.

        • catbrain on 30/11/2015 - 12:20
          +2

          @legendary-noob: All of my rental leases in Victoria have stipulated the monthly rent, not the weekly rent. However, the property has always been advertised as a weekly amount.

        • moonphase on 30/11/2015 - 12:56

          @legendary-noob: Well either $550/w or $2390/month would comes to $78.575…. which rounds to $28.58

          The calculation you need to do is $2390/month * 12 month / 365 days.

          I'm suspecting that 1 cent difference comes from few that we sum up as leap year.

          In anyhow, the agent done right calculation here.

        • drewbles on 30/11/2015 - 14:09
          +2

          @catbrain:
          Likewise. And my rent is caclulated by say $(((550/7)*365)/12) so

          $550/week = $78.57
          $78.57/day = $28,678.05 per year
          $28,678.05/12 = $2,389.84 per calendar month

          Hence, daily calculations should be using $78.57.

          Therefor, the agent is correct. Doing it this way means you get an exact amount per day, regardless of the length of the month. If it were a 'true' monthly figure, your rent would change between 28/30/31 day months. Making it a fixed monthly amount makes more sense, but when calculating it daily, it's not monthly rent / days in the month.

  • loulou1 on 28/11/2015 - 12:42

    Not sure of it matters but your calculations seems based on 30 days yet comes to $2390. Why?
    I would say four weeks @550 + 2/7 x 550 = 2357. Using this I work out owner b gets $2,042.73 which is very close to what the real estate got.
    Where did $2390 come from?

    • lala2011 on 28/11/2015 - 12:50
      -5

      Rent is collected on a monthly basis which is $550/7 x 365/12 = $2,390. This is fine when collecting rent because firstly, it is clearly stated on the lease that rent is collected monthly (so regardless of whether there is 28, 29, 30 or 31 days in a month the amount remains unchanged), and secondly, leases are typically over a period of months hence the difference in the number of days per month is averaged out. In this case, rent totally $2,390 was received from the tenant for the period from 20/11 to 19/12, and since ownership changed during this month, the $2,390 needs to be divided between the two owners, with Owner A owning the property for 4 of the 30 days while Owner B has ownership for 26 of the 30 days.

      • eatwell365 on 28/11/2015 - 19:07
        +11

        Retook at this closely.

        OP, @loulou is right on the money that the issue comes from the amount of $2390.

        have you seen the rental agreement yourself that the monthly rental amount is $2390.
        from experience and check domain.com.au, all rent is calcualted as per week in Australia.

        For practical wise, rent is commonly paid fortnightly or monthly, it is still $x per week.
        If paid by monthly, it may be easy to pay a fixed amount and paid on exact date each month. The rent per week does not change. The monthly rent amount is an "average" amount per month for the 12 months over whole year. it is more than the "exact" amount in short months and less in long month. It is an estimation for the ease of payment. It will only be accurate when calculation is converted back to exact days/weeks. The variation between "average" and "exact" amount is reflected in the accounting ledger/ the rental account.

        So assuming all you write is correct.
        Cal A should not based on $2390. $550/week is about = and not = to $2390.
        Regardless Cal A or B, new owner should get the exact amount $550/7 x how many days of the month with ownership.
        If you want to use $2390 per month, use $239012/365days of ownership, which the answer should be the same.

        Sorry to say, but the agent is correct. Old owner A looks like getting more - this is because owner A missed out on the long months based on "averaging" on the book. You will find the "exact" fact does not change ie $550 per week.

        Hope what I wrote made sense, in a rush now to a Xmas party.

        • drewbles on 30/11/2015 - 14:12

          When you take a mortgage out, they do it the same was as rent. Your monthly mortgage payment does not vary. The agent is right to calculate it the same way.

          That said, it's $30. We've all wasted more time than it's worth :)

        • eatwell365 on 30/11/2015 - 14:17

          @drewbles: it is called principle which often has a higher price than its cost.

        • drewbles on 30/11/2015 - 15:20

          @eatwell365:
          Considering the agent is right, there's not much to argue. I hate how it's calculated, but that's how it works. monthly * 12, / 365 = daily amount.

        • eatwell365 on 30/11/2015 - 17:23
          +1

          @drewbles: solved. there was misunderstanding and agent could have explained better to OP. point taken. : )

  • redforever on 28/11/2015 - 12:50
    +5

    As most rentals are advertised with a weekly rate, i think the agent's method is more appropriate.

    The monthly payment amount is determined using weekly rate/7 x 365/12 to make it easier with 12 equal monthly payments. Some months has more days than the other. If using your method, you will end up with different weekly rental rates. If you want to do it your way, you need to adjust for the whole year. (550/7) x 365 x the number of days each owners own the place and adjust it with the amount collected for the year.

    The agent's method saved everyone time. I say just go with it.

  • whooah1979 on 28/11/2015 - 12:54

    op, you do realise that the agent will calculate the same way when you sell the property in a few years time. that means that you (owner a) will receive more than the new owners (b). get $30 less now and get $30 more later.

    • lala2011 on 28/11/2015 - 12:58
      -7

      That is not true. It depends on how many days that particular month has. If the month had 31 days, then Owner A would have ended up receiving less.

      • whooah1979 on 28/11/2015 - 13:15
        +6

        if that is true then sell and settle in feb in a non leap year.

        • Hirolol on 29/11/2015 - 09:54
          +4

          That would be the true ozbargainers way.

  • oscargamer on 28/11/2015 - 12:56
    +6

    the problem lies around your calculation of a 'month'

    a month is not 4 weeks

    in contracts, a month is a calendar month

    the agent is correct

    • lala2011 on 28/11/2015 - 12:59
      -6

      I have not used 4 weeks as a month. I am using calendar month which in this case is 30 days (20/11 - 19/12).

      • oscargamer on 28/11/2015 - 13:30
        +5

        the rent is $550/wk (per 7 days), a week is a week is a week

        to get the cost for the 'month' you are talking about you HAVE TO reduce the rent to a per day amount

        then multiply that daily amount by the number of days………….

        the 2390 per 'month' is simply not that. it's the daily amount x 365 divided by 12, so that us stupid humans can pay an equal amount, 12 times a year, and we happen to call that (wrongly) a month

        you simply can't use the 2390 in any calcs.

        • lala2011 on 28/11/2015 - 18:12
          -2

          Thanks for the information. I understand that, and I know it works fine for the payment and collection of rent. However, my opinion is that the apportion of the rental revenue between Owner A and Owner B has nothing to do with the lease. It is simply a transaction between the two owners to determine how much each owner is entitled to based on the proportion of ownership during the period when the revenue was received. The same works for all the outgoings (such as rates and body corporate fees). The amount we had to pay Owner A upon settlement for our portion of these outgoings were all based on the number of days we own the property divided by the number of days each outgoing item was paid for. Why should outgoing be treated this way and not revenue?

  • Steptoe on 28/11/2015 - 15:13
    +1

    Is the rent on the lease per week or per month

    • lala2011 on 28/11/2015 - 18:14

      Both are stated on the lease, but rent is collected monthly. So for the period from 20/11 to 19/12, which is a period of 30 days, $2,390 was collected.

      • Steptoe on 28/11/2015 - 18:51
        +2

        Should be only be one figure on the lease.

        If it was February, would you argue they over paid you, when only $2200 should be collected?

  • eatwell365 on 28/11/2015 - 17:39

    Is the agent managing the property for the existing owner? Have you indicated you will move in and live yourself.
    If not, there is good chance that you will ask this agent to continue on the property management, the agent may have a sudden change of attitude. You know what to do next.

    • lala2011 on 28/11/2015 - 18:16

      We are using the same agent that was managing the property for the existing owner, and unfortunately he knows that we will be moving into the property in a few months' time, so… Thanks for the advice, though :)

  • oscargamer on 28/11/2015 - 18:16
    +16

    you need to let this go…….for your sanity and ours :)

    • lala2011 on 28/11/2015 - 18:49
      -3

      I know… As I said it's not the $30 we care about. After paying rent for a few years we were pretty excited to be on the other side for once. I guess the way my brain works I just couldn't let this go although i wish I could…

  • chill on 28/11/2015 - 18:47
    +24

    Are you kidding OP?

    • [Deactivated] on 29/11/2015 - 20:49

      Things like this makes me happy with my rental position.
      $250/wk - pay my roommate. Done.
      He deals with any sort of calculations like this.

      • Antikythera on 29/11/2015 - 23:00
        +2

        yeah i have a mate like that. collects $250 x 2 from his flatmates and pays the agent $600. he figures a $100 a week worth all the 'sums'?

        • [Deactivated] on 30/11/2015 - 05:31

          Do we live together? haha.

        • [Deactivated] on 30/11/2015 - 07:44

          Oh and he also entertains us when we are bored and does these duties (along with my other male roommate)

          http://tapastic.com/episode/201651

  • haertz on 28/11/2015 - 18:51
    -4

    The agent calculated daily rent at 78.57
    Owner A should get 78.57*4 = 314.28 using the agents method…

    The agents calculations are wrong, 78.57 is the daily rent for the week but (2,390/30) 79.67 is the daily rent for the month.
    You cant just use the daily rate per week at monthly proportions.

    • oscargamer on 28/11/2015 - 19:35
      +4

      have you read ANY of the posts above?

  • lilkid28 on 28/11/2015 - 19:00
    +2

    Get your solicitor to do the calculations.

    • ATangk on 28/11/2015 - 20:02
      +3

      Over $30… id just say take an early Xmas present and lay off my back. Its not worth raising the stress for $30…

  • Dumax on 28/11/2015 - 20:36
    +5

    Agent is correct.

    • rambao9 on 28/11/2015 - 21:23
      -4

      Ok agents not correct. Rents not $550p/wk if 2390 is collected in the month. Which is why theres a problem here. Tenants paid extra and it should be credited to them, not the owner/s. ☺

      But for $30 its not worth it.

      So you owned the property for 26 of 28 days @ 550p/wk, 26/28 * 2200 = 204x, i belive you still got the correct amount. Just owner A gets bonus cuz tenant paid extra.

  • jzx100 on 28/11/2015 - 21:09

    Chat shit, get banged!

  • bigticket on 28/11/2015 - 21:51

    If agent is collecting rent on a monthly basis, which it appears so since they have used the monthly rental figure in their response to the OP, then I agree with the OP, the agents calculations are blatantly incorrect.

    The amount $2390 has been collected for the month and should be apportioned mathematically by the ratios 4/30 and 26/30 as stated by the OP.

  • TtiGeR on 28/11/2015 - 22:01
    +4

    While the rent is paid monthly, for a fixed term lease, the monthly rental collection is purely for convenience (or tenants would have to pay a different amount each month). It only ensures that over a year (or the term of the lease), the tenants pay the correct total amount of rent.

    Because each month has different number of days, a monthly rental payment can never accurately cover a calendar month.

    Put it this way, the daily rental charge should not change during the fixed term regardless a month is shorter or longer.

    The calculation should be based on the entire lease agreement - not just one month. Therefore, the daily calculation method is not wrong.

    I have seen realestate agents charging fixed amount "monthly" (common practice) but paying owners based on the number of days. - This ensures that the owner gets paid correctly.

    In regards to the discrepancy you mentioned, it's purely because each "monthly" rent payment covers 30.43 days of rent. The "extra" (or 'shortfall') money should remain as a balance in the account to 'adjust' the remaining months of the term.

    This is, however, different if the term is month by month (rather than a fixed term).

    For example, if the rent is $700 a week, the daily rent is $100. In a non-leap year, the annual rent should be $36,500. (Although quite often the owner is happy to charge the same amount in a leap year.)

    Each month, the tenant pays $3,041.67 ($36,500/12). Ignoring the agent's charges, each calendar month, the owner should be paid $100 for each day in that calendar month. For the first and the last month, it should be based on the days within the rental agreement.

  • stingy-oz on 28/11/2015 - 22:19
    +3

    OP your calculations are purely based on the fact that a month is 30 days and hence there's a rounding error. When an agent rent out a property, it is rented on a rate/week basis - in this case $550. The only most accurate calculation for daily rate is $550/7 and multiply by whatever number of days needed to be split.

    The 'monthly' rent is really for the convenience of owner/tenant in a 12 month lease, or else the leasee will have to friggin calculate monthly and pay a different rate. That being said, they will end up paying the same amount in the end - hence the monthly rate. In fact the monthly rate is actually calculated in one of the two formula below

    Formula A (most often used) : (weekly rate * 52 weeks)/ 12

    Formula B (mostly used for estimation only): Weekly rate * 4.3

    So, OP. Your calculation is flawed

  • Natt on 28/11/2015 - 22:45
    +3

    Neither is correct. If rent is 550 pw (7days)

    then the person with 26 days gets 26 x (550/7) = $2042.85 (rounded down)
    and 4 days is 4 x (550/7) = 314.28

    total rent paid over the 30 days is 30 x (550/7) = $2357.13

    OP you got paid about right. Unless the rent is per month. Move on

  • kvince on 28/11/2015 - 22:54
    +6

    Both methods are wrong but the agent's calculation is closer to the correct answer.

    The confusion is from the $2390 which is the entire year's rent averaged over 12 months. Redforever above is correct in his statement:

    "The monthly payment amount is determined using weekly rate/7 x 365/12 to make it easier with 12 equal monthly payments. Some months has more days than the other. If using your method, you will end up with different weekly rental rates. If you want to do it your way, you need to adjust for the whole year. (550/7) x 365 x the number of days each owners own the place and adjust it with the amount collected for the year."

    a.) Owner A has owned the property for the rental calendar year from 20/12/14 to 23/11/15 = 339 days. Therefore he is entitled to 550/7x339 = $26635.71
    b.) You are entitled to 26 days = $2042.86
    c.) Owner A thus far has collected 11x2390 = $26290
    d.) Owner A's share for the last month's rent = 26635.71-26290 = $345.71
    e.) Your share for the months rent = 2390-345.71 = $2044.29
    f.) There is an excess of $1.43 (from 2044.29-2042.86) because 550/7x365 = $28678.57 and 12x2390=$28680.
    g.) Give the renter his $1.43 back

    This whole thread reminds me of this:
    http://www.deathandtaxesmag.com/233107/two-body-builders-arg…

    • 2Poor4Ozb on 29/11/2015 - 04:08
      +2

      hahah those bodybuilder
      what a crack up story, made my night

  • Natt on 28/11/2015 - 22:56

    oh and Lala it sounds like you have fixated on this because of all the associated stress of buying a house! Honestly it's not important enough.

  • gstfree on 28/11/2015 - 23:02

    Payroll person here. Agent's calculation is reasonable.

    However, you are reasonable to propose the following:

    Daily rental rate = $550/7 = $78.57O
    Old owner A receives: 4 x $78.57

    New owner B receives Owner A receives: $2,390 - 4 x $78.57

    If the agent applies their calculation method consistently for all similar situations, then don't argue. Agent's calculation is not wrong.

  • vavs on 28/11/2015 - 23:44

    Rather than starting with owner B's share, Use the agents method to calculate what owner A should get: 78.57 x 4 = 314.28, then calculate owner B's share: 2390-314.28 = 2075.72. You come out on top.

    The confusion is because of mixed methods of calculating - it'll be fair if one uses exclusively either the daily rent or just part of month.

    Another way of looking at it:
    2390 ÷ 78.57 = 30.42 rental days to the month.
    78.57 x 0.42 = 33 AUD is the rent for that extra 0.42 day.
    That amount - 33 AUD - seems to be the bone of contention.

  • lala2011 on 29/11/2015 - 01:03
    +2

    Thanks everyone for your input and contribution, they are all very much appreciated. As some of you have suggested, it's time to let this go and move on. Cheers :)

  • Geewhizz on 29/11/2015 - 06:52
    +3

    Rent is collected on a weekly basis. Owner A owned the property for 4 days out of a week, so was paid accordingly.

    The fact that the agent forwards rent collected to the owner monthly is totally irrelevant in the calculation.

    The agent is correct, and probably starting to become incredibly frustrated at you wasting so much of their time.

  • SlickMick on 29/11/2015 - 09:59

    it sounds like tenants aren't paying exactly the weekly rate. Since you're only landlord for a month, I suggest it isn't worth the effort you've already put in.

    Makes me feel better though. I spoke to an accountant at Bank SA when I got my first home loan because their interest calculation didn't look right, and the salesperson did not want to go through a conversation like this.

  • Sweden on 29/11/2015 - 10:22
    +1

    Geez! It's $30!

    • eatwell365 on 29/11/2015 - 10:47

      $30 goes a long way…for $35 I just got a blue tooth Samsung headset, 2 x pack of 4 aaa rechargeable Duracell batteries and 6x Ampi Pur 5-in-1 toilet case DELIVERED from COTD.

      Yes $30. Does not worth the headache,

      But some after thoughts:
      Think we have been very lucky generations post WW and have many years of peace. Remember mum used to bargain few cent so already discounted vegetables in market cause life was tough.
      I always try to be mindful and teach my child to be grateful to have - even a grain of rice .

  • uaapd on 29/11/2015 - 12:16
    +1

    The lease states the rent is payable weekly, then the rent is apportioned on a daily basis. The monthly settlement period that the rental agent accounts for the rent is irrelevant.

  • [Deactivated] on 29/11/2015 - 13:17
    +1

    It is common practice for rentals to be advertised "per week" but are actually charged "per month" of a very similar amount.

    It is common practice for calculations to be done on a daily basis either using daily=week/7 (lease agreement written as weekly) or daily=(month*12)/365 (lease agreement written as monthly), as some months have more days than others and leap years and so on.

    In the grand scheme of buying properly in particular, $30 is not worth a fight. You will find MANY MANY more expenses in home-ownership that exceed $30, that this is small change.

    Personally I would not have picked that battle with the agent, and if I was looking to continue using that agent I would have given them a fairer shot to manage the property and picked a battle of more substantial value if it came down to it.

    Now that you have already engaged in this battle, it may be too late, the Agent already thinks less of you and will probably already want to avoid dealing with you as not to cause the next battle with you.

    For that reason alone, not because the agent is wrong, but because you would have pissed them off with 20 useless correspondences, I would go with a new managing agent anyway and start your relationship with a managing agent fresh, and let the old agent keep their $30.

    You could also do it yourself without a managing agent but I would suggest against that because from your attitude it sounds like you would give tenants a hard time and you need an agent to act as a buffer of what's legal and what's not between you and the tenant, as well as upsetting your tenants for no reason even if what you do is not actually illegal per se and then you would have pissed off a family for no reason and be looking for new tenants.

  • JimmyF on 29/11/2015 - 15:04
    +2

    Man…. all this over $28.51 worth of rent!? Its a $500k+ purchase (based on the rent etc). So really just let it go and be done with it!

    All you're doing is getting the agent offside, who is the one managing you're rental until you move in!!

  • swilso on 29/11/2015 - 15:11
    +2

    $30 difference and to put off your relationship with the realestate agent, probably not worth it. If I had the money to afford a property that rents at $550w I'd be keeping the agent on side and starting with a positive relationship surely that would be worth $30 in the grand scheme of things.

  • adn on 29/11/2015 - 15:54
    +1

    Didn't your conveyancer do the rent split too?

    However I agree with the agent calculations. Most fair to be a day rate and multiple out to compensate for the different days in a month.

    In all honesty, when your agent has to call you to unclogged the toilet twice in a year and you get hit with those bills. You won't care about 30 bucks no more.

  • tomzzzzz on 29/11/2015 - 16:52
    -2

    I would say none of the methods is correct.

    That's because both of you believe that rent = $550/wk = $2,390/month.
    That's incorrect.It is not the actual money tenant paid in Sep.
    In Sep, there are 30/7 = 4.2857 weeks.
    For each week, tenant pay $550, therefore Sep rent = 4.2857550=2357.14 dollar.
    Owner A therefore should receive: (4/30    $2357.14)=314.28
    Owner B therefore should receive: (26/30*$2357.14)=2042.85
    Same mistake happened in Agent's calculation.

    $2390 is the AVERAGE monthly payment, which does not equals to the ACTUAL payment occurred every month.

  • oscargamer on 29/11/2015 - 17:14

    maybe time to crowdfund the missing money ? ;)

  • BestofOZB on 29/11/2015 - 17:32
    +2

    Rent = $550/wk = $2,390/month

    There is where you are wrong.
    Sep has 30 days, rent is $2357.

    Agent is correct.

    • duchy on 29/11/2015 - 18:43
      +1

      This is perfect explanation. The agent is right mate.

  • ronnknee on 29/11/2015 - 19:40
    +1

    The agent's rate is correct.

  • abh_gup on 29/11/2015 - 20:35
    +4

    OP, for sure, I would not want to do business with you. Lol.

    • jlogic on 29/11/2015 - 22:43

      Heh I would of given up explaining on the tenth email and on the eleventh email would emailed back and said find another property manager. If something starts up like this I steer far away. Always ends in tears.

  • samdong on 29/11/2015 - 21:02
    +3

    Op, what time of the day settlment completed.I dont know about VIC..but in NSW the new owner is entitled for half day rent if settlment done before 11:59….LOL

  • jlogic on 29/11/2015 - 22:41

    Sheesh… I pay every four weeks my weekly rental amount nothing about monthly figure. That monthly amount seeks to confuse, if both are stated then how often is rent paid? I pay every 28 days or 4 weeks.

    The daily rate should be the amount that is accurate.

    How did you arrive at the monthly figure?

  • Drifta on 29/11/2015 - 22:59

    why dont you just give the tenant 2 months notice (allowed even if on contract fora yr) and then move in yourself 10 months earlier. Will get a bigger saving then $30 from no longer having to pay the agents fees

  • lostn on 29/11/2015 - 23:15

    That's quite expensive rent. How many rooms are in this apartment and is it furnished?

  • lala2011 on 30/11/2015 - 00:17

    After re-reading my original post, I think I did not do a very good job stating all the facts, which created quite a bit of confusion for everyone… sorry…!! Just a couple of clarifications:

    • The following is quoted on the rental contract "$2390.00 PCM ($550.00PW) Rental Payment Payable in advance on the 20th of every month".
    • I DID NOT calculate the $2,390 myself. This is the actual monthly amount collected from the tenant as stated on the lease.
    • For the current month, rent of $2,390 was collected from the tenant on 20/11. This covers the period from 20/11 to 19/12 (30 days).
    • Since the property settled on 23/11, ownership of the property was split between Owner A (4 days) and Owner B (26 days).
    • The agent calculated the amount for Owner B first: daily rate ($78.57) * 26 days = $2,042.82.
    • The agent then distributed the remaining to Owner A: $2,390 - $2,042.82 = $347.18.
    • The amount distributed to Owner A ($347.18) actually equates to 4.4 days based on the daily rate, despite the fact that Owner A only owned the property for 4 days.

    Once again sorry that my original post wasn't clear. As stated above I have decided to move on, but once again a big THANK YOU to everyone for their input and advice.

    • [Deactivated] on 30/11/2015 - 07:54
      +5

      I understand clear, but you are still wrong and the agent is still right. Just let it go.

    • tomleonhart on 30/11/2015 - 09:26
      +2

      Well.

      You want the real daily rate should be $2390 /30. The way that they come up with $2390 per month is by taking
      ((550 x 52) + (550/7))/12 = $2389.88. Now the $2390 figure is just an average of all the months with or without 31th day.

      You're wrong because $2390 * 12 / 365 = $78.57 still using the monthly figure.

      The reason why owner A get 0.4 days extra is because he got paid $2390 on months with 31 days prior to the property gets transferred to your name.

      Hope it makes sense.

  • Thespottedcow on 30/11/2015 - 07:27
    +3

    Looking at your profile I notice you are from Victoria. Each state will have a different way of calculating rental.

    Here is the rental calculation from VCAT

    The method for calculation of rent adopted by VCAT is as follows:

    To determine the daily rate where the rent is paid:·

    Weekly: divide by 7 (eg $180pw ÷ 7 = $25.71);

    Fortnightly: divide by 14 (eg $320pfn ÷ 14 = $22.86);

    Monthly: multiply by 12 and divide by 365 (eg $800pcm x 12 ¸ 365 = $26.30);

    Where the daily rate or total sum of rent owing is calculated beyond 2 decimal points, it is to be rounded off to 2 decimal points (i.e. $$.cc) as follows:

    Where the third figure after the decimal point is:

    from 0-4, the figure is to be rounded down;
    from 5-9, the figure is to be rounded up.

    An example of how the above is implemented is as follows:

    $180 (weekly rent) 7 = $25.714285 and is rounded down to $25.71.

    Therefore in the above situation

    $2390 x 12 / 365 = $78.57/Day
    Owner A gets 4 days = $314.28
    Owner B gets remaining rent

  • misu p on 30/11/2015 - 08:21
    +1

    Sorry cannot waste time for 30$…

  • alz on 30/11/2015 - 08:45
    +2

    LOL @ Original OP getting negged to oblivion.

    EDIT: It's $50 man don't waste time on it.

  • AlisonP on 30/11/2015 - 09:22
    +4

    Around 20 man hours spent helping the OP claim ~$35 could have been spent volunteering at a worthy charity helping those who truly need the assistance.

    • gimme on 30/11/2015 - 09:36
      +3

      This is exactly what's wrong with this world. So many worthy causes yet OP and vast number of people wasting time on this sh***T. I would have (may be) had an ounce of sympathy had the OP educated themselves about the common standard of daily calculation before crapping on for half a page + 20 emails.

  • juzz on 30/11/2015 - 10:20
    +4

    This is one of the most ridiculous and petty posts I have ever seen on OzBargain. Feel sorry for OP's agent and tenant.

  • bitcoinorbust on 30/11/2015 - 11:00
    +2

    props for being a true Ozbargain tightass

  • FittyFitty on 30/11/2015 - 11:14
    +1

    FFS; not worth the ~$30 mate…

  • djprima on 30/11/2015 - 11:34

    Amazed that so many people attacking OP. Set aside the $30, I see it as a fight to be able to calculate (and convince) the fair amount of money

    weekly rate $550 -> daily rate $78.57 (rounded down)
    Amount entitled to each owner is $78.57*number of days

    (1) Calculate the days from start of lease year to 23 Nov = X
    (2) Owner A entitled to (X*$78.57) minus off monthly rents already paid throughout the year
    (3) Owner B takes the rest of $2390-(2) for the month of Nov
    (4) The tenant overpaid $1.43 after the lease year completed (due to the monthly rate rounding up), take it off from owner B entitlement in the last month

    all happy

  • a2swin on 30/11/2015 - 11:52
    +2

    considering 23 Nov is my birthday I feel offended by the OP for being a conservationist. I been renting for 5 years and I can see the agent's method is right. Plus it should not be a problem when you have money to buy a property in Southbank, perhaps thinking of the new sofa ..

  • 0031nek on 30/11/2015 - 13:55

    i don't really mind to pay $30 more if i am OwnerB, nor do i mind paying $30 more if i am OwnerA, neither will cause me wasted 30mins reading all these, let alone typing it and corespondings, i may lose here, i might gain somewhere else, well maybe that's me, my time worth more than that $30, and yes, i used to rent and also owning. i'm a true OzBargainer, better get back to hunting..

  • slugsandsnails on 30/11/2015 - 14:02
    -2

    It's funny that people go nuts over a $2 discount on here but when it comes to a bigger purchase suddenly a potential $30+ 'saving' is not worth bothering about!

    • plasmoske on 30/11/2015 - 15:49
      +1

      We're telling OP it's not worth bothering about because OP is wrong.

  • El Cap on 30/11/2015 - 14:08

    The problem is in the rental agreement since there are two ways to calculate the monthly rental.

    What you should do is,
    a) Ask the agent how much was received for this particular rental period. Say this amount is X.

    b) Then, B gets (26X)/30 and A gets (4X)/30

    • El Cap on 30/11/2015 - 14:10

      PS. Both OP and his agent are wrong.

    • ozhunter on 30/11/2015 - 14:11
      +2

      It's $2390 pcm, your calculations means you agree with the OP.

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