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Author Topic: late fees  (Read 16239 times)

Offline patat335

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late fees
« on: February 23, 2007, 12:36:42 pm »
Hi everyone

I have been putting in my lease that after the fifth of the month there will be a 150.00 fee for being late, then a 150.00 a day fee until paid in full, is this legal the rent's are about 1200.00



thanks

Offline PaulBroni

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Re: late fees
« Reply #1 on: February 23, 2007, 12:45:40 pm »
Every jurisdiction has its own laws and regulations, but my instincts are, "Good luck with that!"

If you assess that hefty a penalty and then have to go to L&T court to collect, the judge is going to release the hounds of Hell on you.


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Offline Rich_in_CT

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Re: late fees
« Reply #2 on: February 23, 2007, 03:01:51 pm »
That may violate the laws in quite a few states.  That's 12.5% PER DAY!!!!   If you went to court to evict this tenant you'd be lucky to not get charged with something yourself plus end up with a tossed out eviction.  I would definitely not shy away from late fees if they are legal but I think yours would scare off many good tenants.

Offline StartupMode

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Re: late fees
« Reply #3 on: February 23, 2007, 03:13:09 pm »
Uh ya... you're setting yourself up for having your entire lease agreement thrown out of court.  I'm not even your resident and I'm a little offended at such a high number.  What is the purpose of such a stiff penalty anyway?  If they couldn't make the 1st 1200 on time, what makes you think they would be able to pay more than double the rent if they were two weeks late?



 :shocked

Offline SAHM Investor

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Re: late fees
« Reply #4 on: February 23, 2007, 03:23:25 pm »
I thought I was strict.   We say rent is due on the 1st.  Everyday that it is late is 10.00 per day up to the 15th.  If not paid by the 15th they agree in the lease that it's an automatic termination of the lease and they agree to be out by the 30th of the month.   
We also have a clause that states that they agree to pay any and all fees associated with collecting a debt, including court costs and potential collection agency fees.

Offline Rich_in_CT

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Re: late fees
« Reply #5 on: February 23, 2007, 03:26:41 pm »
Quote
Everyday that it is late is 10.00 per day up to the 15th.  If not paid by the 15th they agree in the lease that it's an automatic termination of the lease and they agree to be out by the 30th of the month.   
Is that legal and enforcable?  Have you had that hold up in court?  What state are you in?  If they do leave by the 30th do you go after them for the rent plus late fees or do you just let them go and be happy that you didn't have to go through a formal eviction?  Do your tenants typically abide by that when they fail to pay?

Offline SAHM Investor

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Re: late fees
« Reply #6 on: February 23, 2007, 03:49:39 pm »
We are in MN.  We have had a lawyer look over our lease and said it is all legal.  We actually got that idea from some other property owners we met.  They have had that for quite a while on their lease and they actually have enforced it.  They said they didn't even have to go thru the eviction process, they just took a copy of the lease to the sheriff and was able to have them removed from the property since they had signed and agreed to it..  It is even in very bold print on the agreement.   They then went after them for the rent and 150.00 total late fee.  If it was not collected they turned it over to a collections agency and the tenants were responsible for the fees due to the agency as well.     We have not yet had to enforce any sort of eviction.     
It does seem to make a huge difference.  The tentants we have on the old lease are always late.  It was only a 25.00 fine after the 10th of the month.  All tenants we have since the new lease are either on time or if they have a problem that month they are on the phone on the 1st making arrangements with me as to how much they can pay and on what date they will have the rest.   It's  not perfect, but much better that what we did have!

Offline tworent

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Re: late fees
« Reply #7 on: February 23, 2007, 04:29:21 pm »
I have two different options depending on the credit score

1 Good credit 5% of rent and 5 dollars a day
2 not so good credit 10% of rent and 10 dollars a day


The idea of them calling to make arrangements on how much they can pay is a bad idea they pay 100% or get out. :bs

At 900 hundred a week you are setting them up to fail I think that is WRONG.  :anon

At 150 dollars you will evict a good tenant just because he had a bad month  :banghead


Offline propertymanager

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Re: late fees
« Reply #8 on: February 23, 2007, 05:50:42 pm »
There was more b.s. on this thread than I've seen in a long time.

SAHM,

Quote
We are in MN.  We have had a lawyer look over our lease and said it is all legal.  We actually got that idea from some other property owners we met.  They have had that for quite a while on their lease and they actually have enforced it.  They said they didn't even have to go thru the eviction process, they just took a copy of the lease to the sheriff and was able to have them removed from the property since they had signed and agreed to it..  It is even in very bold print on the agreementIt only took me 1 minute to do a google search of the MN tenant-landlord laws.
 

Your lease is NONSENSE.  You can not kick someone out in Minnesota without winning an unlawful detainer action in court and having a writ of removal from a judge.  It only took me 1 minute to find that out by looking up the Minnesota Tenant Landlord Law on the web.  I strongly suggest that you do the same.  Ignorance of the law is no excuse in court.  I suggest that you take your responsibility a little more seriously before you get run over by a savvy tenant.  You can even be charged with a criminal offense for violating your duty as a landlord in the People's Republic of MN!


Patat,

You didn't say what state you are in, but I am relatively certain that you can not charge $150 and $150 per day!  That just won't fly in any state that I know of!  You also better get better educated before you pay the price for your ignorance. 

Many landlords go out of business because they don't know how to deal with tenants.  You two are on the fast track.

Mike


« Last Edit: February 23, 2007, 07:07:57 pm by propertymanager »
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Offline henryinma

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Re: late fees
« Reply #9 on: February 23, 2007, 06:06:38 pm »
You guys are all spoiled. We have to deal with the fact you can't charge a late fee until the rent is more than 30 days late. On top of that you can't give a discount for early payment of rent disguised as a late fee.

If you did violate those laws, and went to court, you could be sued for triple damages plus attorney and court costs.

Another book I read said that one way to get people to pay on time is to offer a discount after a year if their rent was paid on time for the whole year. They were doing 10% off the first year, 25% the second year and the 3rd year the month was free. He did have it set up so that the rent went up 3-4% every year. I do tend not to raise the rent every year so I guess if you do it up front, the discount doesn't hurt that much. Not sure how well this would work in my state as I can't see that you could consider it a late penalty fee.

Speak of high rent fees, I did see one provision I liked which was the rent doubling at the end of the lease if they didn't sign a new lease. Gives the tenant a nice incentive to sign a new lease, I've had a few that tended to drag their feet on that.

Realtor/Rental Property Owner
Boston, MA

Offline tworent

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Re: late fees
« Reply #10 on: February 23, 2007, 06:39:13 pm »
Propertymanger Back up please I agree with you 150 dollars is nuts maybe I did not make my self clear 10% of 600 dollars is 60 and 5 % is 30 I would not let a person with bad credit stay in a unit I charge 1200 for and 5% is only 60 bucks with a 5 day grace period.

Hope this helps sorry for the misunderstanding :beer

Offline propertymanager

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Re: late fees
« Reply #11 on: February 23, 2007, 07:06:57 pm »
tworent,

Sorry!  I put your name in my post, when patat was the one who said he did $150 + $150.  My mistake and sorry again for not getting it right.  I'll change my original post.

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline patat335

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Re: late fees
« Reply #12 on: February 26, 2007, 09:33:52 am »
Hi Everyone

alright so if the 150.00 a day is to high , how do you go about charging late fees, on my lease this has save me from doing alot of evactions because i say that i can charge them but i never do because this get them out when they see how much they would owe me, by the way i would never charge anyone this who is a good tenant and is only late once or twice. the state i live in is FL

so may ? is how would you charge a late fee on 1200.00 rent
along with using scare tactats so if need the tenant leaves quitly.

Thanks everyone

Offline Rich_in_CT

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Re: late fees
« Reply #13 on: February 26, 2007, 09:35:53 am »
by the way i would never charge anyone this who is a good tenant and is only late once or twice.
So you are going to pick and choose who the lease applies to?  GOOD FREAKIN' LUCK BUDDY! 

Offline propertymanager

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Re: late fees
« Reply #14 on: February 26, 2007, 10:13:33 am »
patat,

I realize that you are brand new at this, but you are on the fast track to failure.  Sorry for being so blunt, that that is the truth.  You don't understand the law in your state and you are violating the basics of being a good landlord. 

The headline in our local paper today was "Local Landlord Sued by Civil Rights Commission".  That is what happens when you treat people unequally.  Rich is absolutely right, if you want to stay in the rental business, you can't treat one tenant one way and another tenant another way.

You need a lease that is LEGAL and enforceable in your state.   Then, you need to enforce your lease.  You can bluff a small percentage of non-paying tenants into leaving, but most know the law (clearly better than you do) and they will force you to evict them.  When you get to court and the judge determines that your lease is crap and that you're allowing some tenants to pay late (but not this one), YOUR'E IN BIG TROUBLE!    If you're lucky, your eviction will be laughed out of court and you'll get to start over.  If you're not lucky, the tenant's free legal aid lawyer will press charges against you and your short real estate career will be over.

I'm going to give the landlord from the headlines a call today.  Their days as real estate investors are OVER!   I'm guessing that they will do ANYTHING to get rid of their rental!!!  Free apartment building anyone?

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

 




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