Late fee Calculations

[Mak K.]

How is late fee calculated. 

Lease states:

Rent due 1st of the month. If rent not received by 3rd, a initial late fee $75 will be charged. additional $25/day thereafter for until rent and late charges are paid in full.

I use cozy to get electronic ACH payments. So if tenant pays me on 6th, my late charges should be $75+ $25 (Aug4) + $25(Aug5). 

Question#1: Should Aug 6th be included or not?

Question#2: In a scenario that Tenant pays on Aug 6th, and it bounces and I come to know on Aug 8th of bounce payment. Now tenant gets a bounced check fee per lease +$75+ Late fee till Aug 8th.

Am I doing the math correct.

[Aaron K.]

1. No, because if you receive payment on the day it is due, it isn't late.

2. Yes

[Mak K.]

Thanks.

[Greg M.]

Your wording is not clear. I read it that if not received by the 3rd, a $75 fee applies + $25 each additional day. I interpret that to mean that I have until the end of the 3rd to get you the rent before late fees kick in. Therefore, if I don't get you the rent by end of day on the 3rd, a $75 fee is being assessed on the 4th and each additional day another $25. 

[Zachary Ray]

Late fees are important as they create urgency in the renter to pay and can add some additional income while going through this kind of situation. Check how much you are able to charge and do so accordingly. I have noticed most companies charging on the 5th day at 5pm. I have also witnessed some companies charging twice like on the 5th and the 14th.