I think the only time we've waived the late fee is when there's been a bank issue or what seems a legitimate reason for being only a day or two late. We go over the lease with our tenants before they move in and tell them we enforce late fees. They are never surprised or say they won't pay them if/when they're late. We charge every time, otherwise. Tenants have let us know if they'll be late, and they acknowledge the late fees will be paid with the rent.
If you give leniency more than once, you're basically training them that the rent can be late, while they pay other bills first. And they'll let it go later and later.
I think the only time we've waived the late fee is when there's been a bank issue or what seems a legitimate reason for being only a day or two late. We go over the lease with our tenants before they move in and tell them we enforce late fees. They are never surprised or say they won't pay them if/when they're late. We charge every time, otherwise. Tenants have let us know if they'll be late, and they acknowledge the late fees will be paid with the rent.
If you give leniency more than once, you're basically training them that the rent can be late, while they pay other bills first. And they'll let it go later and later.
We send out the pay or quit, even if the tenant calls and explains the situation, so there is no hold up on our end with getting a court date of a delayed court date. Once the tenant pays, we disregard the pay or quit, if the tenant doesn't pay, we move forward with the eviction process. Regarding the late fee, we judge and enforce it on a case by case basis with each tenant. We have given some leniency, but too many excuse means it time for us to part ways.
Ugh. I hate to say this but sometimes I will let the late fee slide if its only a day or two. But with the caveat of "first and final warning" and only once a year. It's not a good practice because it trains the tenants the wrong way.
I know some landlords charge very high late fees. I don't do this. I want them to pay the rent - not bury them in late fees. It should just be enough to motivate them to pay on time.
If I know they're tight on money, sometimes I'll take a partial payment to cover the next X number of days.
Squeeze them for what they have. Then I bust out the 3day notice.
I have a tenant who tried to use security deposit to 'pay' me rent. I had to explain to him the severity of the consequences. i.e eviction going on his background and credit history, no decent landlord ever wanting to rent to him, no lender ever going to give him a home loan, etc. Some people just don't understand this and think they can get away unscathed.
I had another tenant who said she "just doesn't have the money".
Of course, she just didn't want to pay me and wanted to break the lease and move out.
I told her, give me half month's rent, and I'll let you move out in half a month.
Half month was better than nothing. I was lucky that time. It was summer, and I found another tenant.
Basically I try to squeeze everyone before I decide to go through costly eviction. I assess the situation, and never hesitate with the 3day notice.
Good stuff everyone. I try to be hard and hold to my rules, but I admit I also sometimes will be lenient when I feel a little bad for them or they have a good excuse. However, it always amazes me that when a tenant tells me that they can't pay, and I tell them there will be a late fee - they almost always seem to find a way to pay it.
I also started charging an "extension fee" for a few people, which was $25 bucks (half of my normal charge) and I'd give them an extra 3 days to pay, because some tenants didn't get paid until the 5th, when it was due. However - as soon as I enacted this, somehow they, too, always were able to pay on time. Funny, eh?
We strickly enforce out late fee policy on the first offense to make sure we are setting the right expectations for our tenants. In the past we were more forgiving and it ultimately just backfires...
With that said, under certain circumstances we bend the rules and forgive a portion of the fee if the tenant is proactive and let's us know the situation. For example if the tenant calls us on the 20th and says that their car broke, and they can't pay till the 9th, we may forgive a few days of late fee to keep the situation from getting worse. If they don't pay on the 9th, the pay or quit notice goes on their door.
I'm continually baffled by the way that rent is not to be had. Shelter is a necessity. However with that being said, we have a huge problem with late pays. Right now we are on a 'rehabilitation' program with our tenants. They can catchup at 1/3 of a months rent by the 15th, as long as they pay current month on time, if not they get their 5day. Welcome to Nevada. Of course we caused our own problems by having a bad pm signing leases and collecting, but we are in the process of getting our new pm. To lay down the law and get the checks ontime.
One thing that I tell my tenants when they whine about the late fee is, "If you don't want to pay late fees, all you have to do is pay on time."
I have a lot of rentals in class C type neighborhoods. I generally make between $200-$500 per month in late fees. It really adds up. What I have found is that $50-$75 is a good number. Years ago, I was charging $80-$95 for late fees. Most paid on time, which is good, but my income went down. People also really complained about the high fees. $50-$75 seems to be a reasonable amount that people will pay consistently.
It's the same people every month that are a day late and a dollar short. I have a few that pay early, a whole bunch that are right on time, and then the same usual suspects that run out of money before they run out of month.
I've been advised by my property managers that late fees are often thrown out in eviction judgments. And that they generally are not enforceable. As a deterrent, they are a great idea. But in my situation, I've found they are ineffective in getting rents in on time.
Other than a couple of tenants that I've had for a while, everyone pays me electronically. I always get my money on the first. So, there are never late fees. Some ok'd having the rent automatically deducted from their account every month thru erentpayment, others pay me thru PayPal. Either way, I get paid on time. I highly recommend it.
If the late rent is a first offence, we send the tenant a reminder on the second of the month. If any rent is outstanding on the fourth of the month, we assign a late payment fee. If the Tenant is a repeat/chronic offender, we assign the late payment fee on the second of the month.
The only time we entertain waiving a late fee is if a Tenant, with a strong payment history, comes to us in advance and asks for a delay in remitting a portion of the rent. We actually had this happen this month, the Tenants dog required surgery in April and the Tenant dipped into their savings to cover the bill(s). They approached us more than week in advance of May 1 and asked if they could pay on the third - this is a tenant who normally hunts us down in advance to pay their rent.
I don't do late fees. Doesn't work in california either. A few attorneys say you can charge them, others say you can't.
3 day threat to evict is still the best way to get them to pay up.
I am going to try a new strategy against tenants and become a sort of financial advisor-
"You've got direcTv, a fancy iphone with a fancy cell phone plan, and other costly BS. You're a frequent customer of Starbucks. Maybe it's time to cut these things so you can pay my rent !"
Some people say it's none of my business. Oh, but it is. You're dumb with money, and my rent should be your highest priority.
"You've got direcTv, a fancy iphone with a fancy cell phone plan, and other costly BS. You're a frequent customer of Starbucks. Maybe it's time to cut these things so you can pay my rent !"
I use a similar line with water bills. When they are signing the lease, I explain to them that the water needs to be paid in full, every month. I tell them that if you only have enough money to pay for one thing and it's between cable, car insurance, or water, make sure the water is paid.
Instead of late fee's they get a "Rent Credit" of $50 if the letter is postmarked by the third. We sign the lease for $50 more than the advertised price to accomplish this. That way, if we do go to eviction court we'll be getting the $50 fee/credit.
I had a judge throw out my late fees once because they were more than 10% of the rent. He told me that 10% was the maximum that I could charge. Since then, I have kept it to 10% or less and have gotten them everytime. I've been in front of many different judges and none have ever questioned my fees.
Joe Delia, I suggested that again to my property managers when they told me that late fees get thrown out here in nevada, and they said the clients they had who tried that had exactly the same response from the judge, and threw out that amount.
When it comes to the eviction process I think the way you charge, and the amount you charge is going vary in each local market.
Joe Delia, I suggested that again to my property managers when they told me that late fees get thrown out here in nevada, and they said the clients they had who tried that had exactly the same response from the judge, and threw out that amount.
When it comes to the eviction process I think the way you charge, and the amount you charge is going vary in each local market.
Well our ohio PM company manages 2000 units and it works for them. maybe NV is different, or your PM is an idiot?
Rent is due by the 3rd. After that, I charge a per day fee up to the total amount. So if it's $35 late fee, it would be $5 on the 4th, $10 on the 5th, $30 on the 9th, & $35 on the 10th.
My logic behind it is, if you charge $35 fee on the 4th, they won't be as motivated to pay you until they get the $.
Holy smokes, $50-$75 in late fees? I need to change my contract!
I do charge a late fee if the rent is not received by the 5th of the month. Rather than one set fee for all of my properties, I set the late fee at 5% of a particular property's rent (so, for instance, $50 late fee for a property with $1000 rent). That way it is proportional to the rent and the income of the tenants.
An example of how I teach the tenant, that I can't be taken advantage of:
Last year, I purchased a SF, had it repaired, cleaned, etc.
The applicant wanted to move in, on the 15th of the month. (An emergency move, which I verified, caused by the Landlord.)
I told them, One months rent, plus one months security, before I would give them the keys. On the first of the month, 1/2 of the months rent was due.
They were told to deposit all funds in a Bank account that I created for that property.
On the Fifth of the month, the 1/2 rent was NOT in the account.
I called and emailed the tenant, and within 24 hours, they called me back.
I informed them, that I was ready to start an eviction, because the 1/2 month was not in that account.
They stated that they had $$$ problems, caused by moving.
They stated that they would have the $$$ in the account, in a few days.
I informed them, that they now had to pay an additional $50, because they were late.
A few days later, the 1/2 months rent, plus the $50., was in the account.
The same tenant was late with the January rent, another $50 late fee.
The Bank charges you a late fee if your payment is not made on time,
I treat the tenant the same way.
If a very good tenant has a good reason and makes arrangements in advance, I will occasionally not charge the late fee. I appreciate good communication and rewarding it reinforces it.
I post the pay or quit on the first day the law allows and start evictions on the first day I am permitted to do so. Just the pay or quit has always done the job for me.
However, no tenant gets more than 2 pay or quits. I use month to month and if a tenant has to be bullied to get him to pay, I kick him out and replace him with someone who can afford the rent.