Late Fees and Tenant Laws

[Jeremy Seely]

I recently took ownership of some multifamily property in the Salem/Keizer area. I have been told that late fees can in practice be virtually unenforceable in Oregon because of the Landlord/Tenant laws in the state. 

On one hand, ORS 90.392 (sec. 2a) clearly states that failure to pay a late fee IS grounds for lease termination, as does ORS 90.630 (sec. 1(e)A)

On the other hand, ORS 90.260 (sec. 6) states that (emphasis mine):

To me that seems to indicate that, once you give the tenant a notice of termination due to not paying rent, the tenant can fix the problem simply by paying the overdue rent. That doesn't cure the nonpayment of late fee, so you still have cause for termination.

However, if the landlord decides to proceed with termination on that basis alone, the tenant has at minimum 38 days before being evicted (can't give notice earlier than 8 days after due date + you must give 30 days notice) which means there's virtually no chance you're getting a rent check for the next month's rent. Because it's so costly to the landlord to terminate based on nonpayment of late fees alone, a "savvy" tenant can get away with paying late rent and no late fee, knowing the chances of them actually being evicted are low.

To my thinking, if I've got a tenant intentionally trying to game me like that, I want to get rid of them anyway even if it costs me another month in lost rent. But I'm curious--what has been your experience with late fees, and how do you deal with your late fee policies in light of these laws?

[Mike Nuss]

@Jeremy Seely

If you're concerned about late fees while not getting rent, your priorities are not in align with your bottom line. From time to time tenants will be late on rent, if they're quality tenants they'll happily pay the late fees and move on. If your tenant is gaming you on late fees, they should never have been your tenants in the first place.  @Michell P. is correct. I have yet to hear a landlord complain about not getting their late fees. If they're not getting their late fees, their complaints are much more than just the late fees. 

My $0.02.