Late fee amounts? What to charge now that tenants don't seem to care about $50

[Toben B.]

When I started renting property I only charged a $20 late fee and the tenants didn't seem to care about this amount.  I changed it to $5 for every day late and this became a hassle to determine how many days late they were. I switched to a $50 late fee about 10 years ago and the tenants really tried to avoid it.   Lately it seems the tenants don't care about a $50 late fee and some will just pay $50 every month. 

Our local judge decided that any late fee above $25 is too much and will throw out the case over late fees. To avoid this most of the local apartments charge $100-$200 late fees, but in the event there is a court case with late fees, they will just drop the late fees when filing for a lawsuit for possession and back rent. 

What fee do you all charge for late fees? What is appropriate? FYI I live in a low rent area and my rents range from $575 to $1400. 

Thanks!

[Ray Hage]

I would put whatever (or near) the legal max is in your area. If tenants are always paying late, it's not fun for you to have manage that. It is a waste of time and energy for you. If the judge is not allowing late fees over $25, you're kind of stuck but you could raise the rent on that tenant significantly at the end of the lease. Here's how I feel about it "If I have to work extra, I better be getting paid" and they're making you work. If they  move out, that's fine, you'll have to get a better and more stable-incomed tenant.