Building the perfect lease

[TimC]

As my recent tenants have not worked out so well, I would like some help in compiling the perfect lease. Fair to both parties, too. If you have suggestions or clauses in your leases that you like, I am sure we could all benefit from them.

One major source of pain for me has been the late fee for the rent. I made the mistake of making it $30.00 if the rent is paid after the 5th of the month. The downside is that it does not matter of the rent is paid on the 6th or the 26th, I am only getting $30.00, so there is no incentive for the tenant to hurry up and pay me. Therefore one of the lessons I have learned is to make the late fee $30.00 PLUS $10.00 per day.

I have also decided to provide the tenant with stamped, addressed envelopes, thus eliminating one of the excuses in being able to pay me.

I have also informed my tenants that I accept PayPal, which allows me to accept credit cards over the internet with no fee. This eliminates one more excuse on their part, and they can use credit (if they have any) rather than cash.

Who is going to go next??

 

[LisaS]

my landlord has us pay a $25 late fee if our rent is paid past the 5th day of the month. Our lease states that if we are late for three consecutive months they can terminate our lease and have us evicted. That seems to work good for him so I would give it a shot.

 

[LL]

REgarding building of the perfect lease, I am pretty happy with mine, and continually evolving it after many years.

Regarding your idea of charging a late payment fee of $30 plus $10/day, in California that would be illegal. All fees charged to tenants have to have a basis in costs to the landlord. How would you justify the $10/day in necessary expenses to you, because the tenant paid late?

I recently raised my late payment charge to $45 from $25. I rarely invoke it, however, because who wants a tenant who chronically pays late?

My rules are diffferent, of course, for tenants that I trust and who have some legitimate reason that the rent was not paid on time. I have one tenant who has called me from Alaska several times, to explain that he has gone fishing, he forget to sent the check before he left, please wait, etc. He has been a tenant for 8 years, without problems. I don't take tenants whose financial situation shows difficulty in paying rent.

I give a 3 day grace period, serve a 3-day notice to Pay Rent or Quit on the 4th day, I will file for an unlawful detainer eviction on the 8th if the rent wasn't paid and tenants are still there. The $45 late payment fee covers my cost in serving the 3-day notice, and my lease allows deduction of that fee, if unpaid, from the Security Deposit (although I don't need that in the lease in CA).

Tenants get to know what the consequences are of failure to pay on time. I don't keep tenants who cannot pay.