You really need to check the laws and Truth-In-Renting regulations in your state. Some states don't permit higher than 6% of the rental amount, some states don't permit more than $1.00 a day not to exceed $30. First and foremost you must allow a grace period of 5 business days. Every financial transaction must allow a grace period, unless your particular state says otherwise, but honestly I have never come across a non-grace period yet. $50 a day on the 2nd day? Good luck with that. Especially in today's economy with people lose jobs, loss of income for other reasons.....if the tenant can't pay their rent, and to charge excessive additional late fees on top of it.....do you really think they're going to ever be able to catch up? Think about it. And using excessive late fees as a scare tactic might sound like a nice plan for you......but if I ever saw a $50 or $100 late fee on the 2nd day it would tell me alot about the landlord I was about to rent from and surely look elsewhere. Landlords can not charge whatever they want for late fees. If you can legitimately prove, in court, the amount of financial loss you incurred due to the late rent then you can charge that loss. If you incurred no monetary loss....guess who the judge will side with? Now if you have a habitual late payer, you should consider not renewing or moving them out. But be careful with that too because in this financial climate it's not unusual to see rental properties go vacant for months and months. Do the math on that. I try not to make it so one-sided from our own perspective. I find working with tenants (within reason) usually is the best way to go. Bi-weekly payments or temporarily reducing the rent a bit works to save a tenant and they usually step up to the plate. However, a dead-beat habitual late payer....they need to go. Sometimes they'll even surprise you......talking to them face-to-face and putting them on "notice" sometimes turns them around into a timely rent payer. Trying to figure out how much you can jack them for when they're late.....just doesn't work and pisses everybody off. And if it makes it to court, most of the time the judge will give the benefit of the doubt to the tenant. So then where are you? Lots of hassle and aggravation and no additional late fees. Speaking from experience......try to work with them first. If that doesn't work, cut your losses and cut 'em loose.
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