TYPES OF RENT

• Ground Rent: It is the rent charged by the landowner (Lessor) to the tenant (Lessee) for use of land under specified and mutually agreed on lease terms and conditions. The ground rent may be fixed for the entire period or maybe increasing at fixed intervals of years or may be reviewed at the time of renewal.
• Rack Rent: It is the actual full rental value (Gross Rent) receivable from the property in a It may be rent for land or for land and buildings.
• Virtual Rent: It is the virtual gross rental value to the lessor receivable from the lessee for leased out property. In some cases lessor receives some fixed lump sum amount called premium from the lessee in advance, in the beginning of the lease. This premium amount is nothing but an advance rental for the property. Thus returns to the lessor is divided in two or more parts. Gross Rent actually received from the lessee during the lease period plus notional rental value that is receivable on the lump sum amount (premium) received from the lessee, constitutes total rental or the virtual rent.
• Head Rent: Many times the main Lessee called Head Lessee sub-leases the property to another person called sub-lessee. To distinguish between lease rent paid by sub-lessee to head lessee and rent paid by head Lessee to freeholder Lessor, the term Head Rent is used for lease rent paid by the Head Lessee to Head Lessor, the freeholder.
• Profit Rent: When Head Lessee subleases the property, he normally charges higher rent than “head rent”. This increased rental is called Improved Rent. The difference between head rent and improved rent is called Profit Rent.
• Contractual Rent: It is the rent mutually agreed between the landlord and the tenant under the tenancy contract, which may be written or verbal.
• Standard Rent: Under Rent Control Acts, the norms for rent payable by the tenant to the landlord were fixed. This was called as Standard Rent. Hence “Standard Rent” can be defined as the rent fixed by the Court for land or land with building (premises) in accordance with the provisions of Rent Control Act.
• Market Rent: It is the highest rent that is receivable for the property, by the landlord, in the open market, after considering all advantages and disadvantages of the property as well as market conditions, in a prudent manner.
• Concessional Rent: When the landlord gives premises on rent to some relatives or friends at token or nominal rent which is much below ruling rent in the locality it is called concessional rent.
• Monopoly Rent: Some property has a unique location in the This locational advantage can be exploited by charging monopoly rent to the occupant. This rent is normally higher than ruling market rent in the locality.