Typical late fee?

15 Replies

What do you charge for a typical late fee? Anybody familiar with Missouri laws on the subject?

@Reggie Maggard , I'm in California and I charge a flat $50 fee. I know other landlords who charge by the day to really give their tenants incentive to pay on time. I don't typically have problem tenants, so the flat fee works for me.

$3 a day. that's what we do in Montoana

I like the graduated fee like $10 a day. This way it gets people motivated to pay as soon as they can.

I charge a flat fee of $50 once they have passed a grace period of 5 days.

However, this sometimes leads tenants to think that the rent isn't due til the 5th of the month, and wait till the last possible day to pay.

I didn't want to do a daily late charge (I've seen some landlords charge $10 a day), because if the tenant can't pay rent, adding such high late fees will only put them further behind to PAYING YOU. Let's say a 20 day late situation occurs at $10 a day on top of a $500 monthly rent. More then likely if they couldn't pay you the $500 to begin with, they may not even bother trying to pay you $700. Not to mention, you'll force your tent ants into a vicious cycle of trying to catch up once they've fallen even a little bit behind.

I figured $50 was enough of a fee to discourage from going late, but also allow them to recover from it.

But with that said, I have considered doing a daily late fee because MY BILLS need to be paid on the first, irregardless if my tenant pays me, so a daily late charge would more effectively train your tenants to pay by the first of the month.

Originally posted by @Scott Bartlett :
I didn't want to do a daily late charge (I've seen some landlords charge $10 a day), because if the tenant can't pay rent, adding such high late fees will only put them further behind to PAYING YOU. Let's say a 20 day late situation occurs at $10 a day on top of a $500 monthly rent. More then likely if they couldn't pay you the $500 to begin with, they may not even bother trying to pay you $700. Not to mention, you'll force your tent ants into a vicious cycle of trying to catch up once they've fallen even a little bit behind.

 If someone gets too late they're not paying a huge late fee, they're facing eviction at that point.

Originally posted by @Dawn Anastasi :
Originally posted by @Scott Bartlett:
I didn't want to do a daily late charge (I've seen some landlords charge $10 a day), because if the tenant can't pay rent, adding such high late fees will only put them further behind to PAYING YOU. Let's say a 20 day late situation occurs at $10 a day on top of a $500 monthly rent. More then likely if they couldn't pay you the $500 to begin with, they may not even bother trying to pay you $700. Not to mention, you'll force your tent ants into a vicious cycle of trying to catch up once they've fallen even a little bit behind.

 If someone gets too late they're not paying a huge late fee, they're facing eviction at that point.

 With a large late fee, it will only increase the chances of eviction, when eviction could have been avoided (assuming they were a good tenant that just ran into a bad situation). I guess it all depends on the tenant and whether or not you'd like to keep them as a tenant.

@Reggie Maggard  I have it set up to charge $25 for the first day it's late, and then $5 per day after that.

I am not familiar with Missouri Laws, but in PA, a late fee will actually not hold up in court.  Meaning we as landlords cannot apply them to their rent payments if late.  I learned this  years ago in a RE clas I took at local community college.  What we can do is state in our lease that "if you pay before the fifth day of the month it is one price (ex: $600), and if its after your rent is $650.  Advertise the unit for the for a higher rent than you actually want, that way is they pay on time you get what you really wanted ($600), and if theyre late you get a $50 addition (i.e. late fee).  This is legit in PA.  That explanation was scattered sorry, but hope you understand.   

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Florida, here.  I charge $75 flat fee (as "additional rent").  My units rent in the $775-$1400 range.  BTW - I stay away from daily accrued late fees  as my attorney advised a judge may deem it excessive and may not hold up in court.  

$25 one time. In our courts late fees are thrown out.

Did not know that late fees would be thrown out in court...

But if the lease was "reworded" to: If payment for rent is not received by the 5th, $50 additional rent in addition to current month's rent is due.

Would something like this hold up in court? I've been debating the If you pay before this date, your rent will be XXX.XX, and if you pay after this date, your rent will be XXX.XX.

My rents average about $600.

We give them from the 1st-5th (some are on disability / fixed income and don't get checks until the 3rd of each month). IF they go past the 5th and we don't receive $, its a $35 monthly late fee. 

In NJ, my attorney told me the late fee should not go over 10% of the base rent. She said sometimes a flat rate is the best bet. So if your rent is $850.00, on the 6th of the month you can charge $85.00 for the late late. Anything over 10% is frowned upon in court. 

I charge $50 after the 3rd of the month, plus $5 a day until the total is no more than 10% of the base rent. But the times I've had to charge more than the $50, the tenant usually wasn't paying anything and had no intention to. We've had a couple of evictions there. Another tenant is usually late these days, but eventually pays with the $50 late fee. An eviction and vacancy would cost a lot more, and the tenant pool there doesn't have many better prospects.

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