Rent arrears interest calculation?

Yella Fella said:
1) Is the calculation per day or per year
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It doesn't say, therefore it's a matter of interpretation. In general, the courts have held the interpretation of contract terms where it is ambiguous should be in favour of the party that did not draft the contract. I would expect therefore that the courts would hold that there is no compounding of interest.
 
Mr Jack said:
It doesn't say, therefore it's a matter of interpretation. In general, the courts have held the interpretation of contract terms where it is ambiguous should be in favour of the party that did not draft the contract. I would expect therefore that the courts would hold that there is no compounding of interest.
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If it doesn't say then you would have to interpret it as the AER. A daily interest rate of 8.25% would be ridiculous, after 1 year £1000 would turn into £3,682,861,054,462,644.

The formula for the daily compounding interest rate would be: (1+0.0825)^(1/365)-1 = 0.00021721 (rounded down).
To calculate the total amount after for example 30 days you'd do 1000 x 1.00021721 ^ 30.
 
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I am lucky enough to own two properties besides my home - I have always followed the principal of using a letting agency and accepting the charge for guaranteed rent - slightly less income but no headaches!

In answer to the original query the reason its normally base rate + 3% is not to catch the people who fall a month behind but to deal with people who have squatted a year in your property without paying at all.
 
Spunkynuts said:
I am lucky enough to own two properties besides my home - I have always followed the principal of using a letting agency and accepting the charge for guaranteed rent - slightly less income but no headaches!

In answer to the original query the reason its normally base rate + 3% is not to catch the people who fall a month behind but to deal with people who have squatted a year in your property without paying at all.
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Bold move saying this on these forums. Bold move indeed.
 
A2Z said:
Because **** like you are one of the reasons that the housing situation in so messed up in this country. Homes should be for living in, not investments just to make money.
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Is there something wrong with making money - that’s how the government gains tax revenue to support those that struggle or experience hardship.
 
Mr Jack said:
The value of Landlords isn't zero - there is maintenance, etc. - but the rewards are out of whack with the value added. Thatcher really shafted the country when she trashed the national council housing stock.
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I would agree that Thatcher's decision to sell of the housing stock was not well thought out long term - but how council housing is run, managed and monitored is atrocious.
 
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