Credit gives the word to pay either by repaying it or returning those resources later. In other words, this credit is the method of making the reciprocity formal, legally enforceable, and of course, extensible to a vast group of people who are not related.
However, the resources provided may be financial or have goods or services, like consumer credit. The credit covers any form of deferred payment. Credit generally gets extended by the creditor, the debtor or lender, and sometimes the borrower.
CPI and market rent escalation go hand in hand. Several agreements, as mentioned, have provisions in them, stating how rent will increase or escalate, based on the CPI, and adjustments will be made accordingly. Some leases have other such indexes for pricing, and not just the CPI. The formula for CPI escalation is usually the following- A = B x CPIn CPIn-1. Here, A is the payable price from and inclusive of the date of adjustment, B is the price that is payable just prior to the relevant date of adjustment, CPIn is the CPI for the quarter that is concluding three months prior to the date of adjustment and CPIn-1 is the CPI that applies for the quarter concluding six months prior to the date of adjustment.
CPI and market rent escalation are vital aspects of the real estate sector. Naturally, there are many lease agreements or contracts which have such clauses for rent escalation.
