Can a landlord let late fees accrue without notice?

2 Replies

My niece was a student at Ball State University in Muncie, Indiana. I have included the section of her lease that outlines how late fees are to be handled at the bottom of this post

I'll do my best to explain what happened in her case:

She would often pay in a few installments leading up to the 1st of the month and then the remainder on the 1st or sometime before the 5th. Her portion of this went was $425. An example of how she would pay her rent would be $200 on 4/25 and $225 on 5/2 for a total of $425 being paid for the rent due on May 1st. On a couple of occasions she got confused on how much she had paid and was short by $30 and $50 for paying the whole amount. Two other times she actually couldn't make her full rent payment in time and had to pay the remainder as late as the 12th of the month. When she was knowingly short on her rent she paid the full amount of the rent but did not include the late fee portion, because she was unsure how much it was supposed to be. Only once in the two years of her lease did the landlord notify her that she was short on the rent. As soon as she was notified she paid the rent in full. Again, he did not notify her of how much she was so pay in late fees. 

Once the lease was finished she was waiting to hear how much of her security deposit back. When she got the letter stating how much she was getting back he had charged her $1225 in late fees and withheld it from her deposit being returned without ever mentioning these fees accruing during the lease. 

Here are the exact examples of when she was off for payments:

19-Jun 50
1-Jul  325

She was accidentally short and didn't pay the extra $50 until August 22nd. He didn't mention late fees entire time


She was 150 short, but didn't realize it (rent had gone up to $440/month). He didn't mention anything about it until April of the following year!

20-Nov 200
1- DecRent Due
12-Dec 240

She couldn't make rent this month and paid the remainder on the 12th. He didn't mention late fees.

15-Feb 180
1-Mar   230  

She was accidentally $30 short and he didn't notify her until April

In April he finally mentioned that she was $180 short on rent from the October $150 shortage and the February $30 shortage, but didn't mention any late fees at the time. She immediately paid the $180 in full. 

That's it. Then when it was time to return the security deposit he told her she had $1225 in late fees and took it out of her deposit. 

I feel like he was being very shady with the disclosure of late fees. If he had made it known that late fees were accruing she would have paid them as fast as possible to keep them from piling up. If he thought that they were not taking care of the house and he would need to use the security deposit for repairs, I feel like he would have been on top of the late fees to make sure they were collected. Since he knew they were taking care of it he let the late fees pile up silently, because he knew he'd be able to take it out of the deposit. If he would have made them known he would have been missing out on this "income".

Does she have a legit case for small claims court? It seems obvious to be that he was taking advantage of her by not mentioning the late fees to her so that they could keep piling up. Is he obligated to make her aware of these even if his lease might say he isn't?

Thanks for reading and I look forward to your responses. 

Here is the section of her lease that details late fees. 

Originally posted by @Amanda G. :

Looks like this landlord makes a business out of late fees. Is it ethical? I don't think so. Is it legal? Maybe. Sorry she is in this situation!

 Thanks. It looks pretty grim for a refund of any sort, but I think we're going to propose a settlement of some sort and see what happens.