Tenants paid full rent late, but have not paid late fee

49 Replies

For the second month in row, my tenants have paid rent 3+ days late. My lease states the following: 

Shall tenant(s) accounts not be paid in full by 4:00 pm on the 2nd day of the month, a late charge of twenty five dollars ($25.00) will be added to the outstanding balance to cover costs of collection, and if payment is not received thereafter an additional late charge of ten dollars ($10.00) per day will be added to the unpaid balance.

They have since paid the monthly rent value, but not the late fee totaling $45. Now they are non-responsive to calls and texts. Should I continue to tack on the $10 late fees since there is still an outstanding  balance? How long do I give them before taking legal action? 

Appreciate any input! 

What does your lease say about partial payments ? Also you sure your fees are legal for your area?

What you do depends on your lease and your state landlord tenant regulations. 

If you are actually allowed to take legal action you should have done it the first time they did not pay the late fee. What are you waiting for....they have no intention of paying you a late fee and will likely continue to pay rent when ever they feel like paying. 

Either you manage your property or your tenant does. Which is it.

Either take action yesterday or remove the late fee from your lease. If you do not inforce the late fee in your lease the article becomes null and void.  

When is their lease up. If it is soon or they are on month to month get rid of them asap.

The action you take moving forward must be tied directly to the end result you have in mind. Are these tenants that you want to keep in your unit? Is this a big deal to you in the grand scheme of things? How important to you is it to have a tenant that is responsive to you?

One of the very important questions you need an answer to is why are these tenants paying late? If their financial situation has changed then that can drastically change how you handle it moving forward. Are they still the tenant class you intended on renting to? Charging late fees when actually enforced can be a great way to train you tenants to make rent a priority in their lives, but if they can barely make rent than late fees will have the opposite effect and make them non-responsive. People do not like to face their problems head on, but if you want to truly get anything done its what you have to do. 

what do you want?

Do you want them out?  Evict them. 

Do you want them to pay the late fee? 

I would say they are probably not goIng to pay the late fee so evict them if your lease and state allow it

Or forget the late fee and let them stay 

Why not try to put them on a payment plan if they are paid 2 times a week,  you can charge half the rent after the first 2 weeks and a half the rent after the second 2 weeks? Might be something to consider... 

as someone else said above if you accepted the rent minus the late fees it might be a legal issue at this point.  I'm not sure how tenant biased Oregon is but I'd tread carefully if it's anything like California.  

@Dar Fornelli

I have had this exact situation in my lease for late payments. My lease states due on the first of each month, with 5 day grace period. After the 5th, there is a late fee of $25, and each additional late day is $10 per day. 

Now, what is stated and enforced is two different things. My goal is for them to pay on time. Late fees is just a consequence to make them pay on time. My approach was to ask tenant to give landlord a call if there should be any issues with paying rent on time. If they have issues, then call me. When they call, the first words from my mouth are " I appreciate you giving me a call". Then I would listen to their sorry lame excuse, opps, I mean reason for being late. Then I would ask them for a date when they could pay. If they met the date, then rent resolved. If they did not, then I would charge them the initial late fee of $25.

Take a look at my rent types, normal renter vs. section 8.

Terry

https://www.biggerpockets.com/forums/712/topics/50...

@Dar Fornelli  

I agree with what @Thomas S. said. 

You created that lease with the late fee for a reason. If you don't take action then you might as well not have it at all. As well as the tenants will continue to take advantage. I am 3,000 miles away so i don't know what laws there are in Oregon but as long as the lease follows them then it would be in your best interest to go forward with what you have in your lease. Kind of goes with the saying "**** or get off the pot", They have to pay or potentially have to vacate. 

I'm not sure the laws in your state, but it might be worth taking a look at the order you apply payments. I've seen many others on here state that payments are applied to any past due amounts/fees prior to current rent as you can evict for non-payment of rent, but not late fees (or at least it's harder)

Appreciate all the responses! My property is actually in Lawrence, Kansas near the University. I have verified that I'm legally allowed to charge a "reasonable" late fee, which I would say mine would be against a $1,450/mo lease. My end goal is not to evict them, but for them realize that paying rent on time needs to be a priority. If I go the eviction route it may be difficult to place tenants in the middle of the school year. Any thoughts on how to get their attention if they aren't answering phone calls or texts? I do have a local property management agent I can have go by the house but I don't know what good that will do me if I don't plan to take legal action to terminate the lease. 

Here is my full statement on rent and late fees, including partial payment: 

Rent sent by mail shall not be deemed paid until it is received by the landlord. Shall tenant(s)

accounts not be paid in full by 4:00 pm on the 2nd day of the month, a late charge of twenty five

dollars ($25.00) will be added to the outstanding balance to cover costs of collection, and if payment is

not received thereafter an additional late charge of ten dollars ($10.00) per day will be added to the

unpaid balance. Partial payments received after legal proceedings are commenced do not constitute a

waiver of the right to obtain possession and terminate the lease agreement. All late fees not promptly

paid may be deducted from the security deposit at the termination of this lease.

And here is the section on default of rent payments:  

In the event that the tenant(s) fails to pay the rent as same becomes due, the tenant(s) right to

possession may be terminated at the option of the landlord by giving three (3) days written notice to

tenant(s). Delivery of notice to rental unit shall be considered proper notice to tenant(s) In the event

tenant(s)s fails to comply with any provision of this lease or of the statutes of the Kansas Residential Landlord

and Tenant Act, landlord may terminate tenant(s) right to possession upon giving no less than thirty (30)

days’ notice in writing to tenant(s) of such default...

Am I correctly interpreting the underlined statement to mean I cannot give written notice of default until the next months rent comes due? 

This post has been removed.

If they are students.... late payments are probably going to come with the territory on this one. They've likely had minimal if any experience living alone... and are probably used to being baby sat. Before you say it, yes there are plenty of students that pay on time, but that comes down to screening and luck. You also probably are dealing w/ some of the students  on grants who can't manage the big upfront payments...

If you really want desperate to get their attention you could try sending a formal letter with the lease and the sections you posted to them AND cosigners. Do this signature required to make it a pain and seem more important than piece of regular mail. Fair warning, this could backfire and you could have cosigners bugging you about petty stuff.

this is why I don’t have late fees

I have discounts.  

Eg rent is $1300 due in the 5th. 

If you pay before the 5th it is $1250

Originally posted by @Michael Plante :

this is why I don’t have late fees

I have discounts.  

Eg rent is $1300 due in the 5th. 

If you pay before the 5th it is $1250

 What happens if I don't pay till like the 25th?

@Dar Fornelli

Not sure if you understood what I am trying to say in earlier post. There is logical and there is emotional. The logical is the lease per agreed terms. The emotional is irrational and based upon feelings. 

You are quoting terms of lease, per section, page, etc. I don't think you are realizing you are talking to college age students, 18-21 years old, who may be hung over after wild weekend. Your students and my lower economical tenants are still on the emotional thinking.

At the end of the day, you want to be paid rent. If you don't get the rent, you just want them to leave, and leave property in a decent condition. Once you get on their wild emotional bad side............damage will result. Good luck in trying to collect past due rent and damages.

I'm telling you and you are not listening.

Terry

Originally posted by @Terry Lao :

@Dar Fornelli

Not sure if you understood what I am trying to say in earlier post. There is logical and there is emotional. The logical is the lease per agreed terms. The emotional is irrational and based upon feelings. 

You are quoting terms of lease, per section, page, etc. I don't think you are realizing you are talking to college age students, 18-21 years old, who may be hung over after wild weekend. Your students and my lower economical tenants are still on the emotional thinking.

At the end of the day, you want to be paid rent. If you don't get the rent, you just want them to leave, and leave property in a decent condition. Once you get on their wild emotional bad side............damage will result. Good luck in trying to collect past due rent and damages.

I'm telling you and you are not listening.

Terry

 No I do understand your point and you're 100% correct. I could care less about actually collecting the late fee. The bigger deal is ensuring this doesn't become a habit and then paying on the 5th turns into the 8th turns into the 12th. I don't think the issue for them is having the money available, it's their priorities. I understand and appreciate the sentiment of emotional vs. logical and am trying to toe the line. 

Originally posted by @Nathan G. :

@Dar Fornelli You need to learn your state law. I recommend you read up on Oregon late fee laws and then adjust your lease agreement and late fee policy accordingly. 

 Sorry, a little confusing since I live in Oregon, but my property is in Kansas. From what I've read I'm within the legal rights of Kansas. 

Originally posted by @Dar Fornelli :
Originally posted by @Terry Lao:

@Dar Fornelli

Not sure if you understood what I am trying to say in earlier post. There is logical and there is emotional. The logical is the lease per agreed terms. The emotional is irrational and based upon feelings. 

You are quoting terms of lease, per section, page, etc. I don't think you are realizing you are talking to college age students, 18-21 years old, who may be hung over after wild weekend. Your students and my lower economical tenants are still on the emotional thinking.

At the end of the day, you want to be paid rent. If you don't get the rent, you just want them to leave, and leave property in a decent condition. Once you get on their wild emotional bad side............damage will result. Good luck in trying to collect past due rent and damages.

I'm telling you and you are not listening.

Terry

 No I do understand your point and you're 100% correct. I could care less about actually collecting the late fee. The bigger deal is ensuring this doesn't become a habit and then paying on the 5th turns into the 8th turns into the 12th. I don't think the issue for them is having the money available, it's their priorities. I understand and appreciate the sentiment of emotional vs. logical and am trying to toe the line. 

 Hold up, did you just say it's not them having the money available, it's their priorities? That's on you the landlord for poor screening.... not the college kid who doesn't have his/her priorities straight. Poor screening/poor tenants. You aren't their parent, you're not here to teach them how to prioritize their money... you're here to provide them housing as per your lease agreement. If they can't fulfil their end either deal w/ it or move fwd w/ eviction and find someone who will. 

You also might find this interesting read...

https://www.thestar.com/life/health_wellness/2008/...

And lastly, the threat of eviction probably going to be a lot clearer message than the measly late fee you have no way of collecting... If you're lucky they'll realize they have no other options since it's middle of school year and fast approaching winter months. If you're unlucky they call your bluff and you have to deal w/ a vacancy.

What kind of operation are you running?  People live paycheck by paycheck and certain days they get paid.

From there you deduce what you want to do. There are landlords lose tenants left and right as soon as the lease ends and there are tenants who will stay.  Tenants and landlords are business partners. They support landlords business and they can destroy the business also.

Originally posted by @Matt K. :
Originally posted by @Michael Plante:

this is why I don’t have late fees

I have discounts.  

Eg rent is $1300 due in the 5th. 

If you pay before the 5th it is $1250

 What happens if I don't pay till like the 25th?

On the  8th I start the evicton process

just read they are students

We collect one years rent upfront.  

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