Last month's rent
A separate deposit that specifically covers the final month of the lease. Different from a security deposit under most state laws. Not required everywhere.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
Last month's rent is a separate prepayment, and when a rental is sold it transfers to the buyer like the security deposit. Landlords who forget it at closing owe it later.
Part 2 of 4
A simple example
Your tenant paid first and last month at move-in. At closing, the last month's rent is credited to the buyer, who will apply it when the lease ends.
| The money | At the sale of the rental |
|---|---|
| Security deposit | Credited to the buyer at closing |
| Last month's rent | Credited to the buyer at closing |
| This month's rent, already collected | Prorated to the buyer for the days after closing |
Every dollar the tenant paid ahead belongs with the property, not with the seller.
Part 3 of 4
What people get wrong
That last month's rent and the deposit are the same thing. Many states treat them differently, and both have to transfer.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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