454. Permissible Discounts

65:21 It is permitted to increase the rent on real estate in the following manner: If someone rents another a piece of property, he tells the tenant before he takes possession, “If you pay me the rent now, it will cost you $10,000 a year but if you pay in monthly installments, it’s $1,000 a month.” This is allowed because rent only has to be paid at the end of the rental period. If the landlord agrees to accept $1,000 a month, which comes to $12,000 for the year, it is not the same as accepting payment for deferring the rent because the tenant is not obligated to pay in advance. The landlord’s offer to accept $10,000 up front is a discount for paying before the due date, which is permitted.

One can increase the rent on real estate in this manner because the tenant takes possession of the property immediately; one is not permitted to increase a worker’s wages in this manner. For example, let’s say that someone hired a workman to do a job for him at some later date and he paid the workman his wages the day before he started the job in exchange for which the workman agrees to do the job at less than the going rate. This is forbidden because, since the worker has not yet started the job, the advance payment is like a loan. However, if the workman starts the job immediately, even though he may not finish it for many days, the boss may advance him his wages so that he will do it more cheaply. Since the workman will start the job immediately, it is considered wages and not like a loan.