All Forum Posts by: Mark Husband-Wood

Saw this late fee statement on a commercial rent invoice and wondering what it means.

"Late fees: 10% late fee or $300 assessed if this invoice is not paid in full by the 5th of the month."

To me this is not clear if the tenant will be hit with a late fee of 10% or a late fee of $300 dollars.  Am I missing something?

Thanks!

 Mr. Gesner, I totally agree with your conflicting information statement.  One source I found stated the late fee to be 1.5% of the monthly rent, and another stated it to be 10%, and yet another stated 5%.  None of the sources were clear as to these being commercial or residential guidelines.  Very confusing.

Appreciate the information on the legal guide.  I will certainly look into it.

Thanks!!

Thank you!  Appreciate your time and expertise.

Thank you for the push in the right direction.  So, for MD, this seems to fall under usury law, which makes sense.  From various searches I have found the following:
 
"A lease agreement in Maryland must disclose the amount, conditions, and timing of the late fee. The fee cannot be interest, a finance charge, liquidated damages, or a penalty. A late fee in Maryland cannot exceed $5 or up to 10% of the monthly rate, whichever is higher, and no more than three (3) late fees may be charged in a single amount. The grace period is fifteen (15) days. Also, when the late fee is listed in the lease agreement, the text mentioning the amount has to be bolded."

Also:

"The issue of how much you can charge as a late rent penalty depends on local and state legislation. Whether you choose to charge a flat fee for every day that the rent is late, or whether you charge a set percentage of the rental amount, there is a maximum amount that you are allowed to charge every month. According to most courts, this amount needs to be kept reasonable, which means less than 10 percent per month.

Generally speaking, as a landlord, you will need to give your tenant about five days' grace before considering the rent payment late. While the courts will stipulate that you charge no more than 10 percent per month, the general advice is to use caution and charge only five percent.

The laws about payment of late fees also stipulate when you can implement these fees. In some states, a landlord may charge this fee on the first day after rent was due. In other states, a grace period is necessary, and such fees can only be charged at the end of this grace period."


I've been trying to find a definitive ruling on the subject for MD, but it seems there are just general usury guidelines that a landlord SHOULD follow. Would I be correct in thinking of it that way?

Thanks!!

Is anyone familiar with late fee laws in Maryland for a commercial property?

Flat fee, percentage, maximum amount, how many months can the late fee continue to be applied, etc.

Thanks in advance!

Quote from @Richard F.:

What is your proof that it was changed prior to signatures being affixed? You have none, so again it will be up to the Judge. If all involved parties admit that it was changed with their knowledge and acceptance, then it will likely stand. If one party states they "knew nothing about it", likely it will fail.

 Excellent observation, thank you.  

Thank you Richard and Heath!

Appreciate your time!

Roger that, understood and appreciated.  One more question/thought and I will put this hypothetical to rest. :)

What if the aforementioned change was done BEFORE the initial acceptance and signing of the lease, not after the lease was signed?

Tenant read the entire lease (including the change) and signed the lease.  

Does this count as acknowledging the change? in lieu of having to initial/sign/date the change?

Probably still up to a judge I'm sure.  

Thanks!!

Wonderful.  Thank you, I appreciate your time and expertise.  

Follow up scenario.  What if a minor correction is made as you described: a small section is lined out, and the changed text is added above/below.  

BUT, neither party initials/signs/dates, etc.

Does the change assume any authority?

Thanks!

I understand that it is best to write the lease as intended in the first place.  But, let's assume that's not possible.

If something in a lease needs to be changed/modified, what is the best way to do so?  

Cross out the portion you want to change, and hand write the desired words?  Then sign/initial and date the change?

Does the tenant also have to sign/initial and date the change to signify agreement?

Thanks!