It is in your best interest as a landlord to establish a policy addressing late rent payments. Get legal answers to frequently asked concerns concerning late fees and other issues.
What you will discover:
Is it permissible to charge late fees?
How many days may a renter go without paying rent?
What is the statutory maximum late fee?
As a landlord, strike the correct balance.
As a landlord, you may have monthly rent payments that cover expenditures such as mortgage, utilities, insurance, and upkeep. When your renter fails to pay rent on time, it may cause you financial difficulty or force you to be late with a payment.
Tenants that are late with their monthly rent waste important time and administrative resources, while also adding stress. That is why it is in your best interests to include a policy for late rent payments in each Lease Agreement you sign.
We will go through typical issues about past-due rent and what to do if your renter is late.
Is it permissible to charge late fees?
To legally enforce late fees for past-due rent, your written Lease Agreement with the tenant must specify what costs will be imposed and when they will be charged. Some states and local governments have established criteria on the amount of late fines or the length of the grace period, so it is essential to consult with a lawyer to verify that your policies are legally compliant.
How many days may a renter go without paying rent?
You may impose a late fee in several jurisdictions even if the rent is just one day late. Other states call for a grace period. While a Late Rent Notice and a Rent Payment Plan or Late Rent Payment Agreement may occasionally settle past due rent, you may need to take further action.
While evictions are frequently more expensive and time-consuming than just talking with your renter, you are usually only obliged to wait 3-5 days before beginning the procedure with the court. The actual amount of days depends on your state and municipality.
You may not be allowed to evict the tenant until a later date owing to COVID-19 eviction moratorium rules, or you may need to offer the renter with a lengthier notice period. If you choose this option, it is strongly advised that you consult with a lawyer to decide when you may serve an Eviction Notice.
Whatever your policy, it is critical to be fair and firm, and to implement it consistently.
What is the statutory maximum late fee?
Some jurisdictions require late fees to be recognized as “liquidated damages,” which implies that the charge must precisely represent the landlord’s real losses as a result of the late payment of rent. You have a bit more discretion in how much you may charge if your state or local jurisdiction does not put restrictions on late rent fees or classify them as liquidated damages.
Most reliable online landlord guides recommend collecting late fees of 5 to 10% of the monthly rent amount, while late fees of more than 5% are not legal in many jurisdictions or circumstances. Another possibility is to charge a flat cost for each day the rent is late, as long as this is permissible under any relevant legislation. A lawyer can advise you on the maximum late charge authorized for your rental property.
As a landlord, strike the correct balance.
Understanding your rights and obligations as a landlord is essential, but so is striking the correct balance that will allow you to succeed while avoiding time-consuming tenant conflicts. If you have any particular queries or concerns, look into other legal information for landlords or consult with a lawyer.
