Fees for late rent payments can be charged as flat fees, or between 5 and 10% of the tenants’ monthly rental rate.
Landlords can only impose penalties, in accordance with the terms of a lease agreement.
If the lease agreement, does not include clauses that mention late fees, landlords cannot demand penalties for overdue rent payments.
Check your local laws for acceptable late fee charges, as there is a maximum amount that can be charged each month.
Whether it is charged as a flat fee or a percentage of rent, late fees should never exceed more than 10% per month and really should only be passed on to the tenant, if you are being charged a dishonor fee by the bank.
The lease agreement should outline all the terms related to rent payments, including a policy regarding late rent fees.
A high quality agreement should include:
- The monthly rent amount
- The due date of the monthly rent
- A policy if the due date falls on a holiday or weekend
- Where and how the tenant should pay the rent
- A grace period before the rent is considered late
- How will the tenant be charged and how much if the rent is late
- What happens if the tenant doesn’t pay at all
- Tenancy termination details
RealRenta Landlords can create another ledger for payments that are not rent, like late rent fees, water charges etc.
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