PM charge late fee but no reasonable reason

[Peter Sik]

After pm forwarded my case (tenant did not pay rent) to collection agency, the judgement claim balance is $7,569.33. The debtor will make $200 monthly payments until paid off.

1/3 of the $200 goes to the agency, and 2/3 goes to my account and within this 10% of 2/3 goes to PM as service fee. Simple and fair.

First month received that $200 and was distributed as above, Everybody happy.

Second month received $200 on time and PM break down that amount and claim there is $45 late fee, and all that $45 goes to PM account. Means I received less then I expected. So, I sent email asking PM why there is late fee existing? And they replied:

"Hi ,the total judgement not only includes physical damages that you had to pay initially to secure another tenant but also includes outstanding rent balance if any and late fees if any and any other charges that may have been charged against the previous tenant. The $45 is most likely a late fee.

So, as the funds are received from the Attorney, they are applied to all charges in arrears. Eventually you will receive funds less the 1/3 collection fee from the Attorney forwarded to you."

After sent them third email and finally got reply but that did not answer my question. Any idea what PM trying to do? Why not just following the distribution of the first month?

[Peter Sik]

@Adam Bartomeo thank you for your information. The agreement didn't mention about how to handling the late fee that helped by collection agency. Usually, PM take 10% of the late fee in normal circumstance. 

One thing I don't understand is the late fee is belong to landlord and PM take portion of it as service fee. PM is helping landlord collecting payment from tenant ideally. How could PM take the whole cake??

I just received second email from PM saying:

"Hi , looking at the account , there are late fees for July and August. These were some of the existing unpaid charges submitted to the Attorney and before the Judgement took place. Funds collected as the result of the collection judgement are applied beginning with the charges in arrears. Late fees are flat fee charges while the 10% will be against any unpaid rental amounts.

It appears that the actual unpaid rent has been satisfied now, this is why those funds collected were applied to the late fees next. Soon the funds collected will be paid to you less, the 1/3 Attorney fee, without the flat fees or the 10%."

After took some time of understanding this email. My question is why there were some existing unpaid charge before judgement took place? The judgement claim balance is $7,569.33 then focus on this amount, should not mention any more number. Keep it simple....