Calculating Late Fees - Start of Business or Close of Business after 5th

[Rema W.]

I have a quick question about how you're calculating late fees.  (Each morning after the 5th or COB after the 5th?)

In my lease, Rent is due on the 1st, and I assess a $5 per day late fee for any rent that is received after greater of 5 days.  

Do you wait until the close of business to assess the per day late?  

Or do you assess the late fee on the morning of every day after the 5th? 

For example on the morning of the 6th, I would assess a per-day late fee. And the same on the 7th. 

Or would you wait until the COB of the 6th to assess the per-day late fee? 

[Nathan Gesner]

Quote from @Rema W.:

You decide.

My state requires three days grace period. Rent is due on the 1st, then three days of grace. If not received by 11:59PM on the 4th day of the month, a late fee is automatically assessed, period. It's not waiverable, period. And when rent is late, I only accept the full payment (rent+late fees) and only in certified funds (money order, cashiers check, cash, ACH) because I don't want to spend another week waiting for a check to clear (or bounce).

You are creating additional confusion with your "$5 per day" late fee. First off, it's too small for anyone to care. They get an extra four days and it only costs $20? Second, do you charge $5 for the day they bring you the payment at 7PM?

I recommend a one-time charge at a higher rate. Mine is 5% of the rent or $50, whichever is greater. That's $50 on a $700 apartment or $100 on a $2,000 house.

I also recommend you have a deadline for the next step. If they still haven't paid everything owed by the 10th day of the month, then I'm starting the eviction process on the 11th. Don't let late payments sit forever.