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  1. #1
    tattypaddy Guest

    Question Can a landlord charge l/fee if not documented in rental agreement???

    What is the name of your state? California
  2. #2
    I AM ALWAYS LIABLE is offline Senior Member
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    My response:

    We're not going to play "20 Questions" with you.

    Describe your exact situation, and the type of fee in question.

    IAAL
  3. #3
    HomeGuru is offline Senior Member
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    I give the writer only 1 point for getting the name of the state right.
  4. #4
    tattypaddy Guest

    Angry late fees

    My rental agreement says NOTHING about any late fees. It does however, state "each payment of $1100.00 payable monthly on the first day of each month in advance".

    My check went out in the mail yesterday, by fault of my own, and the owner is now trying to insist that there will be a 5% of the $1100.00 fee assessed for my lateness. She is also insisting that if I do not pay this amount, it will be deducted from my security deposit.

    Can this landlord actually charge me fees that were not agreed upon at lease signing by both parties? Or from my deposit.

    Anyhelp would be appreciated to stop the harassing emails and phone calls.

    We are in the state of California

    Thank you
  5. #5
    I AM ALWAYS LIABLE is offline Senior Member
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    Jan 2000
    Location
    Los Angeles, California
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    My response:

    Late fees charged as interest on overdue accounts (apparently, past due rent included) do not risk violating the state usury law, which limits interest payable "for any loan or forbearance of any money" (Ca Const. Art. XV, 1). [See generally, Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 801-802, 35 Cal.Rptr.2d 418, 425-426]

    Reason: The rental of property is akin to the "transfer of property in a thing for a price in money"; as such, a late fee assessed on overdue rent does not involve payment for a "loan" (the delivery of a sum of money under a contract to return an equivalent amount at some future time) or a "forbearance of money" (the giving of further time for payment of a debt or an agreement not to enforce a claim at its due date). [See Southwest Concrete Products v. Gosh Const. Corp. (1990) 51 Cal.3d 701, 704, 274 Cal.Rptr. 404, 406]

    However, if your landlord wishes to take advantage of this position, your landlord should have made sure that the rental agreement clearly specified the accrual date for the late fee. The agreement should also clearly provide that accrual of the late fee obligation will not permit you, the tenant, to defer payment over time - - i.e., that the tenant has an immediate obligation under the rental agreement to pay both the rent and the late fee.

    Unless the agreement specifies the interest rate, interest accrues at the rate of 10% "per annum" after the breach (the particular nonpayment) AND NOT 5% of that month's rent! [Ca Civil 3289(b) (applicable to contracts entered into after 1/1/86)] But, again, it MUST BE specified as a late fee on overdue rent. If it is specified, the interest charges - - no matter the rate - - do not risk violating the state usury law.

    To be chargeable to you, the landlord HAD to have placed the following, or similar, clauses in your lease - -

    "Interest on Late Payments. Any installment of rent due under this Lease, or any other sum not paid to Landlord, on the date due hereunder, shall bear interest at a rate (the "Default Rate") equal to the lesser of (a) the maximum rate allowed by applicable law or (b) five percent (5%) per annum in excess of the reference or prime rate announced from time to time by Bank of America, NA, from the date due and payable until the same shall have been fully paid as additional rent, but the payment of such interest shall not excuse or cure any default by Tenant under this Lease."

    "Late Charges. Tenant hereby acknowledges that the late payment by Tenant to Landlord of rent or any other sum due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs may include, but are not limited to, administrative, processing and accounting charges, and late charges which may be imposed on Landlord by the terms of any ground lease, mortgage or trust deed covering the Premises. Accordingly, if any installment of rent, or any other sum due from Tenant, shall not be received by Landlord within ten (10) days after the date due under this Lease, then Tenant shall pay to Landlord, in addition to the interest provided above, a late charge in the amount of ten (10) cents for each one dollar due as additional rent. The parties agree that such late charges represents a fair and reasonable estimate of the cost Landlord will incur by reason of late payment by Tenant. Acceptance of such late charge by Landlord shall in no event constitute a waiver of Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of its other rights or remedies hereunder. Any late charge shall be deemed additional rent and collection thereof shall be in addition to all of Landlord's other rights and remedies hereunder or at law or in equity and shall not be construed as liquidated damages or as limiting Landlord's remedies in any manner. Any payments of any kind returned for insufficient funds will be subject to an additional handling charge of Twenty Dollars ($20.00)."


    Sizable "late charges" against delinquent tenants might be unenforceable as invalid liquidated damages (Ca Civil 1671). However, no known reported decision has expressly decided this issue. [See Garrett v. Coast & Southern Fed'l Sav. & Loan Ass'n (1973) 9 Cal.3d 731, 739-740, 108 Cal.Rptr. 845, 850-851 (residential loan late payment charge). Nonpayment of a "late fee" charged as interest on overdue rent may be the subject of a Ca Civ Pro 1161(3) three-day notice if the lease specifies the late fee obligation as an independent covenant.

    A landlord's collection of unlawful security and/or unlawful retention of a security deposit upon a tenant's vacancy (e.g., claiming security to be a "nonrefundable fee") constitutes an "unfair business act or practice" remediable under the Unfair Competition Law ("UCL," Ca Bus & Prof 17200 et seq.).

    Residential rental "security" is defined by the Code as "any payment, fee, deposit or charge, including, but not limited to, an advance payment of rent, used or to be used for any purpose, including, but not limited to . . ." (Ca Civil 1950.5(b)):

    Compensation to the landlord for the tenant's default in payment of rent (Ca Civil 1950.5(b)(1));

    Repairing damage to the premises (exclusive of ordinary wear and tear) caused by the tenant or by the tenant's guests or licensees (Ca Civil 1950.5(b)(2));

    Cleaning the premises upon termination of the tenancy (Ca Civil 1950.5(b)(3));

    If the rental agreement expressly so provides, remedying future tenant defaults in an obligation to restore, replace or return personal property or appurtenances (exclusive of ordinary wear and tear) (Ca Civil 1950.5(b) (4)).

    Therefore, a landlord shall not subtract "late fees" from a "security deposit."

    So, let's summarize - -

    To be effective, late or interest fees MUST be included in the lease. If not in the lease, it cannot be charged. Late fees must be no greater than 10% "per annum" - - not 5% "per month."

    Do yourself a favor - - to obtain further information, go into the "legal" section of Barnes & Noble bookstore and buy a "Landlord-Tenant" book. Know your complete rights under the law, and stop being used as a doormat by your landlord.

    IAAL

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