Re: Does Colorado have a limit on Late Fees? - Landlord Forum thread 342100

Re: Does Colorado have a limit on Late Fees? by MrDan (Georgia) on January 8, 2016 @10:48

A mistake that many DIY landlords fail to realize is that not everything that pertains to being a landlord is located in their State landlord tenant statues.

The reasons late fees may be disallowed in whole or in part fall under one or more of the following theories:
1) usurious additional interest
2) invalid penalty
3) unreasonableness
4) unconscionability
5) unenforceable liquidated damages

Landlords often feel that late fees should act as a penalty to tenants. This is not what late fees are intended for and a court can find the fees to be usurious, unreasonable or even illegal. Accordingly under Colorado State law, "if the late charge and/or interest exceed 45% of the principal amount due, a court may eliminate all late fees and interest due to the usurious nature of the fees".

If you have late charges that increase each day the rent is late, they could be considered interest charged at a usurious rate. For example, ten dollars per day for a rent of $1,000 is 3,650% annual interest. A landlord, for example, could charge $10 for the first day, $5 for each subsequent day, but it should be capped at a reasonable amount of the total rent.

In Colorado, any charge that exceeds an annual percentage rate of forty-five percent commits the crime of criminal usury, which is a class 6 felony.

While a landlord might not be charged with a crime, the landlord could be subject to triple damages, court cost and attorney fees if late fees were found to be invalid.
Also need to mention that State statues on how liquidated damages are defined may also apply to a landlords ability to enforce late fees. Any late fees that are determine to be a penalty are not enforceable under Colorado law.

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Re: Does Colorado have a limit on Late Fees? by Anonymous on January 8, 2016 @11:26	[ Reply ]

So the landlord CAN charge $10/day when the rent is $1,000/month, assuming the landlord does not allow the cumulative annual amount charged to exceed 45% of the total amount of rent collected. Since $10/day ($300/month) is 30% of the $1000/month, a landlord can charge this each and every month if the tenant is late and still not exceed the 45% limit. Because, of course, you don't keep charging late fees past the end of a particular month -- you get evict the tenant for non-payment well before you get to the end of the month! And even if you don't evict, I would assume that the late fee stops for January and resets for February when the month rolls over. So if a tenant doesn't pay January rent until February 15, you aren't continuing the January late fee through February 15, you are stopping it at the end of January and if you aren't smart enough to have started an eviction proceeding, you shelve the late fee for January and then start charging the late fee for February on February's unpaid rent.

Re: Does Colorado have a limit on Late Fees? by Tom on January 10, 2016 @12:48	[ Reply ]

No, it's not 30%, but 360% ARP which would be illegal.

Re: Does Colorado have a limit on Late Fees? by Anonymous on January 12, 2016 @12:11	[ Reply ]

How does $300 interest on $1000 rent become 360% annually? It's only 30%. In annual figures, it would be $3600 on $12000 -- still only 30%...? What do I not understand in your calculation?

Re: Does Colorado have a limit on Late Fees? by Stephen (WA - Washington) on January 8, 2016 @15:11	[ Reply ]

Interesting. As a former psychology major I tend to view late fees as an incentive for the tenant to change their behavior. From that viewpoint, when I had a tenant who had set up an automatic check from a bank and either the bank or the Postal Service screwed up so the payment was late, I saw no need for a late fee as the tenant had no behavior that needed changing. Now if we could have passed the fee on to the bank I would have been happy to do that.

Re: Does Colorado have a limit on Late Fees? by Tom on January 10, 2016 @12:54	[ Reply ]

Interestingly, I've never felt the need to change someones behavior nor control them.

Re: Does Colorado have a limit on Late Fees? by Chrissy Smiley (Colorado) on September 7, 2016 @17:57	[ Reply ]

I really like the way you think. I think that's the most kind and civil way to be. You're a good person. I have a property management business in Boulder, Colorado and I too try to be reasonable and think of the actual purpose and goal of fees and fines. It should not be just to be greedy.

Re: Does Colorado have a limit on Late Fees? by carrie (colorado) on August 30, 2016 @01:20	[ Reply ]

Hello, this is an old feed but wanted to post as I am in a very uncomfortable position with my landlord right now. I have lived in the home for 11 months. During 3 of those months, my landlord agreed to work with me on allowing me to make late payments as I hurt my back and am a single mom. I was able to fulfill each deadline and now for the last 4 months I have been on time. Recently he told me that I need to replace my deposit of $1800 on top of an additional $450 all because of late fees. He has never sent me an invoice in the past. He is charging me $50/day which I didn't realize until now is unethical. He also gave me 2 weeks to pay it or he will start eviction proceedings. I am willing to pay late fees however what he is stating that I owe seems excessive. I replied, "I will come up with a plan but do you mind sending me a breakdown of the fees?" He replies (all through text) "I will lower it to $1600 which I think is more than fair. If you have a problem with reimbursing me, you will have to move out." I replied, "I am willing to pay for late fees but need to see how everything is adding up." He said, "I will have to go through my paperwork." and that is the last I have heard from him. It has been 9 days. I don't have any intention to move out or not pay late fees as I can agree that I have been late. I am a single mom, work full-time and go to school full-time. We have built a home here. Additionally, my lease states there is a 5 day grace period and that late fees do not start until the sixth day. Anyhow, I am looking for advice on how to handle this. He hasn't been the easiest person to deal with. He will send me multiple text messages about rent when I had already deposited the cash in his account but he doesn't check his account before he starts texting me, sometimes starting the 28th. Moving would be devastating financially, going to court would be an added stress I do not need, yet I'm hesitant to stay because I don't want to be harassed anymore Please help me...

Re: Does Colorado have a limit on Late Fees? by Anonymous on December 13, 2017 @09:09	[ Reply ]

Seems that the legislators here in Colorado must be rental property owners. 45% is out right theft, legislated by rental property owners. I was charged a $20.00 late fee on a parking spot that cost $45.00. Just under the 45%. First month. Landlord promised to email me a notice in advance so that I could pay online. I requested a auto draft but this was not available. I received the notice the 11th with a late fee charge. I fell like I was baited up for a late fee. Now, all of a sudden, auto draft is available. I would give anyone $20 if they needed it. To be baited up for a late fee legally robbed is infuriating.

Re: Does Colorado have a limit on Late Fees? by Leesa Wilson (CO) on April 2, 2018 @13:13	[ Reply ]

I have a similar question... My rent of $725. is due on the first. Yesterday was the 1st, a Sunday and Easter. I forgot to slip my check under her door until this morning at 10am. When I returned to my door (we live in a big 5 apt house... ) I noticed she had taped a notice on my door which stated I owe $72 late fee. My lease expired Sept last year. Please advise me. Is this fair?

Re: Does Colorado have a limit on Late Fees? by SONY (Colorado ) on April 6, 2018 @15:12	[ Reply ]

I paid my rent on time March 3rd with a check, I have lived in here almost a year and never had a problem before. Recently like I mentioned I paid my rend with a check on the 3rd of March. Didn't hear from the landlords office until the 27th of March with a 3 days notification stating that I have not paid my rent, I called the office and lady told me that the check bounce. I check my statement and the balance was there until the 14 of march. on the 15th I have auto debit payments due to that date. On my bank statement the landlord tried to cash the check on the 19th. They are charging me $409.00 dollars due to late fees from the 1st to the 31st. I make a money order on the 27 and paid my rent amount and request a description of the late fees. My questions are 1. Is there a specific time or date to cash the check, 2. If they tried to cash the check on the 19th why they waited until the 27th to let me know 3. They charge me for all the 31 days when I have until day 5 to pay and 5 days after the 27th when I was informed. Today I received another letter telling me that I still owe my rent (I paid on the 3 of April, with money order) and they add $100 more on the 409 dollars that they are requesting for late charges. is $409.oo on or over the 45% interest annually and Is it legal to charge me 100$ for late fees on a balance of previous month late fees of 409.00 thank you