Module 2 · Chapter 3

Rent, Rent-Free and VAT

Rent is the price of a lease. This chapter shows how the tenant pays it, when it starts, what tax is added, and what protects the landlord if the tenant pays late.

≈ 11 min read 8-question test

In this chapter

  • How the rent is paid, and what the tenant gave for monthly rent
  • How a rent-free period works, and why VAT is added
  • What happens when rent is late, and how a rent deposit works

3.1Rent in one paragraph

Linnet will pay £60,000 a year for the first floor. The lease calls this sum the Annual Rent, and this chapter calls it “the rent”. Linnet also pays a share of the cost of insuring the building, the insurance rent, and a share of its running costs, the service charge (Chapter 5). The lease calls the three payments, with any VAT and late-payment interest on them, the Rents.

Key point

All three Rents are paid as rent, and the lease treats them alike. A late service charge payment carries interest, can be taken from the deposit and can end the lease, just like late rent.

Also in this chapter

  1. Monthly rent, and what Linnet gave for it
  2. How the rent-free period works
  3. Why VAT is added to the rent
  4. Paying late: interest, and no deductions
  5. The rent deposit: the tenant's money, held as security
  6. Your job

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