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  1. #1
    hhutch13 is offline Junior Member
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    Reasonable Late Fees

    What is the name of your state? Florida

    I was hoping that someone knew what a reasonable late fee charge would be in Florida. I'm currently the landlord of two rental properties and on the lease, I've implemented a late charge of 5% of the rental payment on the 1st day, and $10.00 each additional day until rental payment is received. Rent is due on the 1st and they have a grace period through the 5th to pay without penalty. I was telling a friend of mine who happens to be an attorney about one of my tenants that I'm having problems with and he seemed to think that my late charges were extremely high. I thought the whole point of late charges were to "make a lasting impression" so it wasn't happening continuously? I'm not in the business of lending so I would prefer timely payment over late fees any day. Just hoping someone had some inside views!

    Thanks for your help.
  2. #2
    BelizeBreeze is offline Senior Member
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    Read and learn.

    The Florida Landlord Tenant Act does not address late charges or late fees charge by a landlord to a tenant for late rent. No limitations are put on the landlord in charging these amounts. A typical lease will have a specific amount due as a late fee/charge if rent is not paid by a specific date, usually the 5th of the month. Additionally, to encourage the payment of rent, many leases have per day charges ranging from $5-$10 on average. Are these fees/charges illegal? If the rent is $1000, the late fee/charge if paid after the 5th is $50 and there is a $10 per day late charge, at the end of a month, if the rent were not paid, the tenant would owe $1300. If the rent was not paid for a year (which would be absurd) the tenant would owe a total of $3600 making the per annum interest rate on late rent 360%. In the first month alone, the interest on the late rent would amount to 30%. As you can see, the per diem amount is causing the problem. Florida usury laws look to what the effective annualized interest rate will be, so the capped interest rate for an entire year is 18%.


    Florida statutes 687.03 "Unlawful rates of interest" defined; proviso.-- (1) Except as provided herein, it shall be usury and unlawful for any person, or for any agent, officer, or other representative of any person, to reserve, charge, or take for any loan, advance of money, line of credit, forbearance to enforce the collection of any sum of money, or other obligation a rate of interest greater than the equivalent of 18 percent per annum simple interest, either directly or indirectly, by way of commission for advances, discounts, or exchange, or by any contract, contrivance, or device whatever whereby the debtor is required or obligated to pay a sum of money greater than the actual principal sum received, together with interest at the rate of the equivalent of 18 percent per annum simple interest.
  3. #3
    hhutch13 is offline Junior Member
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    Reasonable Late Fees

    Thank you for the quick response. I was aware that Florida did not have a cap but was just concerned if this issue got legal that a judge might find my late fee excessive.

    Last Question: If my tenant is paying the rent payment late each month about 4 days each time, as long as the late fees do not total more than $3348.00 if the rental payment is $1550.00, then I should be okay if this matter were to turn into a legal issue?
  4. #4
    BelizeBreeze is offline Senior Member
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    Quote Originally Posted by hhutch13 View Post
    Thank you for the quick response. I was aware that Florida did not have a cap but was just concerned if this issue got legal that a judge might find my late fee excessive.

    Last Question: If my tenant is paying the rent payment late each month about 4 days each time, as long as the late fees do not total more than $3348.00 if the rental payment is $1550.00, then I should be okay if this matter were to turn into a legal issue?
    I can't answer your question because one, it would be representation and I am not your attorney and, two, I don't know what a judge would do in your particular circumstance.

    as a landlord, you need a specific policy regarding late fees, INCLUDING eviction if not paid by a certain date. If you are planning on being a landlord, then have your own attorney. It's a legitimate business expense and just plain smart.
  5. #5
    johnd is offline Member
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    To augment Belize's answers: I do not know Florida Law, but typically, interest is capped so as to avoid usury, whereas, additional rents and late fees are not capped. While it is subjective to decide what is excessive and what is not, the standard is what most reasonable people would agree upon (in a lawsuit, the standard is what a reasonable judge would decide in that particular circumstance). Therefore, if it seems excessive to you as a landlord...it probably is excessive. The real test is does it seem excessive to you as the payor?
  6. #6
    Cvillecpm is offline Senior Member
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    Wink

    There are 2 schools of thought on Late Fees....

    If you want the fees as additional revenue OR if you want them to make your tenants pay their rent on time....

    If you want the first scenario - then make it a FIXED amount and be very specific on HOW to pay the rent and WHEN it is late. I provide 13 size#6 SAE with each lease which directs rent to my post office box and if it is not there on the 6th, they get a notice to pay or quit with the late fee AND a notice fee which for 2 people adds $300 to their amount due.

    If you want the latter, do the above option AND then offer to waive the first late/notice fee in a separate letter with the caveat that if their rent is paid on time for the remainder of their lease, you will FORGIVE the late fees....THIS is your tenants' incentive to pay you first and for you to get your rent ON TIME.

    The problem is that your tenants are paying their other bills rather than paying you....you need to change this thinking FAST!!.

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