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When you lease an apartment or a car, the monthly rate stated is usually the actual month-to-month cost. They don't demand a full year in advance to get the sta

When you lease an apartment or a car, the monthly rate stated is usually the actual month-to-month cost. They don't demand a full year in advance to get the stated cost, or increase the monthly cost because you didn't pay for a year upfront. That's why this pricing feels dishonest, even if it's technically true. Other companies handle it much more fairly. If you want to subscribe to World of Warcraft, Blizzard makes it clear that it's $15 per month. With discounts offered if you pay for 6 months at a time. That type of pricing feels honest, with a reward for paying for multiple months. Makes the customer feel better than Adobe's presentation, even though it's essentially the same type of pricing scheme as Adobe.

RC_ITR 6y ago
Ummm, leases definitely have variable terms depending on length and also have fees for exiting the contract early. And even more so, I bet if you asked, they would give you a further discount for upfront payment (since it removes non-payment and early cancellation risk that’s priced in) I guess I’m just unclear what you’re on about?
- DavidPeiffer 6y ago
  >And even more so, I bet if you asked, they would give you a further discount for upfront payment (since it removes non-payment and early cancellation risk that’s priced in) Not a lawyer, but come from a family of bankruptcy lawyers. If your landlord went bankrupt after you pre-paid, it could get dicey. It's a risk, and probably a low probability of downside, but I encourage people to do more research if interested.
d110af5ccf 6y ago
> They don't demand a full year in advance to get the stated cost, or increase the monthly cost because you didn't pay for a year upfront. In my experience, typical apartment leases are offered on a 12 month basis. Month to month is usually substantially more expensive. If you break a 12 month lease early, you're legally on the hook for whatever the contract specifies (typically the entire year in my experience). Most landlords will "generously" agree to let you out of the lease for the equivalent of a couple monthly installments though (again, just my personal experience).
- morsch 6y ago
  Wow, I'm glad this isn't how it works where I live.
- brailsafe 6y ago
  I've personally never heard of a case where you'd pay out the year's lease. Usually you just forfeit a portion of your deposit, which half a month's rent or so, in Canada at least.
  - d110af5ccf 6y ago
    I think that's the typical outcome in the end. I've never actually heard of anyone being charged the full amount (not that I would have any way of knowing though). Also sometimes local law will place an upper limit on the size of the fee. Several of my past leases specified that if broken I would be responsible for monthly rent on a prorated basis until a new tenant moved in.
    - brailsafe 6y ago
      In my current province, it's regulated that after the first year's lease is up, it defaults on an ongoing basis to a month-to-month agreement, whereby only a month's notice is required and that's it, unless you explicitly agree to another term lease. That's what I'm on now. Our deposit is the regulated max of half a month's rent.
  - kingaillas 6y ago
    I had that once, in an apartment I rented in the US (TX). If you broke the lease early, you were on the hook for the remainder of the lease, UNTIL the apartment was rented again. This was called "rent acceleration" as I remember it. This was also ~25 years ago so maybe it is different now, but it definitely existed and I was subject to it. At the time I bought a house so I broke the lease to move in. Fortunately, the apartment rented within the month so I didn't owe additional fees. Out of curiosity I googled "rent acceleration" and see it is a hot topic now - mostly with commercial real estate and businesses break their leases due to the impact of covid on them. See https://www.jdsupra.com/legalnews/what-landlords-need-to-know-about-6380579/ https://www.jdsupra.com/legalnews/what-landlords-need-to-kno... for a summary. Also interesting is some US states make residential leases exempt from rent acceleration.

RC_ITR 6y ago

Ummm, leases definitely have variable terms depending on length and also have fees for exiting the contract early. And even more so, I bet if you asked, they would give you a further discount for upfront payment (since it removes non-payment and early cancellation risk that’s priced in) I guess I’m just unclear what you’re on about?

DavidPeiffer 6y ago
>And even more so, I bet if you asked, they would give you a further discount for upfront payment (since it removes non-payment and early cancellation risk that’s priced in) Not a lawyer, but come from a family of bankruptcy lawyers. If your landlord went bankrupt after you pre-paid, it could get dicey. It's a risk, and probably a low probability of downside, but I encourage people to do more research if interested.

d110af5ccf 6y ago

> They don't demand a full year in advance to get the stated cost, or increase the monthly cost because you didn't pay for a year upfront. In my experience, typical apartment leases are offered on a 12 month basis. Month to month is usually substantially more expensive. If you break a 12 month lease early, you're legally on the hook for whatever the contract specifies (typically the entire year in my experience). Most landlords will "generously" agree to let you out of the lease for the equivalent of a couple monthly installments though (again, just my personal experience).

morsch 6y ago
Wow, I'm glad this isn't how it works where I live.
brailsafe 6y ago
I've personally never heard of a case where you'd pay out the year's lease. Usually you just forfeit a portion of your deposit, which half a month's rent or so, in Canada at least.
- d110af5ccf 6y ago
  I think that's the typical outcome in the end. I've never actually heard of anyone being charged the full amount (not that I would have any way of knowing though). Also sometimes local law will place an upper limit on the size of the fee. Several of my past leases specified that if broken I would be responsible for monthly rent on a prorated basis until a new tenant moved in.
  - brailsafe 6y ago
    In my current province, it's regulated that after the first year's lease is up, it defaults on an ongoing basis to a month-to-month agreement, whereby only a month's notice is required and that's it, unless you explicitly agree to another term lease. That's what I'm on now. Our deposit is the regulated max of half a month's rent.
- kingaillas 6y ago
  I had that once, in an apartment I rented in the US (TX). If you broke the lease early, you were on the hook for the remainder of the lease, UNTIL the apartment was rented again. This was called "rent acceleration" as I remember it. This was also ~25 years ago so maybe it is different now, but it definitely existed and I was subject to it. At the time I bought a house so I broke the lease to move in. Fortunately, the apartment rented within the month so I didn't owe additional fees. Out of curiosity I googled "rent acceleration" and see it is a hot topic now - mostly with commercial real estate and businesses break their leases due to the impact of covid on them. See https://www.jdsupra.com/legalnews/what-landlords-need-to-know-about-6380579/ https://www.jdsupra.com/legalnews/what-landlords-need-to-kno... for a summary. Also interesting is some US states make residential leases exempt from rent acceleration.