Who keeps the late fee?

[Jon Potter]

In everyone's experience, if a property manager collects a late payment fee from a tenant, is that fee typically kept by the property manager? Does it go to the owner? Some kind of split? Thanks!

[Steve Rozenberg]

we used to split the late fees with our clients. However we changed our management agreements to have us retain all fees. If the company is doing their job this should not be a major issue, meaning tenants are selected correctly and they pay on time. If this is not the case then maybe they are selecting the wrong tenants.

We keep the fees because we send out certifed Mail notices, time spent contacting the resident etc.. There is employee time spent doing this to try and get the owners money. At the end of the day it is a business and there is staff time spent if they are going to track down the owners money.

But I would agree with the earlier post, make sure it is stipulated in the agreement before you sign, anything.