Late rent versus grace period? What exactly is the GRACE period?

[CaliCat]

What is the name of your state? CA

I now have a question I felt secure with until I just read a post-on our lease we are given a 5-day-grace period. After that, we are charged $25 daily for late rent. Well, one day a few months ago we did not have all the rent on the 1st, but would on the 5th. I called to ask my landlord if this is okay, and talked to his wofe, the landlady. She said it's fine, that we aren't late until 5 days past the 1st anyway. Now I'm concerned about whether that is really considered a late. I get my disability on the 5th of the month and SSI the 3rd. We pay our rent always by the 5th as the landlady assured us we are not actually late until the 6th anyway.

So my question is this-by using the grace period, will that harm our rental history? Both landlord and lady are fine getting the rent by the 5th. We have never once paid past that, always on or before.

 

[kcdogg]

this is from the following web site

http://www.caltenantlaw.com/Res-Law.htm

Late Fees and Grace Periods

This is an area of landlord-tenant law which most judges now understand to be different for residential tenants. A late fee is typically a flat amount or percentage of the rent that the landlord intends to charge if you don't pay the rent by a given date. Late fees are built into many contracts to encourage timely payment, but the Legislature recently amended the law to prohibit late fees in residential rental agreements. The law does not punish the landlord for trying to steal it from you.

Late fees are legally described as "liquidated damages provisions", meaning that an arbitrary amount is chosen as the penalty for breaching a particular promise in the contract - in this case, to pay the rent by the given date. Civil Code Section 1671 provides that a residential rental agreement cannot contain a liquidated damages provision unless it is impossible, or extremely difficult to calculate the exact damages suffered by the breach. If it does, the late fee clause is void and of no legal effect, just like a nonrefundable security deposit clause. Interest, in the range of 30 cents per day, is permissible, however, if the contract so provides.

Landlords will try to justify the late fee by describing the time it takes to make extra calculations, trips to the bank, phone calls, and other varying time spent due to a single late payment. Of course this is contrived, and the reality is that the management company gets the same amount of money irrespective of any late payment, and any additional work is negligible. The stronger argument is that Civil Code Section 3302 says that the damages for failure to pay an amount is the amount itself, plus interest at the legal rate [1/3650th of the amount per day - about 20 cents]. Therefore, the amount incurred from late payment is not difficult to ascertain; the law defines it.

That's the legal argument. You might want to print it out, in case you have to convince the landlord or judge of your position, and you can use it for reference.

Tactically, you face decisions on when and how to confront the issue. You can sign a lease with the late fee provision, and you haven't waived your rights by doing so, since the late fee provision is illegal and void. When faced with the demand, you can pay it under protest, or describe the money as an advance payment of rent, and avoid the immediate hassle. At a later date, if you are evicted for nonpayment of rent, your prior late fee overpayment has to be given credit, and the 3-day notice is thereby made invalid for demanding more rent than was due [ie, it demands a month, but you only owe a month minus that earlier late fee payment]. You win the case on a technicality, or at least get a great bargaining position for a settlement on terms favorable to you. If you're strapped for cash now and can't pay even the current rent, hope that you get the eviction notice that asks for the rent plus the late fee. The scenario is the same, except that you don't have to apply past overpayments for credit; the notice is invalid on its face.

There is no official "grace period" for rent payments in the law. Rental agreements typically say that if the rent is not paid by the 5th, a late fee is due. Again, since the late fee is itself illegal, threatening to do an illegal act on a given date does not help the landlord's case. Functionally, the law provides a type of grace period. If rent is due on the first, the landlord cannot give you a 3-day notice to pay rent or quit until the 2nd. The 2nd is day "zero" of the 3-day notice, so that the last day to pay and satisfy that 3-day notice comes out to be the 5th of the month. If that third day also falls on a legal holiday or weekend, your last day is extended until the next banking day, which can be as late as the 9th.

If your paycheck comes at a time which makes payment on the first difficult, you might suggest to the landlord that you increase your security deposit by a month's rent, so that you'll actually being paying a month in advance of the current one. That is, you would pay April some time in March, but think of it as March rent, even if you paid it March 15th. It would still be early. Interest lost on that money is nothing compared to the hassle you save and the tactical advantage you create for yourself by doing that, at a time when you may need it

 

[jlw1000]

KCDogg:

You did not answer the question. You just spouted off with your pro-tenant (pro deadbeat) stance.

Calicat:

If anyone were to call the landlord for a reference, she may state that you have been late every month. Technically you have been. The rent is due on the first, and paying after that date is considered late. When I give a reference I tell the truth, and if a tenant is chronically late I do not hide the fact. I do "soften" the report by stating it is always paid within the grace period. There are some landlords that are not able to accept the fact that most tenants use the grace period every month, and do not wish to rent to such tenants. I would leave myself open to a lawsuit if I lied to a fellow landlord (plus it would be dishonest to do so).

Since your landlord accepts that this is when you are able to pay rent, they may view it as paying on time. You can ask the landlord what type of reference she would give you. If I have a tenant that always pays within the grace period & takes reasonable care of the property I consider them to be very good tenants. (But that may be because I have had some tenants from hell.)

 

[kcdogg]

actually, i didn't spout off anything, i merely copied and pasted the late fee and posted the link and read about late fees. Now if you read my post again, i think you'll see that, well at least i hope you do.

Too bad if you think I'm pro tenant or what i posted is. But i'd rather be pro tenant than a slumlord.

 

[CA. Landlady]

Cali:

Sometimes we must go along in order to get along. As jwl, suggested it may be in your best interest to pay the late fee if and when you are late.

The late fee is typically a deterent so people will pay their rent as agreed. I do not know of any creditors who do not charge a late fee as well. Landlords do not give as much grace period as a mortgage company would simply because you do not have as much invested in a rental as one would in a home they are purchasing.

At this point, I regret supplying KC, a tenant with Mr. Carlson's website. What he copied and posted may influence others and it would not be in some folks best interest to travel down this road with a landlord. Indeed, if you did not pay as agreed before the 6th and if after the 6th did not pay the late fee, I too would not give a pleasant rental reference. You would be viewed as trouble to other landlords who call.

 

[CaliCat]

Oh, we've never once paid after the 5th-that's not the problem. My concern is if the grace period is considered a late period with no fees or if the actual due date is the 5th and phrased to sound like the 1st to basically ensure that the tenent pays "on time." My parents' landlord considers the real due date for them to be the 5th, but they always pay by the 1st anyway. Does this make sense?

 

[jlw1000]

Calicat:

I know you have never incurred the late fee. Each landlord is different. I consider payment by the 5th as on time, but I know other landlords that do not. When I have to give a reference on a tenant I am very detailed in my response (i.e. they paid so many times by the first, so many by the fifth, and so many after the 5th). This way the prospective landlord can make up their own mind. It is best to ask your landlord what type of reference you would get.

KCDawg:

Your advice was outrageous. (Plus you did not answer the question.) I checked into your claim that late fees have been banned by the federal government on residential leases. I called my local government & spoke to the department that adminsters the landlord-tenant code. They said there is not a federal ban on late fees, and that the current code allows a late fee of 5% of the rental payment. It is not a form or robbery. The tenant not paying rent is the one committing robbery.

Your advice is poor at best, and destructive at worse. If someone were to follow your advice they could end up being evicted. Their credit would be marred. Then they could end up homeless, because no other landlord would rent to such a lout.

C.A. Landlady:

You lay down with dawgs, you wake up with fleas. lol.

 

[kcdogg]

jwl is this what you're referring to?
"Legislature recently amended the law to prohibit late fees in residential rental agreements"

I believe that the quote above refers to legislature as in state not federal. So I claimed nothing about a federal ban on late fees, but merely copied and pasted that section. As with info supplied it is always best to read the sorce which is why i posted it.
As far as the question, I would ask the landlord if they will or will not give a good referral!


Calady, sorry you feel that way!



KCDOGG

 

[kcdogg]

Cali:



At this point, I regret supplying KC, a tenant with Mr. Carlson's website. What he copied and posted may influence others and it would not be in some folks best interest to travel down this road with a landlord. Indeed, if you did not pay as agreed before the 6th and if after the 6th did not pay the late fee, I too would not give a pleasant rental reference. You would be viewed as trouble to other landlords who call.

I would have found it eventually! BTW, just for the record I always try to pay my rent on time and if I can't, I make arrangements to pay it on a certain date. This only occurs when paydays don't fall on or around the 1st. It is best to ask and if it is not okay then get overdraft protection and pay the bank 20 bucks as opposed to paying the landlord 50 bucks. My last landlord would receive my check on time and would not cash it until the 6th or 7th. Rarely was it cashed the day after.

 

[CaliCat]

Our landlord goes to the same bank we do, about a mile away (BofA) and cashes rent the same day he gets it. No leway there. When I had my old account a few towns away, we had a few days before the check arrived at my old bank and cleared.

 

[kcdogg]

I've never had a problem in arranging paying on a later date as long as I cleared it with the manager or landlord. I get paid every two weeks so it does conflict with the 1st on some occassions. I liked the suggestion from the site I posted, in which you increase your deposit os try to pay one month in advance. Although that could put a strain on ones pocket book who don't have the option to raise their income with a thirty day notice.


kcdogg (aka pro deadbeat...uh protenant!)

 

[jlw1000]

KC:

There's this practice called budgeting, maybe you've heard of it? Many people budget their money, & plan ahead so that their housing payment is paid on time (i.e. rent or mortgage) no matter when their payday falls. Living paycheck to paycheck is just not smart, if something were to go wrong you'd get behind very quickly. For those with mortgages they may be able to work something out with the bank (if they have paid well all along), but a renter will have more difficulty working things out. A landlord can not afford to be understanding anymore, there are too many professional deadbeats out there. Not to mention potential lawsuits if all tenants are not treated the same by the same landlord. So a landlord must take a tough stance against deliquent rental payments. It's called self preservation and they are protecting their investment.

 

[CA. Landlady]

>>>You lay down with dawgs, you wake up with fleas. lol.<<<

Another one of your typical vile comments and evidence of just how much you hate the world, ALL tenants in it and anyone who should assist a resident. Once again, it's no wonder you have such a difficult time with your rentals. There's not really that many "deadbeats" there's just some self righteous landlords who do not have a cule as to how to manage people.

KC:

Perhaps it would be best to simply refer folks to the website and a particular area of the website? See how some lost pups will read it and think it's something that it's not as in a federal law? They take it out of context. Plus, some things Attorney Carlson has to say is a way to promote business and not necessarily on one's best interest to act upon without an attorney. I must say I did get a kick out of how she started researching federal statutes. Funny! Don't feel alone she has a habit of passing judgement on people and name calling. You know, it's what hateful people do.

 

[jlw1000]

CA Landlady:

Sorry sweetrheart, but honorable landlords do not like a "landlord" that turns on their own. I have shown your tenant friendly comments to other landlords I know, and they are just as disgusted with you as I am.

I have known some pretty good landlords that have been totally screwed by deadbeat tenants. One man & his family lost their home, because he was forced by our legal system to support a deadbeat tenant. Another landlord had to declare BK in order to save his home for his family. Yet another committed suicide leaving behind a small child and pregnant wife. These are all extreme cases, but I understand what they were going through and feel for them. All there problems stemmed for dishonest, deadbeat tenants and the scum that helped them lie, cheat, and steal.

In my case I had one truly awful tenant, & no amount of reasoning with her worked. I was not the only person to have difficulties with the scum at that time. She also stole furniture from a rent to own company, stiffed the utility companies, stole from neighbors, and later was fired from her employer for stealing. I remember how I TRIED to work with her, and the mediation people thought I offered way more then the average landlord just to be rid of her, but she still would not budge. She took special pleasure in screwing people over.

I have worked with all my tenants, and done way more for them then the average LL. But as usual you just want to bash other LL's. I have one tenant that I lent a large sum of $$ to, because I realized he was a good guy & needed to consolidate all of his debts to get back on track. He has been paying the rent & paying on the loan. He was not someone I knew before renting to him, but was a good tenant for 2 years before falling on hard times.

I have another set of tenants that have purchased their own home and are moving. Their settlement did not coincide with the 1st of the month, so they are moving b the 7th of August. They are required by the lease t pay for the full month wether they are there are not. They explained that finances are tight and only want to pay for the week. I understand their situation, and agreed this would be fine. Does this sound like a LL that does not work with her tenants?

I have MANY examples of how I work with the tenants, but with someone that so obviously DESPISES landlord's I think it would be fruitless to reason with you.

 

[CA. Landlady]

>>>I have MANY examples of how I work with the tenants, but with someone that so obviously DESPISES landlord's I think it would be fruitless to reason with you.<<<

Presumptive and baseless as usual.

I believe in both the landlords and tenants playing by the rule of law. You seem to think there are national rules of law rather then state specifics. You also, more times than not are quick to brow beat people for their questions, financial situation, and/or their familial status that OFFENDS YOU. Do you really believe your comments are "honorable"?

BTW, have you also shown your pals the nasty comments you dish out to people for ABSOLUTELY NO reason whatsoever? If anything you serve to enrage the tenants more rather than accomplish your mission of getting them to accept your ideas of how to be a good tenant.