How to ask tenant for late fee?

Question

How should I let me tenant know that they owe me a late fee?  I am on a texting basis with all of my tenants but should I send them a letter?  What happens if they don't pay it but continue to pay rent going forward?  Thanks for the advice.

Bill S. · Answer

@Pat Martin - first off you don't "ask for" a late fee. When they don't pay on time you text them the amount due (if you have a one time late fee) or the amount due that day with a note that the amount is increasing $XX per day.

After the fact (meaning they paid but without late fees) I would text them and let them know rent is short by $XXX and that payment is due by 5pm today to avoid additional costs and potentially eviction. If they don't pay up or communicate and pay up you post notice to begin eviction according to your local laws.

The landlord is in charge. The tenant is not.

Your lease should have something in it stating that funds received are first applied to outstanding funds owed (in this case late fees).

You might consider changing the method of rent collection. I would recommend an ACH service. If the money's there great. If not, it's crystal clear they are late.

Shawn Thom · Answer

I use erentpayment.com for drafts.  I like it because it has an option where the tenant has to go through the landlord to make changes.  Tenant can't just cancel it without going through me.

I do not give a discount.  I just tell him that's how I collect rent.

it costs $3.

Bill S. · Answer

ACH costs vary, it's usually less than $5 per month per unit but it depends on the service you select. Some have higher initial cost but are cheeper with additional properties.

erentpayments is one mentioned above. ClearNow is another that I use but have not financial interest in. There are others but be sure that you use the one that TAKES the money from the tenant's account. That is the only way to go.

The policies on NSF varies. Usually there is some cost but it's cheaper than banks in my case and the charge is only after they fail twice.

On the deposit side your account number doesn't go to the tenants. The debiting service is the only one with that. But really a tenant having your bank account number is not that risky. They would get your account number if you write them a check for example. Some banks allow you to have deposit only accounts as well. What you can and can't do is usually more a function of the bank you use.

If you have the tenants do the deposit directly you can keep track by changing the rent amounts by one dollare. Tenant A pays $501, B $502, and C $503. Keeps it all straight. Some banks allow the tenants to write their address on the deposit slip as well. You can usually see those online. With ACH they orcourse keep track of who pays what so that's not a problem there.

Jarrett Harris · Answer

I have it written in my lease that an NSF check is a $25 fee.

Pat Martin · Answer

How much does the ACH cost?  Who are some good companies that take care of that?  What happens if they have NSF do you get charged?  Then on the deposit side... Do you give your account number to tenants?  Are there any problems that can arise from that?  If they deposit cash how do you know which tenant deposited the money?

Bill S. · Answer

@Andy Robison you really need to get an ACH that takes the money from their bank account on (x) date. One time setup and then no thinking required. Very easy and well worth the nominal fees.

If they don't have a bank account, they must deposit into your bank account by the (x) date. Pick a bank closest to the property. You will be able to see the deposit online and if you want you can sweep the account after the deposit.

Cal C. · Answer

What does your lease say?  On the 5th if you don't have the rent, send them a text saying they are now late and must add a late fee.

Pat Martin · Answer

thanks for the advice.  I have charged a late fee before and I just asked for it through text.  Just making sure that's correct.  Also, if rent is late on the 5th does that mean in my mailbox or post marked by the 5th?  If it means in my mailbox how would I prove that I did not receive it on the 5th if it comes on the 6th or 7th?  Thanks!

Cal C. · Answer

As @Bill S. points out they don't owe you a late fee they are short on rent.  Make that crystal clear to your tenant.  Texting is fine as long as you keep a record of it and have some way of printing it off to show a judge.

How to ask tenant for late fee?

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