Rent Grace Period and Late Rent Fee

[Ruel K.]

Hi there. I just wanted to get some feedback before I email the tenant about the rent being late. It is the first time that my tenant is late for her rent. Rent is due on the first and I have a 5-day grace period so the 6th day is when rent should be paid and if rent is received after the 6th day, that is why I charge the late fee. She made a check deposit on July 5 and I just found out today that the check bounced.  Per our lease agreement, a late fee is charged for each additional day that the rent remains unpaid. So, I will start counting on July 7 for unpaid rent because that is after the grace period. Any feedback would be appreciated. Thanks.

[Nathan Gesner]

I think you're shooting yourself in the foot by being wishy-washy about the rent due date.

Rent is due on the 1st.

Grace period of five days.

Late fee charged on the 6th.

You say, "The 6th day is when rent should be paid."

No, rent should be paid "on or before the first day of each month" and the 6th day is the day the late fee is charged. Rent is due on the first. Always. If you tell your tenants anything different, you are training them to pay late.

You require rent on the first. You graciously excuse the late fee for five days. That grace period is for the late fee, not for rent.

Consider changing your policy so that you only accept checks if received on or before the 1st. Any payments after the first must be in cash, money order, or cashiers check so you know the funds are good. It can sometimes take a week to find out a check has bounced so that would put you in the middle of the month. It's best practice to require "certified" funds any time the payment is late, which is any day after the first.