Late Fees Assesment

[Becky Rhode]

Hello all!  I have a colleague who has a tenant who is a middle-aged single female. She had currently lost her job.  She is trying from other resources to obtain the rent.  So a colleague of mine assessed her late fees. In the lease, it states "After the 5th day, you will  be charged $100 and $10 a day thereafter." She had a balance of $250 from prior late fees. So my colleague charged her an additional $30 on to[p of the $250. Now we are in NJ. She has been with him for just short of a year and hasn't been late since her job was lost. Would this be considered unreasonable? I have researched this and some say she cannot be charged an unreasonable amount, then there are some that say no more than 5% of the rent which is $1350 she cannot charged more than 5%. What is considered unreasonable in the state of New Jersey? This is actually South New Jersey. Not Newark

[Earl White]

There is no explicit case or statute that declares late fees cannot be more than 5%. That said, they must be reasonable to form the basis for an eviction and some judges have used 5% as practice.

"In establishing tenants' rights to continued occupancy of their rental dwellings the Anti-Eviction Act is remedial legislation deserving of liberal construction. A.P. Dev. Corp. v. Band, supra, 113 N.J. at 506; Royal Assocs. v. Concannon, 200 N.J. Super. 84, 93 (App.Div.1985); Cima v. Elliott, 224 N.J. Super. 436 (Law Div.1988). Contra Terhune Courts v. Sgambati, 163 N.J. Super. 218, 223 (Dist.Ct.1978), aff'd o.b., 170 N.J. Super. 477 (App.Div.1979), certif. den., 84 N.J. 418 (1980). We find that the clear purpose and spirit of the Anti-Eviction Act -- to ensure that evictions are based on "reasonable grounds" -- require the conclusion that where late payment or nonpayment of rent is the direct result of an unreasonable lease change of the kind impliedly barred by N.J.S.A. 2A:18-61.1(i), such late payment or nonpayment will not furnish good cause for eviction under N.J.S.A. 2A:18-61.1. See R & D Realty v. Shields, 196 N.J. Super. 212, 220 (Law Div.1984) (nonpayment-of-rent action dismissed because based on unreasonable lease change).Tenants deserving the protection of the statute's requirement that lease changes be reasonable cannot be put at a disadvantage because a landlord chooses to bring, in some alternative form (here, a charge of nonpayment of rent), a claim that follows from a tenant's refusal to accept a lease change."

https://law.justia.com/cases/new-jersey/supreme-court/1989/1...