A is now seeking to enforce the payment of rent by B and is claiming $40,000 in outstanding rent for the last 4 months. Advise A on whether or not he can bring an action against B, bearing in mind what they had agreed upon initially

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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A rented his apartment to B for $5,000 per month in January 2015. However, they both agreed to execute the agreement for $10,000 per month, because B’s employers provided him with a housing allowance of $10,000 per month, as stated in his terms and condition of his employment.

 

At the end of every month, B will receive $10,000 from his employers for housing, but will pocket $5,000 for himself and pay A the other $5,000 per month as rent. They both enjoyed a harmonious relationship for 2 years.

 

However, in 2017 because of a gambling problem, B had cash flow issues and failed to pay his rent for 4 months. He avoided A at all time and refused to accept A’s phone calls in respect to the payment of the outstanding rent.

 

A is now seeking to enforce the payment of rent by B and is claiming $40,000 in outstanding rent for the last 4 months.

Advise A on whether or not he can bring an action against B, bearing in mind what they had agreed upon initially
 
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