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  1. #1
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    Jul 2018
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    Default Can Landlord Collect on Cumulative Late Fees for Late Rent Payment

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

    We've had a tenant for the past 3 years and they have paid late pretty much every single month, and refuse to pay the late fee. Now they have moved out, would I be able to get a collections agency to go after the cumulative late fees?

    Would appreciate any advice. Thanks.

  2. #2
    Join Date
    Mar 2013
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    18,340

    Default Re: Can Landlord Collect on Cumulative Late Fees for Late Rent Payment

    Quote Quoting Mcdz
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    We've had a tenant for the past 3 years and they have paid late pretty much every single month, and refuse to pay the late fee. Now they have moved out, would I be able to get a collections agency to go after the cumulative late fees?
    Frankly, I don't think you are entitled to the any of the late fees anymore.

    By failing to enforce the late fee the first time it was incurred, you waived it and any subsequent late fees that you failed to enforce,, especially after letting it slide for three years.

    The way you're supposed to do it is serve your "pay or quit" notice as soon as the rent is late, showing the total rent + late charge, then refuse any payment that isn't for the total amount, and then evict for non-payment.

    Had you done that once you probably would have cured the tenant of paying late or would have gotten rid of him.

    If you don't learn to jump on tenants hard, you need to get out of the landlord business because you will just keep getting burned.

  3. #3
    Join Date
    Jul 2018
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    9

    Default Re: Can Landlord Collect on Cumulative Late Fees for Late Rent Payment

    Thanks for the feedback adjusterjack. I am learning slowly but surely about landlording. The next tenants we will definitely be more strict. However, in California, when you serve a pay or quit you cannot include any late fees, only the rent owed.

    However, would a collection agency be able to enforce the late fees? Or is that something I would have to ask the collection agency?

  4. #4
    Join Date
    Mar 2013
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    1,279

    Default Re: Can Landlord Collect on Cumulative Late Fees for Late Rent Payment

    Mcdz,

    It sounds like you are not following good bookkeeping practices. Here's how it works when a tenant refuses to pay late fees.

    Let's say the tenant's rents is $1,000 per month with a $50 late charge if paid after the 5th of the month.

    The tenant is late in paying January's rent, incurring a $50 late charge.

    When they pay February's $1,000 rent (even if on time), but without the late fee. The first $50 is credited against the late charge. They have now paid $950 rent and are late on the remaining $50, incurring another $50 late charge. You issue them a 3 day pay or quit notice.

    When they pay March's $1,000 rent (but without the catch up), the first $50 is credited against the late charge and the next $50 is credited against last month's rent. They have now paid you $900 and are $100 late on rent. You issue another 3 day pay or quit notice.

    When they pay April's $1,000 rent, the first $50 is credited against the late charge and the next $100 is credited against last month's rent. They have now paid you $850 and are $150 late on this month's rent. You issue another 3 day pay or quit notice.

    Until they catch up, this repeats over and over so there is never more than one month's worth of outstanding late fee and everything owed you is unpaid rent.

  5. #5
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    Default Re: Can Landlord Collect on Cumulative Late Fees for Late Rent Payment

    In California, any late fee must be detailed in the lease agreement and the amount of the late fee must be reasonable. There is no statute or case law that defines a line between reasonable and unreasonable, but you should expect courts to look skeptically at any late fee that appears in any way punitive as opposed to being intended to reasonably approximate actual costs and losses associated with the late payment of rent. Also, as adjusterjack indicates, when a landlord does not enforce a lease provision for three full years of tenancy, a court is very likely to deem the provision to have been waived by the landlord.

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