Aw gosh! I think I jinxed things when I said our tenant is doing well now... property manager sent an email last night saying he was informed that the rent would be late this month. He also told the tenant to add the late fee but I hope it's not a trend starting again. He used to get in ruts for months at a time, but I thought we were past that. Come to think of it, there wasn't even an excuse this time... just that it would be paid by the 25th. Which means Feb will be due just a week later... oh this cant be good. :-( On one hand, we get $125 extra every time it's late... on the other hand, it usually indicates the start of another "round" with the tenant's cash flow problems. Nothing to do but see how it plays out, I guess. Evicting, although the property manager would handle it, is something I never wanted to be forced to do.
Having owned and rented properties out in the past, I have always included a late payment charge in the contract but I've rarely enforced it. When it comes to a person renting out a property, at the end of the day keeping a roof over their head is a persons main priority so anytime a payment as been late, they HAVE had a valid reason. Any late payment I will ask for a reason and if I feel it wasn't in their control, their wages not being paid on time or even an unexpected expense as come up then I'm always willing to wave the late payment fee as long as I'm satisfied that the reason is genuine.
As a landlord, it's not something that I've done before but I would consider having it in place, though it would definitely depend on the relationship with the tenant. Don't forget that landlords also have obligations and cash flow considerations, so by not paying on time it can impact them as well. I think if it's put in the contract up front, the tenant should abide by the rules unless they make specific arrangements with the landlord. It's meant to be a deterrent anyway.
Maybe your tenants aren't the same as ours, but if we'd accept the "paycheck was late" or "had a bill I wasn't expecting" excuses, it would be a high temptation for the tenant to just use that every time they didn't pay. I could not confirm these things, so it would have basically turned me into a sucker... and the few times I *did* fall for it burned me because then it just kept coming up every time the rent was going to be late. All that to say that I've found it easier if everyone knows from the beginning that they're going to be paying a late fee. I wouldn't want to get into trying to decide whether or not the "unexpected bill" was genuinely more important than the rent. Plus like Onionman said, we have our own bills that the rent from tenants is going to be helping to pay... so it's a spiral I don't want to enter into.
It does in a way make people not want to be late, but like you said, people have good reasons for being late in the first place. So then tacking on extra fees because you're late doesn't make sense to do. I don't know of anyone that would be late just because they're lazy and didn't get it in on time.
I'm not sure why you say it wouldn't make sense to implement late fees, nissi. Landlords generally use the money they pull in from rentals to pay their own bills, so you're saying that a landlord should pay his or her own bills late just because a tenant had "a good reason" for not paying their own rent? Maybe I just missed what you meant. Why doesn't it make sense to be a good businessperson? And also, I'm not sure it would be a matter of being "lazy" but often rather more like "well, I'm not going to get zapped with a late fee... and I know the rent is due tomorrow, but I think I'll go buy this really awesome new smart phone tonight." Or "Rent can wait, there's no penalty... I'm going to throw the mother of all parties this weekend!" It's more likely a matter of lack of a sense of responsibility than laziness.
Quite. A rental contract is a contract. So long as the landlord allows automated online payment there is no good reason for paying late and late fees are 100% okay. If the tenant has a genuine unforeseeable emergency they need to clear that with the landlord at the very first opportunity, not just fail to pay on the agreed day. The landlord is not a proxy overdraft system for the tenant.
I guess this issue boils down to the relationship of the tenant and the landlord. Although there are landlords who are very strict to the point of being inhuman, late rental fees will apply when the tenant has clear the intention of delaying the rental payment. But this is debatable since the tenant can always give hundreds of alibis to contest the late payment fee.
I am sure there are people who just don't care but I agree with you. I think for the most part if a person is late they have a just reason for it. Perhaps there was a mix up in their pay, a sudden death in the family that they had to travel away for, lost their job, whatever the reason. Not everybody has extra money saved for emergencies situations. A lot of people live pay check to pay check. Most landlords I have had experience with are very understanding about situations and most time the people are going to be paying within a week from the time the rent is due. I think most people don't have the attitude I will just have a party instead of paying my rent. Most people are more responsible then that.
Here in Ontario, Canada late rental fee's are 100% illegal. Laws here are setup to heavily favour the renter and not the landlord. Best a landlord can do is start the paperwork on an eviction, even if just to scare the renter into paying up because a few months missed rent and then they run away, can really hurt the landlord who might need that money for the mortgage.
