A Pro Rata Payment is a rent payment that has been automatically adjusted as a result of a change in rent that was not taken into account when the previous rent payment was made. This typically occurs when the rent payment dates and the scheduled Rent Review dates don't align. This leads to the tenant owing (or being owed) additional Rent for the time between the rent changing and the next Rent payment date.
Rest assured, this is an automatic process in the system as every time you make a payment, Nomos One will ensure your rent payments are up to date.
Nomos One assigns a rent amount to each day, so the Pro Rata payment is calculated by dividing the rent for the payment period by the number of days in the payment period, then multiplying that number by the number of days that are owed in the Pro Rata Payment, and finally subtracting the amount of rent already paid.
Please note that in reports the Pro Rata Payment and rent payment aren't shown as separate line items, rather they are shown as the total amount paid.
Example situation:
If you regularly pay rent in advance on the 1st day of each month, but have a Scheduled Rent Review on the 10th day of a certain month, the system will record an automatic Pro Rata Payment for you. The next regular rent payment following that Rent Review will include the new rent amount, as well as the amount owed for the past 20 days.
Here's the situation on a calendar:
The situation step by step:
Nomos One assigns a rent amount to each day, so when on the first of the month, you paid $2700 in rent for the month, that means each day represents $90 in rent.
On the 10th day of the month, the rent increased to $3000 a month. That means each day now represents $100 in rent.
The change in rent is effective for the next 20 days of the month, so by the end of the month, you are technically behind on rent.
On the first of the following month your rent would be $3000, due to the Rent Review. On top of that, your payment would include an additional $200, coming to a total of $3200.
This is because of those 20 days wherein you were not paying the newly effective amount of rent; you were paying the old amount of rent. On each of those 20 days, each day was meant to represent $100 in rent, but due to the rent review coming after those 20 days were already paid for, each day only represented $90 in paid rent.
If we take that $10 difference and multiply it by the 20 days it applies to, we get a $200 Pro Rata payment.
Frequently Asked Questions:
Q. How can I prevent a Pro Rata adjustment from appearing when onboarding the agreement?
A. To prevent a Pro Rata adjustment, you need to ensure that your Rent Reviews align with Payment dates.
Q. Is it feasible to alter the payment period or the Rent Review date to synchronize the payment?
A. Unfortunately, no. Attempting this will cause issues in your organisation. If this is something you need, please reach out to Support.
Q. Can I modify the rent payment to match the landlord’s invoice?
A. Unfortunately, no, you cannot. If you do need the payments to match, please refer to the previous question and reach out to Support if need be.
Q. Is it possible to separate the Pro Rata payment adjustment from the rent payment?
A. Unfortunately, no, this is not possible.
Q. I think I can see a pro rata payment at the beginning of my Agreement - why is this?
A. There may also be a pro rata amount if there is time between the commencement date and the first rent payment, in order to include the amount for this period.
For example, if a lease commenced on the 1st of January, but rent payment goes out in advance on the 15th of every month, then the first rent payment on the 15th of January would include the rent for 15 January - 15 February, as well as pro rata amount for 1 - 15 January.
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