Collect Late Fee Or Not?
I have some tenants in a duplex. They have been in the unit for about nine months and have always paid their rent. Our lease states that rent is due on the 1st and is late on the 4th and subject to a late fee. They have paid their rent on or after the 4th twice. The 1st time they did it, I sent them a letter reminding them about the lease terms and told them I would waive the late fee if they paid the next two months BEFORE the 1st of the month.
They didn't meet the terms of the waiver and have now been late again. Should I charge them the late fee or should I call them up to find out how best to work things out. The late fee is not large (I think it's $35), and I'm more interested in having good tenants. Apart from these occasional lates, they have been stellar tenants and have given me absolutely no trouble. I should add that I never had to remind them to pay or go after them for the rent, they still paid, just after the 4th.
I've read that it's important to collect the late fee as a symbolic gesture. Anyone had any experience where it backfires and generates bad blood with the tenants?
Thanks for all insight?
JS
You might try talking with the tenants to see if a different payment schedule would be a better fit. Sometimes, when paid every other Friday, payday just comes on the 5th or 6th day of the month.
You don't say how late the tenants pay, but imply that they are always within a day or two after the fourth day. If this is the case, then you might consider modifying your late fee assessment time to accommodate the timing of your tenant's income stream.
I would rather work something out with a good, responsible tenant than get the extra $35 once in awhile.
I don't want to sound like a harda$$, but why have late fees if you're not going to enforce them? These people read the terms of the lease. They understood the penalty for not paying on time. But when they violated the lease you caved. I know that you're just trying to be nice and build positive relations with the tenants. But I've found that the overwhelming majority of responsible people have no issues with paying on time because they don't take on debts they can't handle. And people who are less responsible don't need you being nice to them. What they need is a firm hand. Once you've had a tenant for years who has always been a good tenant, who has done some good things around the house, and who has basically gone out of their way to make you value them as a tenant, then that is someone who you might consider giving a break to now and then. But when a tenant is new, the last thing you need is for them to start thinking you're a doormat. Enforce the late fees and make sure they understand your goal isn't to get late fees, it to get the rent on time. Oh, and make sure your late fees are the absolute maximum they can possibly be. That'll reinforce your position about wanting the rent rather than the late fee, but will make the wait more worthwhile if you're forced to go through it. Good luck and happy New Year.
I agree 100% with AlexLev. Tenants want to see what they can get away with. You may have a problem later on if you guys end up in court and yuo have to admit that you were selective about enforcing some of the things in your lease rather than others. Again, what AlexLev said to have the highest late fee possible is good because you need to be paid for your inconvenience.
GL
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