Establishing ?Late Pay? and ?Late Fee? Policies
As with other policies, these should be distributed to tenants in writing and enforced consistently for renters to avoid discrimination and fairness concerns.
Including late pay and late fee policies in the lease agreement ensures clear communication and may be helpful if a dispute should arise. In some states, such as California, failing to write the late fee provision into the lease may prevent the rental manager or landlord from legally charging a fee. Laws may also forbid landlords from setting unreasonable late fees or using them to penalize tenants.
Rent control ordinances and local laws in some areas may even limit late fees or prohibit them altogether.
Fees may be a specific dollar amount, a percentage, or a combination of the two. For example, tenants might be charged 10 percent for missing their due date, then an additional $10 per day until the payment is made. Alternatively, they might only be charged the 10 percent, or have a flat fee of $50.
Property owners should also ensure that any grace period they allow meets and legal requirements, and that tenants understand its length clearly. Some landlords, mindful of residents' financial circumstances, choose to negotiate different due dates for rent based on tenants' pay schedules. For example, older tenants might need time for Social Security to arrive rather than paying on the first of the month.
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