Sarah,

Assuming your Late Fees are simple to calculate, your resident is just whining or an immature consumer. Every other bill has a late fee policy.

Learn this simple management phrase "We get what we allow".

My guess is you have not been charging LFs and now they are shocked with a new thing.

Your problem is a HUGE reason why every LL should be using autodraft. Check out CLEARNOW on this website.

We TAKE the money when due, not WAIT and HOPE they decide to pay us instead of someone else.

We made this simple change 25 years ago when it was a new thing. Your res probably pays their water bill, etc by autodraft.

We went from 27 late notices every month to 3 with this VERY SIMPLE change...and our residents LOVE it!

Tell them not to be late.

I think that Brad20,000 said that he meets with new tenants and video's himself going over the lease item by item, line by line and has the tenant initial the sections, especially ones that have to do with payments, how they are treated and other expectations. I might be a good idea to review the way you do things and adopt this method, just sayin'.

Another...

Your res' actions are showing you they have trouble managing their money.

Make rent easy. Put them on WEEKLY or BI-WEEKLY rent to match their pay periods. I call it PayDayPlanRent.

Calculate rent, divided by 4, add $10. Paid every Friday. Small, manageable bites each week.

This also means you get 52 weeks = 13.4 months of rent each year.

70% of our new leases choose this option, and some folks come to us for it.

With lower-income folks, I would go over it - the main parts of most "importance". Certainly not the whole thing. Definitely explain the importance of timely rent payment & consequences if it's not paid.

I finally told an 11 year tenant that I wanted her to move out because I am fed up with the excuses, drama, and promises. She didn't understand any of it of course, and can't believe I am doing this to her children right here at the holidays.

I told her it wasn't on me, it was on her!

After so many times of her account being hacked, etc., I just decided that I'd had enough. I told her I had at least 3 other people that would be tickled to death to have the unit and they would pay more and on time.

This time her Grandma was going to help her (no mention of mom or dad) but Granny didn't answer the phone when tenant was on the way to her job and now she has to wait for the bank to open Monday. That was when I just said, Stop, I can't deal with this anymore!

Sarah,

What does "increasing" mean?

More...

We must guard our "landlord greed gland". We lull ourselves into thinking we're doing great by making more money with the late fees.

That's true to a point.

BUT...

My experience is the res gets a little later each month, later, and later, until at one point they are a month behind and give up. The rent stops flowing. now we have an eviction problem with delays, damage...

It adds to my stress and extra handling time.

My business model is "paid on time" for less stress for both me and the res, and keeps the res on track.

BRAD

Check Georgia code Title 10, Commerce and Trade 10-4-217.

Current as of - March 28, 2024.

I'm not going to go read GA laws, but are you allowed to just increase late fees? NC's are spelled out in law - 5% of rent or $15, whichever is more - and no more. Charged on 5th day after rent is due. Once per month and not more often. Cannot deduct late fees from rent paid the following month - lates fees are separate charges from rent.

You cannot just decide to increase them as a punishment because you are tired of their paying late. YOU ALLOW IT, you apparently accept their money on the regular, and you are now stuck with what you allow.

Have had two different tenants who were paying late every month. I can only charge 10% total. Some tenants around here will just pay at the end of the month because it costs them the same.

I do not allow this and evict.

I spoke with both tenants and changed them to bi-weekly. They are now on track and not texting me with late pay excuses. Otherwise they are good tenants.

One of them I actually gave a non-renewal notice to. Then I started thinking about what I had learned here. I discussed the problem and possible solution while talking voice with her. She was very happy.

People who pay late annoy me. They usually get so far behind that they can not catch up.

Make a Zero tolerance policy (hey zero(IN) did you see what I did here?) where you have zero tolerance for late payments.

if rent is due on the first, and late on the 5th, you need to put a pay or quit notice on their door on the 6th and start the eviction process by the 16th. Check your state laws on the timing.

Maybe tolerate a late payment or two. Then either do not renew their lease or become more strict on your rent payment.

If you give an inch they will take a mile.

How do tenants end up owing thousands of dollars in back rent? They tell you a story and you fall for it and next thing you know they owe you for the next month's rent and then you have to start an eviction and they own you for another month's rent. It's all excuses and you are out 3-4 month's rent and lots of aggravation.

"Does anyone here fully explain to a new tenant your complete lease Word for Word, or just some things and give them a copy to read over and ask questions later."

Both

It is very important that everyone is "on the same page" so to speak.

Does your lease mention anything about late fees increasing?

Do your states laws allow it?

What do your states laws say about timing?

Holey cow! Your late fees are stiff. Do your local judges allow that?

I'm in an ultra-conservative area and I wouldn't even try to get that past a judge.

I'm actually thinking about dropping mine a bit. I charge 5% on day 5 and that was great when rent was $500. With rents now at $2400, it seems like too much of a fee to me.

About the lease, I sit there and require the tenant to read it while I wait. They are adults and I am right there to answer questions if they have any.

That is an incredibly stiff late fee. Wouldn't fly in my area. And, I couldn't see keeping a tenant who occasionally gets off track, which would mean frequent turnovers . I only have four small singl family homes, the properties are in C class neighborhoods, and my tenants don't have perfect lives. So, I have a late fee plan that is working well. ( for now) My tenants have to text me ahead of time that they will be late, and give me a date they will pay. I either approve or deny that date. I usually won't go past mid-month, as they will likely have a hard time catching up. They have to pay the late fee of $35 with the rent. I tell them I don't want to know the why, that's their business. At rental agreement signing, I explain there is a $35 late fee. I don't get into the bit about texting me, getting approval at that time. I save that conversation until they are late the second time.

I have had times where I asked them if they could pay partial payment now, and rest at the late date, as I was tight that month. My rents are very reasonable for my area, so I believe they can understand that I might now be rolling in cash either.

It took a bit for me to figure out what works for me, and I am sure I will have some tenants who need explanations , or perhaps a different plan, in the future. I used to work as a Special Education aide, where each kid has an individualized educational plan, yet the goal is to get them to where they don't need an individual plan ( but knowing, many kids in special ed won't meet that. ) OK, landlording isn't Special Ed, and it is often said that landlords must treat each tenant the same, or they are discriminating.. So, sometimes, just sometimes, instead of treating one new tenant special, I change my plan, with proper notice, and change all tenants to a new plan. That is how my current late fee plan has evolved. Only currently have one tenant who pays late, and that tenant pays late every month. Always the simple text conversation, late fee is always paid. Has added to my income stream, with very little extra effort, and the tenant has been there quite a while. House is in good shape, and tenant appreciates the flexibility, though has been getting closer to having full rent in on time, as is thinking towards their retirement. Essentially, this tenant has a payday plan that they pay $35 a month to have, but they can drop the plan at any time by simply paying in full by the due date.

[[[[[..... landlording isn't Special Ed,...]]]]

We get only what we allow. So why do we allow it? We are afraid of saying what we need to say. That is why I charge a $25 technology fee at move in and force them to watch Mike's video.

Younger folks want a video, they don't want a speech from some gray hair dude

$25 technology fee?

I did not explain in detail, but the words in the lease are VERY detailed. I do ask if they have questions and record the lease signing process (after informing them it's being recorded). No matter how you explain it to them, they'll find a way to complain about it. Our late fees were "per day" and did increase as it got later. Our company (LLC) had bills to pay too, and when we can't pay our bills due to the tenant paying late, then we have to pay late fees or borrow to make those payments...so late fees are legitimate.

Hoosier, I think you got lucky charging them per day.

The judges in my part of the state cap it at 10%. That is a one time charge. I hate it, but the new judge accepted what the old judge was doing.

I have thought about asking him about it, but don't want to get on his bad side if you know what I mean.

I have always told my tenants that if they are late with the rent that it's like their boss turning to them on any given Friday and saying, without warning, "We are not going to be able to pay you this week. We had other expenses that came first."

They looked shocked, then the lightbulb goes off in the head, you can see it happen in real time.

99.9% of my tenants are never late, and half pay early. There is ONE that pays on the SIXTH every month, which incurs an $80 late fee. She can afford to pay on the 1st, she just doesn't for some foolish reason. For three years now, $80 extra a month. We never talk about it.