I'm reading the thread where the tenant refused to pay the late fee and it got me thinking.
Has anyone run a place with zero late rent policy? No fees, no excuses just a 3 day notice when rent is late. Not suggesting we should but I'm curious if anyone is operating like this. Are there any legal ramifications with taking this approach?
While many enjoy the added revenue fees bring, late fees seem to provide rationale in accepting this behavior. I know of one tenant, not mine, that is always late and always pays the late fee.
No, I am probably too lenient on late fees, but I have never filed a 3 day notice to quit on the first over due day of rent. I would think it would harm your business. Turnover is one of your biggest expenses.
I think it also depends on your state. Tennessee allows a 5 day grace period before charging a late fee, though you could file a one day notice to vacate on the first day overdue. I can't possibly imagine this being a worthwhile endeavor, as it seems way too heavy-handed to me.
Here the legislation is clear that rent is considered late the day after it is due and the landlord has the right to server a Notice to Vacate which gives the tenant 7-days to pay all arrears or 15 days to move out.
That said, our policy is clearly documented and incorporated in a schedule to the lease that rent is due on, or before, the first day of the month and a late fee will be assessed at the close of business (17:00) on the 4th of the month. If any outstanding balances remain as of the 7th, a Notice to Vacate is served. For repeat offenders - late rent more than 2-times in 6-months or 3-times in a year - the late payment fee is assessed on the 2nd of the month and a Notice to Vacate served on the 5th.
We have only had two tenants get to the Notice to Vacate stage and one who paid 7 late fees in one year - then we did no renew the lease.
I have never filed a notice because the rent was one week late, much less one day late.
However, every landlord and every situation is different. I know a guy in DC who files notices as soon as the rent is late. And I know another guy who doesn't even consider filing unless the rent is at least 30 days late.
Sure, a zero tolerance late fee stance is possible, but it would bother me as a landlord to have to take that position. It would seem ridiculous to file a notice a couple of days after the due date against a 3-year tenant who has never been late with the rent.
As a matter of policy, all landlords should file their Notice to Vacate as soon as legally allowed by their jurisdiction.
HOWEVER, that doesn't mean you have to follow through with it, but if you don't file early on, you will, 1.) Be behind the 8-ball if you do need to, and 2.) Reinforce the behavior. If rent is late, the very next day we file the notice to vacate within 24 hours, and then eviction notice the following day.
Tenants don't know we'll stop the process until they call and pay rent, then we terminate the process. But, if they don't call or don't pay, we are already working towards the inevitable.