Standard Late Fee Rental Agreement

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If you are a tenant and are currently having problems with your rents, the best way to proceed is to be honest with your landlord or manager. By communicating about rental issues, you can get an agreement that works for both of you. While waiving late fees can be a friendly gesture for a tenant, this simple act can also have unfortunate side effects: some states require that you charge no more than a certain percentage of the monthly rent as a late fee. For example, in Maine, you can`t charge more than 4% of the rent as a late fee. You may decide to give tenants a window of opportunity to pay the rent without penalty. If rent is due on the first of the month, but you offer tenants an additional five days, any rent that has not been received before the fifth of the month is considered late. Lawyer James Laughlin told ezLandlordFroms: “Courts generally find that late fees of 5% or less (the monthly rent) are reasonable, but that doesn`t apply down the line.” The rule of thumb is that landlords should consult an additional period of at least five days before the rental term and never charge more than 10% of the rent as a late fee (to err on the side of caution, calculate 5%). In other cases, tenants may not be aware that their late payments may affect your business. It`s always good to explain to them the importance for you to pay the rent on time. According to James Laughlin, who specializes in the real estate rental industry, a general fee of 5% of the monthly rent of the courts is considered reasonable. In addition, landlords are expected to consult at least five days of “grace period” before taking into account the delay in rent.

Be sure to record any late payments and make a copy available to your tenant. This not only holds you and your tenant responsible, but can also be used as a reference if there is a need for an evacuation. If the reasons for late payment of rent are legitimate, there is no need to introduce late charges, as you can agree to change the due date of the rent. Suppose you have a tenant whose lease states that rent is due on the first of the month and a $25 penalty is imposed after the rent is paid in a timely manner. If you added an additional 3 days to your lease, the tenant would have until the fourth of the month to deposit the payment without any penalty being charged. If you plan an additional 5 days, you can collect a late rental fee on the sixth of the month. If you find that a pattern in your tenant`s rents is constantly late, talk to them about it with them..