Late fees to charge or not to charge

17 Replies

1) Standard late fee charge & daily fees 2) For section 8 when the Tennant pays very little of the total rent (but never actually pays) eviction time?? Or keep track and deduct from deposit

If Sec8 pays late and tenant pays on time, do not charge late fee. Charge standard late fee (not daily), if vice versa.

Send a rent demand as soon as the grace period ends and just follow through.

If collecting rent is not important to you why do you care about a late fee.

If it were me I would have served the pay or quit notice the first time she did not pay her portion. However you are not me so unlikely you will evict. Just let it go, if you have not enforced a late fee in the past then you have lost your oportunity. You either inforce your lease or you void it.

@Adam Karr even if the tenant's share is only $50, you should still hold them accountable. If they can't take responsibility for that small amount, do you think they'll take responsibility for maintaining your rental?

Our lease states that late fees will be applied for late rent past 5 days... late rent is rent not paid in full or paid at all. 

Check precedence in your state... in Wisconsin, late fees will typically not hold up when trying to collect in court, if you didn't enforce them before. WI also does not allow you to keep security deposit $$ for missing rent or late fees, so if you don't follow up on charging late fees from the start, you miss out on that $$ completely. 

If they don't pay their part of the section 8, evict and also notify section 8 case worker. 

Always charge a late fee

Always charge a late fee

Always charge a late fee

Our system puts on $40 as of the 4th and $10/day (stops st $180 total each month). Managers are not able to remove the fee (only the ops manager can) and I don’t run many reports but I do run a report to see all late fees that’s were removed and explanation for doing so. 

Well do $200k in late fees this year. Not only that but who knows how much time has been saved and rent has increased by enforcing late fees. 

Check your state laws, contract with Section 8 and your lease. What ever you decide be sure to be consistent with all of your tenants so you can comply with fair housing laws.

Always charge the late fees

@Thomas S. Evict over the tenant not paying $49 of the $900. One month vacancy is way more than the missed rent. She has always caught up with us but the question was more about enforcing the late fees during their stay with us and taking it off the deposit when they move out.

In writing about the late fee. Section 8- I think Adam Karr is correct. Check with housing,


Not charging a late fee the first time in doable. Not charging late fee after that will tell tenant they can get away with it and you will let them pass since they only pay a small portion. If the rent agreed upon is $900 and their share is $100 but they pay it late then they are not meeting their obligations under the lease. 

Keep it simple and consistent especially if you have other properties. Dont want to get sued under Fair Housing Act for picking and choosing who will pay late fee and who wont. 

Originally posted by @Adam Karr :
1) Standard late fee charge & daily fees 2) For section 8 when the Tennant pays very little of the total rent (but never actually pays) eviction time?? Or keep track and deduct from deposit

 Yes you should always charge late fees & evict if a tenant doesn't pay in full unless you are willing to just accept the reduced amount you are receiving from Section 8.

 Very important to note that you cannot evict a tenant over a partial payment though. So if Section 8 pays their portion & the tenant doesn't pay theirs you would need to wait until next month & refuse to accept the Section 8 portion if the tenant still hasn't paid their own portion.

Originally posted by @Adam Karr :

She has always caught up with us but the question was more about enforcing the late fees during their stay with us and taking it off the deposit when they move out.

 You should never hold anything until move-out with the expectation of taking it from their deposit. What if she's with you for two years and pays late 20 times? That's $1,000 in late fees and you still have to deal with cleaning, damages, unpaid rent and utilities, etc.

When a charge is due, they should pay it. if they don't, get rid of them or they will continue to cause problems. If you waive the late fee, they'll see you as weak and assume you'll waive other requirements, as well.

I think this is especially true with Section 8 tenants because so many of them feel entitled and have no qualms with cheating to get ahead.

I get it. I really appreciate all the comments and advice. 

@Adam Karr

Late fees are important to make everyone accountable.  I charge 5% of the rent for being late.  In my experience when you apply the late fee it improves some tenants payments.  I have a tenant who has paid on time once in 13 months.  The penalty is 66.75, that’s $801 extra for the year.

The eviction process is always available to you.  Trust me I’m much happier to charge a late fee versus evicting a tenant, cleaning the unit, market the unit and select a new tenant.  It could cost you 60 days.  That’s two months rent.  

This is a people business and we have to make good business decisions.

Good Luck.

@James Wise - That may be true in OH, but it is not in VA. We can not only accept a partial payment, but can accept the entire payment, and if we have already been awarded possession that has not expired we can evict for any reason.

@Adam Karr - A couple of things have not been noted yet. 1) In my state we can't charge a tenant a late fee on the SEC 8 portion of rent. I think this may be a HUD rule, but haven't looked it up. 2) In this scenario you could charge the tenant the late fee on their portion, then when they made their payment first apply it to the late fee and then the rent. If they only paid the rent amount, this will leave their rent payment short.

I personally will never, ever, take money from a deposit. The purpose of the deposit is to protect you in the even they leave and still ow you money for rent or damages.  In our state a Judge will not award us a judgment for outstanding deposit money.  For this reason, I would much prefer the money they owe be for anything other than deposit.

Originally posted by :

@Adam Karr - A couple of things have not been noted yet. 1) In my state we can't charge a tenant a late fee on the SEC 8 portion of rent. I think this may be a HUD rule, but haven't looked it up. 2) In this scenario you could charge the tenant the late fee on their portion, then when they made their payment first apply it to the late fee and then the rent. If they only paid the rent amount, this will leave their rent payment short.

I personally will never, ever, take money from a deposit. The purpose of the deposit is to protect you in the even they leave and still ow you money for rent or damages.  In our state a Judge will not award us a judgment for outstanding deposit money.  For this reason, I would much prefer the money they owe be for anything other than deposit.

 Same in NYC. Typically the late charges will get thrown out by the Judge. It's just a mess for the accounting side when late charges are put against these programs. We do not deduct money from the deposit until the move-out. Deposits are put into a security account and that's also a mess when you are accounting for these type of things.

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