passing rent?

lightspeed

Hi all

Can anyone advise on what the difference is between contract rent and passing rent?

I've seen it listed on a few lease properties for sale and cant understand it?

Foe example, the below is property:

https://bidx1.com/en-ie/auction/property/24959?page=3&pageSize=50&AuctionIds=307%2c306%2c299%2c298&_pauction=True&_v=1


"Total current rent reserved €72,085 per annum*.

However, further down it says:

"We have been advised by the Vendor that the current rent passing for Unit 6A is €13,167.96 p.a. Therefore total current rent passing is €59,095.96 p.a."


Why would a tenant be paying significantly below the contract rent? Im assuming rent reserved means contract rent but open to correction.

Robbo

lightspeed wrote: »

Hi all

Can anyone advise on what the difference is between contract rent and passing rent?

I've seen it listed on a few lease properties for sale and cant understand it?

Foe example, the below is property:

https://bidx1.com/en-ie/auction/property/24959?page=3&pageSize=50&AuctionIds=307%2c306%2c299%2c298&_pauction=True&_v=1


"Total current rent reserved €72,085 per annum*.

However, further down it says:

"We have been advised by the Vendor that the current rent passing for Unit 6A is €13,167.96 p.a. Therefore total current rent passing is €59,095.96 p.a."


Why would a tenant be paying significantly below the contract rent? Im assuming rent reserved means contract rent but open to correction.

Passing rent is what is actually being paid. As to why there's a tenant paying less than the reserved amount, that's a decision taken by the outgoing landlord or whoever might be standing in their shoes (e.g. a receiver).

The reasons for this are often boringly rational, unlike the hysterics that often go on with residential lettings. Tenant isn't trading so well so asks for a reduction. Landlord weighs up cost of the reduction versus the costs of bringing the tenancy to an end and re-letting it. Decides a temporary rent reduction is easier.