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  1. #1
    Join Date
    Feb 2016
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    Question Can a Landlord Charge a Rent Late Fees and a 3-Day Notice Posting Fee

    My question involves landlord-tenant law in the State of: California

    (TL;DR at the end!)
    Hello, this question concerns the legality of late fees charged for late rent. I live in an area in Riverside county that does not have any kind of rent control. This month, the first rolled around and it simply slipped my mind to pay the rent on time, which I usually do on-line. This has never been a problem before, either with timely payment of the monthly rent, initial down-payment, or full payment of the security deposit. I've already taken steps to ensure that I do not make this mistake in the future. In any case, after 3 days (on the 4th), I received a voice mail from the property manager asking for me to call them, and a 3-day notice to pay rent or quit was affixed to my front door. The form was correctly filled out. I called the property manager, apologized for the oversight, and made on-line payment that day for the late rent ($1650). However, there is still the issue of $157.50 in late fees that they are charging me. The lease agreement included a late payment fee statement as recommended by the CAR: "Tenant acknowledges either late payment of Rent or issuance of a returned check may cause Landlord to incur costs and expenses, the exact amounts of which are extremely difficult and impractical to determine...Landlord and Tenant agree that these charges represent a fair and reasonable estimate of the costs Landlord may incur by reason of Tenant's late or NSF payment." The lease specifies that the late fee is 5% of the rent, which comes to $82.50. In addition, Addendum 2 of the lease agreement contained a line item specifying that the property management company would charge me a $75 posting fee in the event they ever served me with a notice.

    I don't feel that any of this is or should be legally valid. The intent of collecting liquidated damages, i.e. collection of late fees, is to compensate the lessor for damages suffered by my failure to pay rent on time. Also, it cannot be so high as to surpass the amount of those damages and act as a punitive measure to compel my compliance (Utility Consumers' Action Network, Inc. v. AT&T Broadband, 135 Cal. App. 4th 1023, 1029 (2006).) The language in our lease agreement notwithstanding, I think it's obvious that a) these fees are not an accurate estimation of damages, b) they are so high and onerous as to be punitive, c) the imposition of an additional posting fee is illegal on the face of it, as well as an obvious attempt to add fees that the property manager knows would not hold up in court if considered part of the late fees, and d) damages suffered by the lessor can NOT be considered difficult or impractical to determine, as California Civil Code 3302 specifies that "The detriment caused by the breach of an obligation to pay
    money only, is deemed to be the amount due by the terms of the obligation, with interest thereon."

    I am sorry for the long post, I am simply trying to convey that I have researched this thoroughly and would like substantive answers. In particular, as much of this will be down to case law and precedent, does anyone know of any recent cases and their outcomes where these issues have been discussed? If the late fees do pass muster legally, can I challenge the posting fee? How valid is my reasoning?

    TL;DR: I got slammed with a fee for 5% of my rent and a posting fee which almost doubled the amount after being 3 days late on my rent. Is this legal?

    Thank you for reading, and thank you in advance for any answers!

    Well, as it stands now, I've asked them to waive both the late fee and the posting notice, just for this one time. Explained it was a simple oversight, it'll never happen again, I'm taking good care of the owner's house and being a good tenant, yadda yadda yadda. Still waiting to hear back. If they refuse to waive it, I'll pay the two fees separately, and keep looking into this issue. I could always sue in small claims court to get the money back if I think I have a good chance of actually winning it, but more research is needed.

    Well, as it stands now, I've asked them to waive both the late fee and the posting notice, just for this one time. Explained it was a simple oversight, it'll never happen again, I'm taking good care of the owner's house and being a good tenant, yadda yadda yadda. Still waiting to hear back. If they refuse to waive it, I'll pay the two fees separately, and keep looking into this issue. I could always sue in small claims court to get the money back if I think I have a good chance of actually winning it, but more research is needed.

  2. #2
    Join Date
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    Default Re: Can a Landlord Charge a Rent Late Fees and a 3-Day Notice Posting Fee

    You can attempt to challenge the reasonableness of the liquidated damages provision, if the matter goes to court. Should that happen, you can also attempt to argue to the court that the liquidated damages provision should cover any legal fees for service of the notice, rather than being added to the late fee; or, in the alternative, that the $75 fee illustrates that your landlord is able to itemize the costs it incurs as a result of late rent and thus that a liquidated damages clause is not appropriate.

    However, unless this matter gets to court, you're in a position of negotiation with your landlord. If you end up suing your landlord and don't intend to wait, you will need to consider the possible consequences of doing so before you move out of the unit. You can also explore such options as mediation, if your landlord is willing. Here are some resources.

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