Eviction for nonpayment of late fees

25 Replies

I have a tenant who has been late with rent payments since August. He's currently paid through Sept, but hasn't paid Oct. He has racked up $360 in late fees. He said Oct rent is 'in the mail' and that he can't pay the late fees until next month. (That's what he said last month.) I've sent him the pay or quit notice and as of today I sent the eviction notice. If he doesn't cure by Oct 15, but does pay the Oct rent, can I proceed with eviction based on non payment of late fees? I don't see anything about this in NH law. I can consult my attorney, but thought I'd start here.

In my state, the acceptance of any payment after the pay or quit is served negates the notice and makes you start over.

A lot of tenants have successfully argued late fees as usury.  As a  long in the tooth LL that has seen much worse, I would vote it being overkill to try and evict because of late fees.  

My goal is to train the resident to pay on time and perform under our lease agreement. Late fees are rent reminders.  One 4-yr resident I had started paying late all the sudden.  3 months in a row @$70 each.  I told her I would waive those fees with 4 on-time, in-full payments.  She did, then lived there 2 more years without being late once.  I considered that a success @Renee R. !

Late fees can be claimed in a court of law as part of the Judgment for non payment of rent.  It's usually included on a second line of the Judgment and added to the total Judgment amount.  (Check your state laws).

This is how it should go down.

Rent is due on or before the contract rental due date.  If not received in your office on or before that date (preferrably the 1st of the month) then on the 3rd or 5th day past your rental due date, according to your contract, a late fee will be charged.

If the tenant sends in their rent to me without their late fee, then I will call the tenant and let them know that they didn't include the late fee and that until I received their late fee, the eviction process is still on-going, but I will hold on to their check or money order until I receive their late fee, or until our court date.  (It will go uncashed and never deposited as the rest of the money (the late fee) has not been paid which has become part of the rent still owed). 

Once the late fee has been received prior to our court date, then I will call the court and file a Dismissal, due to your account now being paid in full, but not until then.  It is at this time that I will deposit the rent money and the late fee into the bank.  One important thing.  On an eviction I never accept a check.  They must pay me in a Cashier's Check, as they can stop payment on a check and a money order).  A Cashiers Check paying everything in full in the only way they can stop the eviction process).

Bottom line.  If a tenant doesn't include the late fee with their rent, I either send back the check or money order to the tenant or I call, but either way, until I receive all monies in full, the eviction process is still scheduled. 

Saves lots of headaches and arguments. 

Nancy Neville

Renee, your lease should state that payments are applied first to outstanding late fees and repair invoices.  So if a tenant doesn't pay a late fee, the next month's rent would be applied first to that late fee, and then they are short on the rent.  It needs to be spelled out in your lease.  

So depending on the wording of the lease, I would still consult a NH landlord attorney.  There have been several recent changes in NH landlord laws and I'm not completely up to speed on them.  

I second the statement that late fees (and legal/court fees) are applied FIRST...then the funds go towards rent. So in your case, they are short on the actual rent portion of their payment.

Thanks for the mention @Brilliant Clayton .  Love your name, btw!

In this case I 're-trained' my resident to again to pay on-time by agreeing to waive the $210 in late fees if she paid on-time and in-full for 4 consecutive months.  For the last 2 years of her residency prior to buying her own home, she was never late again.

We are still friends to this day.  I don't strive to be buddies with all of my residents, but without the rewards of quality relationships I would have quit being a LL a long time ago.

Apply the payment to the past due balance, which makes them short on the current month's rent as others have stated. However, make sure your lease makes that clear and also consult your attorney prior to starting the notice to quit process.

@Renee R. ,

The lease is really the best place to set the stage for these sorts of things.

I found out, from a Judge during an eviction hearing, that you can not include the late fee on the Demand for Rent, unless the lease clearly states that all fees become part of rent once incurred. Now, of course, my lease states that. My lease also states that I may accept partial payments without cancelling the eviction, and I add that to the eviction notice as well. I have heard that this will hold up in court, but I have not yet been in the situation to find out for myself. Like @Ann Bellamy mentioned, my lease also specifies that all payments will be applied to outstanding fees before being applied to back or current rents.

What I am unclear on, and I would greatly appreciate input from others, is whether or not I can simply send updated lease verbiage to tenants whose leases have expired (and are therefore month-to-month), without getting their signatures, or if I have to take the time to approach each of them individually and get them to actually sign the new lease. I am adding things to my lease relatively often (a couple of times per year at this point), so it would be nice to just "inform" my tenants of the changes rather than to get their signatures. The real estate attorney I use for title and closings advised that I need signatures, but I'm not convinced.

Thanks, All, for the suggestions. I can see that I need to revise my lease language to note that any payments go to late fees first.

As of today, the tenant hasn't paid any October rent. I delivered the Demand for Rent and Eviction Notice on the 8th. He started firing texts at me that I can't evict him and he'll just tell the judge he has lots of expenses due to his custody case. (I didn't respond. He seems like he could be a bit of a nut case.) After the 15th I can get the Writ. Can't wait to get him out.

On the up side, contrary to some things I've seen in these forums, in NH if you work out a payment agreement and the tenant doesn't comply, you don't start at square one; you just need to file an affidavit of noncompliance and the process goes from there.

Originally posted by @Renee R. :

Thanks, All, for the suggestions. I can see that I need to revise my lease language to note that any payments go to late fees first.

As of today, the tenant hasn't paid any October rent. I delivered the Demand for Rent and Eviction Notice on the 8th. He started firing texts at me that I can't evict him and he'll just tell the judge he has lots of expenses due to his custody case. (I didn't respond. He seems like he could be a bit of a nut case.) After the 15th I can get the Writ. Can't wait to get him out.

On the up side, contrary to some things I've seen in these forums, in NH if you work out a payment agreement and the tenant doesn't comply, you don't start at square one; you just need to file an affidavit of noncompliance and the process goes from there.

 Except that there was a recent NH Supreme Court decision with the result that any rent agreements between the landlord and the tenant that are future to the court date will be denied.  This may be a temporary change, but you need a good landlord attorney who stays up to date.  Here is the text of the law:

http://law.justia.com/cases/new-hampshire/supreme-court/2015/2014-057.html

@Ann Bellamy , Thanks, I'll read the court decision. It seems that the agreement is okay, but you can't leave the writ open-ended. I'll see if I can figure it out. Otherwise, I just won't enter into an agreement. 

I'm not sure what to do if this goes on another month. The limit for an eviction is $1,500 and the October rent is $1,295, not including filing and service fees. If the tenant also doesn't pay November, where does that leave me--just small claims court? Would it be eviction court for Oct and small claims for Nov? Can I also get a collection agency after him at the same time?

@Ann Bellamy - I've read through the decision and it seems the issue was that the agreement included on-time payment of future rent, otherwise the current writ of possession would go into effect. The court says the tenant can't give away his rights on a future event. 

I think if the agreement had only included the requirement of payment of arrearages (and not on-time payment of future rent) it would have been fine. 

I believe that is correct.  As far as including the rent in the eviction process, my attorney always told me never to ask for rent payment during eviction process.  I don't remember the reason, some nuance of the law I'm sure.  It's been a long time since I've done an eviction.  Your attorney will explain why.   I have however, successfully gone back to court and dragged the tenant back in after eviction to force the payment issue.  (This is NH only)  The court made them make payments, which worked until they moved and I couldn't find them.  I don't think it was small claims, I think I went back to the same district court where the eviction was filed. 

So my attorney's advice was to get them out first, make it as clean as possible, and then worry about back payments.  Using an attorney for your first eviction can pay for itself.  For example, he negotiated with the tenant outside the courtroom to give them an extra 2 weeks to move out in return for a payment of $300.  They had to pay the $300 right then to the court, which I then received.  Why did he do that?  Because when the attorney stands up and tells the judge that we have reached an agreement and the tenant tells the judge that they have indeed entered into this agreement, they can no longer file an appeal, which is the normal way that they would delay the eviction.  So they get a shorter time than the appeals process would afford them, I get $300 more than I would get otherwise, and at the end of the 2 weeks they were out or the sheriff would have locked them out.

So I recommend you not try to self help on the first one, although you are doing lots of valuable research.  Spend the money, understand the nuances that are not evident to you but that your attorney will explain, and then do it yourself in the future.  Just my 2 cents

@Ann Bellamy is correct on not going after any arrearages during the eviction process. This means leaving the Statement of Claim blank, and this strategy was explained to me by a NH eviction attorney, and was hinted at by a NH judge.

Reason being: It gives them something to appeal. They can bring in all sorts of arguments regarding the amount owed, and then another hearing will be scheduled to sort out the disagreement. Meanwhile, you don't have possession of the home. So, the best way to handle it is to keep the eviction clean and simple (no statement of claim), get them out so you can replace them with a good tenant, and then go after the arrearages in small claims court. Yes, it will be difficult to find them to take them to small claims (it's your job to locate them to be served by the Sheriff), but your chances of actually being paid the arrearages are slim even if the judgement from the eviction hearing finds that they are due. Even in that case, if (rather when) they do not pay, you will have to locate them for the Sheriff to serve them to go back to court. Just because they violated a court order does not mean that the authorities are going to make any effort to enforce - and in our experience, they don't. Furthermore, in our experience, you can take them back to court multiple times and you'll end up getting $5 per week, which they then won't pay, and you'll finally end up realizing that it isn't worth it. Best thing to do is evict immediately upon non-payment, keep their security deposit to cover most of the losses, swallow your pride and eat the rest. The opportunity cost is simply too great to try to get blood from a stone. The difficult part is not letting your soft side give them the benefit of the doubt and allow them to get too far behind in the first place. 

On Thursday Oct 29th there is a NH eviction seminar in Manchester. I attended it a while back, and I learned enough that it was worth the $149. Search for J. Durante Education Services LLC and you'll find it.

Good luck

Two votes for @Troy Zsofka 's answer.  Thanks for the explanation, that jogs my memory, and I agree with you that was the reason.

Also, when I then took the tenant back to court for non payment, the courts did order them to pay on a payment plan.  Every time they paid, yay!  That was twice.  Then I would have to drag them back to court and the courts would again tell them to pay.  I had found where they were living so could get the documents delivered properly.  They then moved, and I tried a skip trace service, and they were nowhere to be found.  

I went through this whole BS process to educate myself on the process.  At the end I concluded exactly what Troy did:  Not a good use of my time and energy.  The only value I received was education.  Which is fine, but I won't educate myself on the same topic again.  :-)

I have a question I don't see here: what is the level/amount of your late fees? I'm guessing 10% ($120)? That may be how your lease is written but it sounds excessive, as most states that have weighed in by law on late fees cap it at 5%. You may want to review your late fee structure to make sure it would seem reasonable if you had to go into court to collect those fees. Some states will actually award money to the tenants if the court agrees that the late fee is egregious. 

NH has no Late Fee statute. However, I agree that it would be plausible for a judge to determine that the late fee is unreasonable even without a statute. I charge $50 across the board. My average rent is $1,153 so it's less than 5%. I want it to hurt enough to incentivize timely payment, but to be reasonable enough not to destroy my relationship with a tenant when I charge it. I also have had tenants who routinely pay rent a week late and include the $50. It reminds me of the people who run to H&R Block each year and pay hundreds to get their income tax return 3 weeks earlier. Both are fiscally irresponsible, but I'm happy to collect the extra $50 each month if that's the way they want to roll...

What I've seen before that works is, in the policy say, if there are any outstanding fees, those are applied to rent first. Meaning, if their rent is $600, and they owe a $25 late fee, and send you a check for $600, they really only paid $575, and you don't accept partial payment, so therefore they have not paid their rent in full.

@Brilliant Clayton Steve has it right. Train the tenant (economic incentives always work) and feel the love all around, esp in your bank account.

Others are technically correct (evictions, etc) though you have some issues in having already accepted payment, etc, and your time and quality of life goes straight to hell once the paperwork starts. 

Would you rather have everything just work, or would you rather ding them procedurally?

Best of luck! And awesome name, I wish my mom had as nice an epidural. 

@Troy Zsofka I'm not sure I fully understand what you mean by no statement of claim. I don't intend to put the late fees on the statement of claim, but are you also saying I shouldn't be putting the late October rent of the statement of claim? If not, what's the point? 

Thanks for the tip on the Oct 29 seminar.