First late rent fee ....

General Landlording & Rental Properties
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First late rent fee ....

Christine Mwai
Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes

Please don't laugh, but I think I earned my Big gal landlady pants today:) This particular lease states rent is due on the first and late on the 3rd. Late fee is $50 and $25 for each late day there after. .    I had to enforce that today..  and it's not me at all... I did it however with a letter.....and the tenant called me back this afternoon..I'm learning and growing. ..

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Julie Haveman
Multi-family Investor · Allendale, MI · Member since 2015 · 121 posts · 51 votes
10y
Christine Mwai If you don't charge a late fee you will be the last bill paid every time! I think it is mandatory for all property owners.
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  • Tom V.
    IA · Member since 2015 · 304 posts · 152 votes
    10y

    It's good that you've chosen to stand by your lease policy and enforce it. Nice work.

    1Reply
  • Christine Mwai
    OP
    Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes
    10y

    Thanks Tom V.

    0Reply
  • Patrick D. Roberts
    Property Manager · Baltimore, MD · Member since 2015 · 46 posts · 13 votes
    10y

    Congrats. One of the most important things about being a landlord is consistency, and although it could sometimes make for an uncomfortable or awkward situation, it's important to stand by your policies. 

    3Reply
  • Julie Haveman
    Multi-family Investor · Allendale, MI · Member since 2015 · 121 posts · 51 votes
    10y
    Christine Mwai If you don't charge a late fee you will be the last bill paid every time! I think it is mandatory for all property owners.
    4Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    10y

    Are your fees legal? Make sure you are complying with state regs.

    3Reply
  • Jibu V.
    Investor · Philadelphia, PA · Member since 2014 · 133 posts · 49 votes
    10y
    One tip is to use an electronic rent collection service to take out the human interaction in collecting rent and other fees. I use Cozy.co to collect rent electronically. I can add the late fees on there and it'll notify the tenant via email. It takes out the emotion.
    1Reply
  • Samantha Klein
    Investor · Monroe, WI · Member since 2015 · 691 posts · 610 votes
    10y

    I have the same concern as @John Thedford. $25 a day in late fees sound very high and are most likely not enforcable in court, I would be careful, if you take the tenant to court, the judge may side with the tenant because it looks like they're being taken advantage of. 

    2Reply
  • Christine Mwai
    OP
    Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes
    10y

    I hear those above asking about the late fee amount.My lease caps it out to a max of 15 percent of the monthly rent.Generally,  late fees should be fair and reasonable. Most states consider 15 to 20 percent as reasonable.

    1Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    10y

    @Christine Mwai, 

    You say "Most states consider 15 to 20 percent as reasonable." Make sure the state in which your property is located allows you to charge up to 15 percent. For landlord tenant laws, what another state allows doesn't matter. It's what your state allows. And conveniently, every state is different. 

    [email protected]Podcast Guest on Show #261
    BiggerPockets
    1Reply
  • Christine Mwai
    OP
    Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes
    10y

    Mine has no specific laws addressing late fees.....15 to 20 percent is what attorneys have told me. I did evict a tenant 3 years ago and the judge upheld my late fee clause.

    0Reply
  • Christine Mwai
    OP
    Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes
    10y

    Did I collect on the eviction judgement?  That's a whole other story:)....have any of you collected on an eviction judgement?...and as for the late fee on this post, my tenant called me, apologized for being late and dropped off the late fee yesterday.  All's well that ends well.:)

    2Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    10y
    Originally posted by @Christine Mwai:

    Please don't laugh, but I think I earned my Big gal landlady pants today:) This particular lease states rent is due on the first and late on the 3rd. Late fee is $50 and $25 for each late day there after. .    I had to enforce that today..  and it's not me at all... I did it however with a letter.....and the tenant called me back this afternoon..I'm learning and growing. ..

     I am curious where you got the amount of your late fee from? It seems kind of high. Even if there is no cap on late fees in your state, if it ends up in court, judges often look unkindly towards landlords that charge excessive late fees. But I guess I don't know what the monthly rent is either.

    0Reply
  • Luka Milicevic
    Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
    10y

    Stick to your guns and enforce the lease! What did the tenant call you about? Did they complain about the fee?

    At the end of the day, they signed a legally binding agreement and they agreed to the terms. Charging the late fee is something they agreed to.

    3Reply
  • Christine Mwai
    OP
    Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes
    10y

    @Luka Milicevic

    They actually called to apologize and paid the fee...

    1Reply
  • Zach Moore
    Property Manager · Sacramento, CA · Member since 2016 · 3 posts · 2 votes
    10y

    Depending on how late they were, I might forgive them if it's a first offense. If it was a day or so late, it may be worth waiving the $50 fee to stay on good terms with your tenants. Of course, don't let it slide more than once.

    1Reply
  • Jonathan G.
    Investor · Marietta, GA · Member since 2015 · 382 posts · 258 votes
    10y
    Zach Moore That's bad advice. Never waive late fees. If you are just starting off in this business, that is an easy way for tenants to start rolling all over their landlords / PM. You should not have to go and chase, beg, plead, ask over and over again, etc. for rent. There's a contract. There's a due date. There is a late fee associated with going over that date. Waving late fees shows that your contract is negotiable. I'm not trying to be insensitive here just hate to to see people have to learn things the hard way when so many of us (myself included ) have already gone through this same scenario and learned the unfortunate way. Charging and sticking to your late fee shows your tenants that rent is a priority. Waiving fees and being OK with late rentals let your renters know that they can pay you last and that's just not acceptable. Geez I'm starting to sound like Greg S on here.
    3Reply
  • Davon Lowery
    Investor · Whitttier, CA · Member since 2015 · 405 posts · 110 votes
    10y

    Good Job @Christine Mwai also, don't know if you have a copy, but, its always a good idea to have a tenants rights and landlords responsibilities, state specific, manual and check the local county/municipal housing authority website for general changes to local ordinances. Things can get a little dicey if you ever are land-lording to a professional tenant, they can be hell.  

    1Reply
  • Christine Mwai
    OP
    Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes
    10y

    I agree now with Jonathan and Davon...thanks for your input . ..once a sucker, always a sucker. :)...I'm not looking back...late fees are not personal. ...same as Power,  Gas, water company. ...:)I'm  a sucker no more.. :)

    1Reply
  • Mike Hanneman
    Investor · Coeur d'Alene, ID · Member since 2016 · 551 posts · 218 votes
    10y

    I am going through this right now as we speak. First late rent this month.

    1Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    10y

    @Christine Mwai I think it is great that you can start to charge late fees after the 3rd in AL.

    In CT we can't do anything late fee wise until after the 10th. 

    3Reply
  • Christine Mwai
    OP
    Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes
    10y

     Mike and Michael Noto...if your late fees on your lease are legal and enforcable,  enforce them.....otherwise it will happen a second or fifth time.  ..nip it in the bud. Best wishes. 

    0Reply
  • Mike Hanneman
    Investor · Coeur d'Alene, ID · Member since 2016 · 551 posts · 218 votes
    10y

    I already had a note on their door and a certified letter in the mail on the 6th.

    0Reply
  • Ralph R.
    Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
    10y
    Christine Mwai Speaking about late fees, I have a tenant that has been late for the last 6 months. We have posted notices every time she is late. She then comes in pays rent and the late fee. 900 a month Rent + 100 late fee totals $1000 a month. Because I had a house off line and didn't want 2 houses vacant at the same time we accepted the rent and late fee. The house is now up and rented. The tenant has been month to month since June but had not had an increase in 2 years, so I mailed her a notice as of the first of October her rent would go up 100 dollars to $1000 ironically that's what she has been paying with the late fee. Rents have shot up a bunch in that town in the last 6-8 months. She's still 100-150 below market. No more 2 year leases for me. For years that house was the hardest thing to rent. Now the demand is unbelievable rents going up and I was stuck in a 2 year lease. Never again. RR
    1Reply
  • Ralph R.
    Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
    10y

    @Zach Moore  you cannot allow a tenant to slide on rent. Not unless it's absolutely something way out of the ordinary. All you do is teach them late rent is ok. It's not your job to be friends with them. The bank won't cut you any slack. If the rent is $1000 dollars and the payment on the house is $500 and they are late you still have to make the payment. Now you are out $1500 dollars.  How many times can you afford to do that?  Now if you have five rentals and you allow one to do it soon you will have 3 or 4 doing it.  Also remember you are training that tenant for the next landlord. There is nothing worse than a poorly trained tenant. And the irony is the landlord that operates like that is the one that fails.  If you can't stand by your rules realestate is not a good option. It's a business built on ethics and rules. RR

    2Reply
  • Christine Mwai
    OP
    Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes
    10y

    Best wishes with that Ralph R. I've never done a 2 year lease myself, coz demand for housing is high in my market. I keep it at 1 so I have options on my end. I'm curious as to why you did 2 years.  I know the benefits,  I guess if you have a great tenant?

    0Reply
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