Investor · Sask, Sk · Member since 2017 · 85 posts · 25 votes
What is protocol for charging and collecting overdue rent? The lease states 2% interest. I'm not sure if I wait until it's paid and then send a bill for the actual interest amount? Or should I send a letter first? Thanks.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
8y
Leona:
If the Residential Tenancies Act in SK allows you to charge a late fee, I would simply charge a flat fee (i.e. $50.00 or 5% of rent) and have your policy specify when it is levied.
viz. If rent is unpaid as of end-of-business (17:00) on the fourth day of the month, a late fee of $XX.00 will be assessed.
Trying to calculate accumulated interest on the outstanding rent balance is too much effort for what you will collect ... I would only go this route if required under legislation.
You could even specify a different treatment for tenants who are frequently late (i.e. 2, or more, times in a year) and have the late fee assessed on the 2nd.
When we assess a late fee, it is due with the overdue balance of rent.
If it is written into the lease, there is no need to send a letter ... though you might send the tenant an email reminding them they now owe a late fee in addition to their rental arrears.
We also have a hard-stop where we issue a Notice to Vacate: For tenants who are late paying rent for the first time we will wait until the 7th. For repeat offenders, we issue a Notice to Vacate on the 2nd.