Late Fees/Bounced Check Fees

I would like to know what the maxium late fee (per day) and the maxium returned check fee is in the State of New Jersey.

Thank you.

Jesa24

whatever is in your lease....

djdj:

While I appreciate your honesty, I am a new landlord in New Jersey and do not want to put something into a lease which is not legal. I'm almost positive that there is a maximum limit on what you can charge. Any input on this matter would be appreciated.

Thank you.

You have to look in your local law, both state and municipal.

It is not true that you can put anything you want in your lease. You can put it in, but it may not be enforceable. The law takes precedence over your lease, plus there may be limits that judges impose.

why not be resonable say 3-5% or $25 late fee after the 5th ot 7th day, just like you mortgage company does.

Remember people get paid evry two weeks, then there are hoildays at the beginning of the month, and sometimes checks dont clear at the bank for 2-3 days...ya gotta be reasonabe, if you want to keep tenants.

And bounced check whatever you bank charges you.....and YOU CANNOT demand the tenant pay YOUR late fees or penalties if you dont pay your mortgage on time....

WHY...because you are supposed to be responsible and have money in the rental account to cover such emergencies.

Thank you both LL and djdj for your advice. I have decided on a $10.00 per day late fee (after the 5th of the month, of course) and a $45.00 returned check fee, which is the total cost of what my bank fees would be in that scenario. I'm sure you both understand that I have to cover myself at all ends but reamin within a legal range. Again, thank you both for your assistance.

Jesa24

Are you allowed in NJ to make the late fee on a per day basis?

LL:

I hope so, it seems to be the best incentive for a tenant to pay their rent on time. I put a call in to an attorney that I used to work for. I'm just hoping he gets back to me soon.

Jesa24

I Live in WA State, I'm no attorney, but I've had rentals for years. Here's my advise.
When you go to court, you don't want the Judge to think you are anything but fair -- so don't be too gready. For a bounced check charge, look at what a business around the area charges. Around here it's $25.00.
For a late fee: If you say the late daily fee starts on the 5th, that's when you'll get the rent. If you have a straight late fee and no daily charge, once late the tenant will drag payment out until the 25th. I learned this early.

My late fee is only $5.00 per day (say on an $800 rental) but it starts on the 3rd. So by the time you get your first $10 on the 5th, I've gotten $15 and the tenant is required to pay $30 legal fee" and I getting ready to evict.

My lease says: If mailed, the postmark date is considered the day of payment. No payment is to be mailed after the 3rd, but then paid in person. My lease explains that on the 5th a "3 Day Pay or Move" notice is sent out.
Actually I may give a call first, or wait it an extra day just in case the mail is late.
This pushes tenant to get it in the mail by midnight the 3rd or be required to drive across town to pay in person.
It's in my lease that the tenant pays this legal serving fee ($30). You need to get the eviction started early because an eviction takes time. If they have not paid by the 5th, you've got problems. Start the process!
Based on this, if it looks like I'll be in court, in the final deposit accounting, I limit my late fee to 10 percent of the rent. Anything more than that in my opinion looks unfair -- but I don't tell this to the tenants - just in the final accounting before I go to court.

[Edited by archarrell on 02-10-2001 at 08:12 PM]

Hmmmmmm Arch:

Wow you are starting to sound like a fair and decent landlord, allowing for emergencies and unplanned events..

Here in civilized New York City after 5 days is minimum to charge a late fee, because its NOT the mail thats important, its how many people get paid twice a month, or if a holiday is at the beginning of the month such as New years, 4th of July, labor day, most banks wont clear a check thats deposited over the weekend till the 5th or 6th. And what if you dont have overdraft checking? Then its a bounced check.
OR if you get direct deposit and they only deposit one week and not two.....sometimes things happen, and to demand payment on the 1st or the 3rd is simply rediculous.

Being resonable is the key to keeping long term tenants....and if the tenant has proof is a mistake, OR has a family emergency and the paycheck is at the office, and hasnt been deposited OR tells you not to cash the check till the 6th or 7th...well what are you going to do ...evict them for not having the money clear fast enough over a holiday weekend...

thats being retarded.......in my book

PS...that did happen to me many years ago, family emergency on the 30th, and paid on the 31st,paycheck at the office.. got back on the 11th with an eviction notice even though the LL had my parents phone # .... he never called.......I won in court..

[Edited by djdj on 02-10-2001 at 10:48 PM]

Dear Archarrell and djdj:

I based the bounced check fee on 2 things, (1) the average of what the local businesses charge, and (2) what my bank fees total.

As for the late fee, I give my tenants until the 5th of the month to pay without penalty because we all live in the same building. My tenants hand deliver the rent to me, (which I might add, is quite nice)and therefore the mail is not something I need to take into consideration. As for bi-weekly pay periods, vacations, holidays, and other things of that nature, in my opinion, are things the tenant needs to take into consideration when planning their budget (just as I do as a landlord since mortgage companies do not take these things into consideration). Of course, if there was an emergency, then I am prepared to be understanding.

By no means do I intend to be unreasonable. I treat my tenants with respect and understanding, and I expect to be treated the same.

I thank you again for your advice. It really helps me understand my place in the landlord/tenant game a bit more!

Jesa24

I hope it all works out for you, and yes i do agree giving a tenant till the 5th should never be a problem in paying the rent....

I just wonder how cruel some of these landlords are if they dont have the rent on the 1st and your SS or disability check doesnt come till the 3rd?

And your bank doesnt care about your excuses, so you should ALWAYS have at least 1 and preferably 2 or 3 months morgage in the rental account, so YOU will never have to pay the mortgage late. Thats your responsiblity as a landlord.

It really is a matter of trust and honesty, we all have to get along, once you break that trust then rules are rules.

I hope if and when the time comes that you will be able to put your foot down, and demand the rent, or start eviction proceedings.

Good luck..

[Edited by djdj on 02-13-2001 at 01:30 AM]

djdj, could you be more of a sarcastic bitch please?

Neither djdj nor the originator of this thread seem to think that state law in important in their discussions.

I don't know anything about NJ or WA state law, but in California, all fees must be related to the cost to the landlord. Thus, a late fee which increases as time goes on is illegal, not matter what the intent of the late fee. Late fees are not intended to be a profit center to the landlord (Archarrel says, " by the time you get your first $10 on the 5th, I've gotten $15 ") and not a punishment for not paying on time (incentive), but merely a reimbursement for expense caused by the late payment. Tenants wo pay late are entitled to a warning (3-day notice) and can then be evicted.

djdj

About starting the late charge on the 3rd. I do use the post mark date on the envelope and naturally if there's a weekend or holiday there, I give allowances.

I do try to be fair, but my legal folks (and I believe I've followed advise of Bob Bruss, the real estate gru,) say to start the process early as not only will I need to pay legal fees, but during the time period it takes to get them out, I will lose at least a months rent(which is my income).

You see, at 69 years of age, and a wounded Vietnam Vet, I'm the one who's drawing disability and Soc Security. My tenants are all young strong folks with jobs!

It's not always as it seems!







[Edited by archarrell on 02-14-2001 at 07:47 PM]