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  1. #1
    Join Date
    Feb 2016
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    Default Can a Landlord Charge a Fee on an Outstanding Balance of Late Fees

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

    The issue: My landlord uses a third party online payment process. The payment does not post immediately and will most likely post after the 5th day if you don't pay it on the first. Due to this, I racked up a good amount of late fees (which the office failed to notify me about). I just kept paying my rent like normal. An unrelated issue came up and they then let me know that my account has not had a zero balance in months and basically threatened eviction. They said they were being nice by not evicting me for the outstanding balance. I asked for a ledger and I see that they charged the late fees for the months it didn't post in time (that's another question for another time), but each subsequent month, they charged another late fee for the total outstanding balance. Is this legal in the state of North Carolina? I know the law states "A late fee under subsection (a) of this section may be imposed only one time for each late rental payment." But, does that apply to an outstanding balance?

  2. #2
    Join Date
    Mar 2013
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    18,340

    Default Re: Can My Landlord Charge a Fee on an Outstanding Balance of Late Fees

    Let's say your rent is $500 and the late fee is $25.

    Your rent of $500 posted on 1/6 at which time you owed $525 including the late fee but you only paid $500.

    Your rent of $500 posted on 2/3 at which time $25 went for the previous late fee and $475 was applied to your rent. Since you did not pay your rent in full, it was late and you incurred another $25 late fee.

    I could go on with an example for ensuing months but it should be clear to you by now that the late fee WAS charged "only one time for each late rental payment."

    What you need to do is get your rent up to date and pay it far enough in advance so it gets posted before the 5th.

    Or, do you have some documentary evidence to show that you PAID on the due date. If you can prove that you PAID, then the posting date become irrelevant.

    By the way, if your rent is due on the 1st of the month, and there is no grace period, then it's late on the 2d regardless of when the posting date is.

    When you pay online I suggest you start taking screen shots of the transaction but start making the payment a day or two ahead of the due date.

  3. #3
    Join Date
    Feb 2016
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    5

    Default Re: Can My Landlord Charge a Fee on an Outstanding Balance of Late Fees

    That scenario you provided is illegal in North Carolina. They aren't allowed to deduct a late fee from rent causing the next months rent to be late if the balance is not paid in full. Like I said, that online payment thing is another question for another time. Its even advertised on the lease for us to use. I've have them recorded saying that they can see when the payment is made, even though it hasn't posted to their bank. Recently, I've been paying an extra 9.95 "handling fee" for expedited posting just to make sure its there on time. I'm working on paying this down, like I said, I had no idea I even had a balance until we had an unrelated issue and they threatened me because I guess I touched a nerve.

  4. #4
    Join Date
    Sep 2005
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    Default Re: Can My Landlord Charge a Fee on an Outstanding Balance of Late Fees

    Quote Quoting AceHole
    View Post
    My landlord uses a third party online payment process.
    Is this a service that your landlord requires you to use, or is this a service that you have the option of using as a tenant? Do you have a separate contract with this service?

    For example, if this is not simply a rent processing service, but is a separately contracted service that effectively guarantees your rent payment to the landlord, it could constitute some form of financing contract as opposed to the simple payment of rent. I don't think that's particularly likely, but these days I come across all sorts of odd systems and schemes.
    Quote Quoting AceHole
    The payment does not post immediately and will most likely post after the 5th day if you don't pay it on the first.
    That doesn't make sense. How are you making payments, why don't they post immediately, and what did the company say when you asked them why they're not processing your payments in a timely manner? If your landlord requires that all rent payments come through this service, what did your landlord say when you objected to paying late fees for rent that you had in fact paid on time?
    Quote Quoting AceHole
    Due to this, I racked up a good amount of late fees (which the office failed to notify me about).
    What office? You don't see any information about your balance when using this payment system?
    Quote Quoting AceHole
    I asked for a ledger and I see that they charged the late fees for the months it didn't post in time (that's another question for another time), but each subsequent month, they charged another late fee for the total outstanding balance.
    Are you stating that you caught up on your rent, but then next month they charged you an additional late fee even though your rent for that subsequent month was paid on time? That once you incurred a late fee, they assessed another late fee each month whether or not your rent was current? Something else?

    Assuming that all this service does is process rent for your landlord, if the new late fee is being assessed solely on the basis of unpaid prior late fees, that would contradict the plain language of NCGS Sec. 42-46(b).
    Quote Quoting AceHole
    View Post
    I've have them recorded saying that they can see when the payment is made, even though it hasn't posted to their bank.
    If the problem is that you're making a payment in a way that prevents them from being certain that they've received the money for several days after you 'pay' it, I suggest finding a better way to pay the money. There has to be a way to make payments that are completed on time without your having to pay an expediting fee.

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