When do you collect late fees?

6 Replies

I have a question regarding late fees. My lease doesn't specify when a late fee is to be collected but it does specify that if rent is not received after the 10th day of the month a late fee is assessed. Last month I had a tenant pay via money order on the 12th but did not add the late fee. I've already been in contact with the tenant to enforce the lease and notify the tenant the late fee is due. Should I be collecting the late fee prior to the next monthly payment. Is the late fee due ASAP or should that have been spelled out in the lease? Thanks


@Steve Boianelli

Assessing a late fee levy on the 10th of the month (1/3 of the way through) is very generous of you - we assess ours of the 4th for first time / infrequent offenders and on the 2nd for repeat offenders (2 or more times in 6-months).  We issue Notices to Vacate on the 7th (first time offenders) or 2nd (repeat offenders).

In our lease we are clear that payments from the tenant are applied to the oldest amounts owing first.  Hence if the tenant was assessed a late fee in November which was not paid, when they remit a rent payment for December, the monies would be first applied to the arrears, and any remaining amount would go towards December's rent.

@Roy N. Thanks for your input. Yes. It is generous however it has worked for me. Previous leases had a 3 day grace period and it lead to too many evictions and headaches. For these properties the 10 day grace period has been helpful.

My lease specifies "...If you pay less than the full balance due, payments will be applied first to the earliest unpaid rent and other additional rent charges."  I'll make sure to enforce that, I just like to get additional insight from other investors about how they apply late fees. In the past late fees turned to non payment, turning to evictions. So in this particular instance I received rents in full two days late. I'll apply the late fee on December's statement. 

Thanks Roy

Hey Steve,

I require that it gets added on to the rent.  I won't accept the rent without it, and if they refuse, then I follow suite with a failure to pay eviction.  It's harsh, but it's the only way to enforce these rules on tenants who think that THEY make the rules.

Good luck!

Should be collected ASAP. Next lease re-write it so rent is due on last day of prior month, late fees start on the first. 

"Previous leases had a 3 day grace period and it lead to too many evictions"

Late fees do not lead to evictions, Bad tenants and unqualified landlords are the cause of late payments and evictions. As a properly run business you should be issuing a pay or quit notice the day after rent is due and be training tenants to never pay late. When a landlord is having issues with tenants not paying on time it is always the landlords fault due to inadequate tenant training. 

When a landlord is not paid when the rent is due you are providing your tenant with a interest free loan.

Typically I add it to the tenant's account, and it is due immediately. 

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