Comments on: Charging Tenants Late Fees: Rental Property Advice

By: tinkerbell

tinkerbell — Sat, 03 Jan 2009 22:07:18 +0000

Jan. 1, 2008, we rented out a house to an unmarried couple (in MI.). Each had a teenager. We were in a hurry to get the house rented (my husband had just gotten layed off for the winter and money gets tight), and were not carefull enough to get references, credit check, ect. before letting them move in. The contract that we (both tenants, and I ) signed was one that I had drawn up and I had overlooked a late rent clause. I gave a $50 early pay incentive, which we have found in the past, to be suffecient and late rent wasn’t in the picture. This couple asked if they could just use the “early pay incentive” as pet rent and keep their rent at $700 a month. We agreed. They had been good about paying rent until this last fall. Oct came late, but paid. Nov. was later, but eventually paid. Only $200. for Dec., and now we are into the Jan with no payment. We had also agreed to let them make installments on their deposit of $1000.00 which they have a balance of $650.00 due. Can I write up an adendem to the rental agreement for a late fee? And how much can I charge for that? The male tenant told us that any damages that they did, he would fix because he is a handyman by trade. I have sent them 1 letter by regular mail asking for more rent and explaining that I have seen quite a bit of damage done there while doing a “drive by”. I have also sent 2 letters by return-reciept-requested mail, which they have neglected to sign and pick up from the post office. We can not really afford to go to court right now to evict them, and we do understand that here in Michigan, it’s hard to find work. But we have bills that need to be paid as well and don’t want to get behind. If we do have to evict them, do we need to get a lawyer? How much should we expect to pay for our expenses (an average ball park figure is good) like court costs. And if the court would rule in our favor, what expences could we possibly expect to retreive?

By: Fred

Fred — Fri, 15 Aug 2008 11:18:42 +0000

Joanne,

It sounds like in your case you were probably more than reasonable. Its hard to predict when being a little firmer will push someone away.

I like the idea of e-mail, but I would want to have that written into the lease agreement as an official form of communication before I used it for anything that I wanted a record of. If I had that, it certainly is a much better way to communicate than paper - saves you the postage, and the photocopying of the original letters. I think we’ll probably add that in next time around.

By: Joanne

Joanne — Thu, 14 Aug 2008 05:33:06 +0000

We had taken a chance on three fresh-out-of-college 22 year olds to fill our old condo unit (I know, potential disaster in the making, but they all had decent jobs and references).

We expected there might be an occasional problem as they all worked to better establish themselves, but the rent was late every single month. Due on the first, grace on the sixth, but sometimes not received until after the 15th. We finally invoked the late fee and a gently admonishing letter to remind them of the terms, but I think they took it too personally. It was hard to talk with them after that. And none of them wanted to rent again this fall, so we have to search for tenants again.

They weren’t bad kids, and actually took decent care of the place, so I would have rather worked it out with them than to see them go. That said, I’ll have to be honest when other landlords call for a recommendation, and say “yes they always paid the rent, but it was always late.”

As far as communicating with our tenants, we generally use e-mail, as it’s less confrontational if there is a problem; this creates a written record as well. We’ll follow up with phone calls on important things, but this way nobody is blindsided.

We have renters in our two-flat as well as the condo, and they live upstairs from us; they’ve never given us a problem. In fact, they’re working to improve the unit with fresh paint and repairs. But, although I see them most days, we still use e-mail to communicate building issues, so there is always a written record.