All Forum Posts by: Account Closed

My wife PM's all our properties and she used to believe that. 

I prefer to align myself with the prosperity of my tenants. If they are prospering my rent is more likely to get paid. Threatening evictions is not consonant with that philosophy.

We had a major disagreement about a tenant who was late in the first few months of their tenancy. She wanted to issue an eviction notice, I told her not to. My will prevailed, we went round to the house and worked with the tenant. In the 9 months since he hasn't been late.

So there is another way.

That's $35 - $45 USD. 

If you set your late fee as a % you will have difficulty persuading a court that it costs double for you to be made whole on late rent of Unit A than it would Unit B because Unit A's rent is twice as much.

If your late fee is a flat amount below bank charges as you mentioned then even in a jurisdiction where no such provision is on the local statute books contract law is on your side.  The legality of such bank charges has been tested at supreme court levels and found to be consonant with the doctrine of making the bank whole for the contractual breach. 

Note that dishonoured payment fees are not pro-rated to the amount in default.

AFAIAC we are on the same page.

Legality aside if  I were to condone late fees which I do not, I would consider it good commercial sense to let the PM  keep them. Nobody likes working for a cheapskate and whether you actually are or not the people you hire will act on their perceptions.

What would be interesting for a landlord like me would be if the PM wanted to levy a late fee  as it would be contrary to my policy of having them in the contract but not levying them.

From the legal standpoint. I don't think contract law helps you because the typical late fee  exceeds what you need to be made whole from the breach. The debt you service with the rent payments isn't your tenants problem, nor is it his responsibility to keep your bank account from going into the red.

 The thing you are referring to as BS is part of  a document published by the UK Office of Fair Trading entitled Guidance on Unfair Terms in Tenancy Agreements. If you were to read all 127 pages (...hmmm... I wonder why it has to be that long)

https://www.gov.uk/government/uploads/system/uploa...

...... you might notice quite a few commonalities. This  shouldn't be  surprise, I would imagine the same sort of consumer protections are deemed necessary either side of the Atlantic.

Of course it is not binding in any US jurisdiction but it is probably more persuasive than anything you can muster to the contrary. It would not be an outrageous result if a savvy enough  tenant prevailed, which is why it would not be something I would ever enforce or want tested in court.

@Account Closed

There's not a cat in hells chance of persuading a court that as a landlord you were under pressure to sign any sort of contract except possibly as a borrower vs a financial institution.

In general Landlords are far more likely to be perpetrators than victims of things that are deemed to be unfair clauses. AAMOF based on legislation in other jurisdictions the legality of the sort of late fee clauses most have in their leases is highly questionable.

In the UK for example  http://www.propertylawuk.net/residentialucta.html the following is cited as an unfair term

• impose potentially excessive penalties on tenants for failure to meet the terms of the contract e.g. by charging excessive rates of interest on late payments of rent

I like the chances of the tenant that argues that  the late fee should be construed as interest and that the 5% a month many landlords have in their leases is unlawfully usurious (multiply that by 4 if they were only a week late). 

Further that  the remedy for contractual breach is for the landlord to be made whole and it didn't cost him or his PM 5% of the rent to send the letter demanding payment of the late rent. Additionally and in the alternative it was unnecessary for the landlord and/or his agent to make a house call to procure payment and the tenant is not liable for consequent costs arising.

 If receiving the rent late causes a landlord financial hardship while you may think that merits sympathy a court is entitled to conclude that's a consequence of having  an under capitalised business model. It's a legit defence for the tenant to say you are in hardship because of your financial habits not their late payment and you are now inviting the court to scrutinize how you conduct your financial affairs.

Personally not only would I not be going there, but I wouldn't ever try to enforce the late fee clauses I have in my leases. 

Don't think there's a cat in hells chance of that.

That sort of thing only tends to happen where the parties are of unequal status and is usually there to protect the "weaker" party. 

Further I think a court could be very easily persuaded that the late fee is not a potentiial  extra income stream for the landlord. Rather it's to cover the extra administrative hassle and expense caused by late payment and that those costs are primarily incurred by the PM. 

 We search criminal records by name and date of birth and do it ourselves, if your screening company can't do that - I'd change them.

An SSN stands for Social Security Number. An ITIN is a tax identification number. These numbers are issued by the Dept of Social Security and the Internal Revenue Service to facilitate an individuals transactions with government agencies. They were not created for the purpose of facilitating private commerce even though they are misused in that way, so landlords should bear in mind that they have no legitimate business demanding either of these numbers. 

If I were the OP I'd be focusing my attention  on the what is going to happen to the rent due in 17 or so days rather than sweating a late fee.

We don't consider it constructive to invoke our late fee clauses and have never done so. Our preference is  to work with the tenant to get them back on track.