Need CPR after CPI rent hike
It was Monday
morning and I was sorting through the papers on my desk approving the
usual assortment of invoices Ė utility bills, insurance premiums,
installment payments and finally, the dreaded rent statement.
Giving it only a cursory glance. I
scrawled a reluctant OK and sent it on its ugly way.
As it settled into the out box, I
noticed there was another line on the statement that I had missed during
my initial painful glance. The statement hadnít changed for years. What
could be different?
I looked closer, hoping for a recession
discount, but I was sorely disappointed. Under the regular rent amount was
the simple: "CPI INCREASE -- $3,168.00"
That was it. No letter of condolence,
no explanation, just pay up and shut up.
Glassy-eyed, I fumbled for the phone to
intercom Ms. Ferguson, My loyal office manager. ""Please bring
me the lease for our main store," I said, trying hard to remain calm.
"I think the landlord has made a mistake."
I secretly knew, deep down inside, that
this particular landlord does not make mistakes. But I was comforted in
those first few critical moments by telling myself that I could not be so
careless as to forget a $3,168 increase in our monthly rent. I find
blaming others before ultimately blaming myself is much healthier for my
As I read the lease that had been
signed nine years ago, I slowly remembered the discussion of the
complicated Consumer Price Index (CPI) formula that would kick in after
six years. It certainly seemed fair at the time.
Things change. This particular increase
was based on the cost of living for the last three years, and sales for
this particular store hadnít increased at all during that time. So what,
says the landlord. Gasoline prices did, so pay up.
I know, I know. I should have been
aware of this change long before it occurred. I should have forecast for
the eventuality of an increase and then monitored the Consumer Price Index
religiously to determine the approximate amount.
I also should have purchased downtown
Tokyo when I had the chance. Besides, if I had forecast for the increase
in the CPI and then watched as sales failed to increase accordingly, I
would have had three years of frustration. Since there was nothing I could
do, I suppose I preferred the ignorance.
I thought back to when the lease was
signed. The concept of a cost of living increase in your lease is that,
theoretically, it should not affect your bottom line. Thatís why we
tenants always find it so agreeable, in one form or another.
And any landlord will be quick to point
out that if the cost of living goes down, the rent will (in most cases) be
reduced. And the fairies will bring you your refund.
I finally found the appropriate section
of the lease and read it through, my ego now prepared for the admission of
guilt. Ms. Ferguson had remained in my office. She always enjoys watching
my head hit the table.
"We hadnít pulled that lease out
for years," she said, with some sympathy. "You canít be
expected to remember everything."
"I want to be a landlord," I
said. "I want to be on the receiving end of the Consumer Price Index.
I want to go into a grocery store and shout with glee when I see the price
of bread was raised a nickel because Iíll know my income will increase
by a thousand or two per month as a result."
Ms. Ferguson started to leave.
"Youíre babbling," she said, all sympathy gone. "I canít
stand it when you babble."
"Our landlord is a
multi-millionaire," I said, ignoring her. "He can afford that
nickel increase in the price of bread a heck of a lot better than me. Why
should I support him?"
Ms. Ferguson had enough. She took the
lease back and left. She might have stayed and suffered longer had she
known I was also thinking (hypothetically, of course) that the CPI
increase could be covered by eliminating her salary.
Left alone, I tried to find some
comfort in my situation. In other words, since I was not about to be a
landlord in the foreseeable future, I tried to look at the bright side.
How boring it must be for them. By
using the CPI, theyíve taken all the risk out of their lives. While we
tenants ride the roller coaster of life, the landlords can only watch it,
knowing their income is tied inexorably to dull, faceless statistics.