Conundrum: PM collects fortnightly but pays landlord monthly.

Spot on. Two of the most common mistakes are thinking that there are four weeks in a month and multiplying the weekly rent by 4 (except for February where this is accurate except for leap years) and thinking there are exactly 52 weeks in a year.

Make sure your PM takes into account the 366th day in a leap year too! I would imagine that this year, quite a few landlords were dudded a day's worth of rent by PMs who calculated their monthly rental amount across the leap year incorrectly...

All rental amounts are worked back to a daily calculation in a variety of situations so it makes sense that all workings are done in the same way. As @fullylucky said, it's a general financial maths principle.

- Andrew

 

It's truly incredible how some owners and tenants still think there are 4 weeks in a month.

 

Just to sort you lot out - bi-monthly means every 2 months. Bi-weekly is every 2 weeks.

 

Can mean either twice a month or every two months.

Re: bi-weekly... I dunno. nobody ever uses that. Twice weekly or fortnightly is clear.

 

Afaik rents are dictated by the terms and definitions in the lease ie weekly, fortnightly or monthly (calculated from the annual rent).

Daily rent is only applied for adjustments eg. for termination calculations applied by tribunal or holdover/makegood.

Rent is applied from the due date so it doesn't matter whether there are 28 or 31 days in a month the due date or anniversary of the commencement day so it doesn't matter if there's a leap year or long month, rent is still due each Tuesday or alternative Tuesday. The calculation is not done manually as it's done by the pm software and no the pm isn't ripping anyone off unless they aren't chasing the full rental amount.

 

PMs pay monthly, or some do pay mid month as well.

They are not paying you 4 weeks or 2 weeks, and also there is nothing stopping tenants being way in front, so in a month you could get paid for 9 weeks, or 7 or if your tenant is hopeless, 1 or none !

The statement shows what money there is and for what period......simples

 

I can see your line of thinking but it's not quite correct. The calculation is done by the day and the amount you see on the lease is simply to make it easy for presentation and disbursement. This is because a lease can have any arbitrary start and end dates - they don't necessarily have to match a week, month or year and therefore by definition must be a daily apportionment e.g. You could have a lease commencing on the 7th June and ending on the 23rd of November.

At the end of the lease the adjustment is done using a daily figure every time if required for various reasons and in Queensland, this is actually written into legislation (see Section 97 (1) of the Residential Tenancies and Rooming Accommodation Act 2008 here). Victoria also has similar guidelines and that document in particular does a great of job rent calculation explanation.

Regarding the leap year, my point was that if the amount is listed as a monthly payment on the lease, the PM should be applying the correct monthly calculation (using a daily rate) to ensure the monthly amount is correct for that given year i.e. (weekly rent divided by 7) x 365 or 366 then divided by 12. It is very common to (incorrectly) simply multiply the weekly amount by 52 and divide by 12. If this is done, the PM is dudding the investor for not only the extra small portion beyond the 52 weeks, but in a leap year they will miss out on that and an extra day. Taking the leap year into account is very important if the amount is a monthly stipulation. Yes, the software works out the adjusted amounts, but often the PM will manually calculate the monthly amount to be written onto the lease if this is at the request of the landlord.

There is no adjustment made for a specific month i.e whether there is 28, 29, 30 or 31 days as it is averaged out as a monthly amount on the term of the lease if based on a monthly calculation.

- Andrew