Many states do not regulate “late fees” for late rent payments. However, how much the landlord may charge a tenant for late fees should be governed by the term reasonable or fair. Although this amount is up to the landlord, generally speaking, an amount of 5% or lower would be reasonable. In addition, some landlords will impose an additional fee of $10 to $20. per day for each and every day that the rent continues to be late. If a landlord is going to charge late fees, they must spell this out in the lease agreement. As a tenant, you need to read the entire lease before signing. If you do not understand it, ask questions, or have an attorney look over the documents for you.
When does the late fee kick in:
Most landlords provide a “grace period” in the lease. Usually this is up until the fifth day after the rent is due. If the rent is due on the first, the tenant will have until the fifth of the month to pay the rent. On the next day, the late fee becomes due as well, if the rent still has not been paid. Some landlords do not provide this benefit, there is no “grace period” and the rent is due and payable in full on the first day. Be sure you understand the rental agreement policy.
If the landlord does provide a ”grace period”, you will not be billed for the late charge until that period of time has expired. Do not assume that you automatically have five days in which to not pay late fees. If a tenant is late with the rent, the landlord may serve the tenant with a “three day notice to pay rent or quit.” on the day after the rent becomes due. The landlord can bring an action for eviction. Tenants should take this matter very seriously. Paying rent on the due date is crucial in order to stay in the rental and protect your credit standing.
As stated previously, many states do not regulate late fees and late dates, but some do. It is your responsibility as a tenant or a landlord to investigate what your state regulations are in this regard.TENANT LANDLORD STATE LAW
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