“What are your Due Dates; Late Fee Dates & Amounts; and Eviction Dates for your MHP?”
Our Business Model uses Frank’s ( @frankrolfe ) saying:
“No Pay, No Stay”
Our current Business Model is the following. We call it our “Customer Payment Responsibilities”:
• Due: 1st Day Of Each Month
• Late Fee - $25: 6th - 10th Days Of Each Month
• Late Fee - $100: 11th Day Of Each Month & After
• Eviction Process Begins: 11th Day Of Each Month
We base our Late Fees & Eviction on the United States Postal Service “Postmark Date”.
Since there is a 2 day turnaround for mail, we do not officially “Evict” until the 12th of the Month.
We do evict and have no problems evicting.
However, we are beginning to feel that the 12th is a bit too lenient to start the Eviction Process.
We were just wondering what Dates & Fees other MHP Owners are using?
While we currently do not own an MHP we do have several multi families here in FL. All of our tenants are on month to month leases. We were advised by our attorney to stay away from high late fees as if we ever had to go to court for an eviction it may appear that we were trying to price them out of the home with late fees and it could easily work against us in court. So with that said here’s our current process,
1.) Rent is due on the first of the month.
2.) A $25 late fee is added after 3 days.
3.) If we have not received the rent by the 5th day we give the tenants a 3 day notice to pay or vacate.
4.) If we have not received the rent by the close of business of the date listed on the 3 day notice we begin the eviction process.
Luckily we have only had to start the eviction process on one tenant so far. They had a history of paying late and as he had inherited them from the seller we decided to redo the lease and enforce it as their old lease didn’t have any late fees. Long story short they mailed the rent as soon as they received the 3 day notice but we never received it. They never said anything to the process server, our attorney, or us about mailing the check so we proceeded with the eviction which they contested and sent an addition $725 for rent to the court. We received their rent check like 3 weeks later it was postmarked for the day after we put the 3 day notice on their door. Our attorney got them to sign the money that was being held by the court over to us for legal fees in exchange for us dropping the eviction. Needless to say they have paid on time every single month since even over nighting their payment.
Got ya, I think down here from what the attorney said it may be an issue to charge over a certain % f the rent in a late fee. With that said I would want them to pay court costs and attorney fees if ever I started and eviction and they wanted to stay.
I’ve done daily late fees for 13 years, and would not recommend it. It’s too much work to figure our how much the tenant’s owe at any given time. I highly recommend avoiding it. The only reason I keep doing it is because I have about 100 leases already set up that way and haven’t yet changed them.
The process for charging late fees and how much you charge is often included in your state landlord tenant regulations. Some landlords do not bother learning their regulations and may or may not be following their state regulations.
In my case I am not permitted to charge late payment fees but can charge for the cost of NSF checks.
Our regulations allow landlords to apply to the landlord tenant board to collect rent owed if the tenant has not paid by midnight on the day the rent is due. On the second of the month, when I have not received my rent, I apply to the board, pay a $170 application fee, and wait for a hearing date. At the hearing, regardless whether the tenant has paid the rent prior to the hearing they are ordered to pay any rent owing as well as my $170 filing fee. There is no financial benefit to me but no tenant I have taken to the board has ever paid late twice.
Unfortunately we are in a extremely pro tenant environment and the government makes it as inconvenient as possible for landlords to impose any rules or restrictions on tenants.
In a perfect world If I were allowed to charge a late fee I would expect tenants to pay the rent and the late fee by midnight on the 2nd and if not paid apply to the board on the third of the month.
I personally consider non payment of rent on time as steeling from me and believe it should be treated as harshly as the regulations will allow.
@Greg , you run a very tight ship. I am curious if you are still pursuing the other MHP that you posted about previously. That MHP seems like it needs some TLC.
What it needs is proper management more than anything. Sort of a mini turn around project, new rules, enforce rules deal with maybe 2 or 3 tenants and fill about 5-7 some empty lots.
I am waiting to see where it goes price wise, The agent listing the property is pursuing me and I am only slightly interested in buying. Unless it becomes a killer deal I am not interested mainly because I do not have the interest or time to operate a coin laundry that supposedly makes up half the income of the community. If the price drops to where I am only paying for the value of the lot rent I may go for it.
Big kicker is my wife does not want me to take on more work so is not interested at all in further investing. To go forward I would need to partner with my son and son inlaw. I do the financing and they do the work.
Time will tell.
My park is in Indiana with lot rents of $225 and I charge the following:
Rent is due on the 1st and late if received after the 5th.
On the 6th there is a $50 late fee plus $5 per day. Advice from Frank and others was to charge a high late fee and I think our late fees accomplish that as tenant can rack up around $170 in late fees in a month on $225 lot rent. The court system is slow so it can take a couple of months to evict in my city.
My attorney charges $350 for the eviction including court costs(about $140 I think). Seldom do we not get a damages judgement between $1000-$1500. I am now starting to have the attorney go after wages garnishment as well to recover the judgement amounts.
Like Kristin, I’m about 2 days mail time from the park. I find I usually begin the eviction process around the 12th or so. This gives enough time to attempt collections or arrangements.
Earnest, I feel your pain but with over 200 sites late payments do not occur unless the mail got lost. If you do tolerate late payments with fines you are working backwards. Deal with responsible people or at least train them so you monies will be their the first or they need to find a new home. If someone is late we do listen if they have a good reason and as owners we need to show tolerance for situations that are totally unexpected and we find communications is important to remedy a difficult situation but more than once a year being late is unacceptable.
@Kristin, could you please review my wording of late fees and dates? I based it on your model. Thank you!
Dear Resident,
Please be advised that effective November 1st, 2016 the monthly rent for the premises you now occupy shall be increased to $185.00 per month.
Rent is due on the 1st of each month.
There will be a Late Fee Charge of $35.00 if not paid on or before the 5th of the month.
If the lot rent and late fee have not been received by the 11th, then an additional $100.00 late fee will be charged each month on the 1st until full payment is received.
If the lot rent and late fee(s) have not been received by the 11th, then the eviction process will commence on the 12th.
You should include the full address of the park including the lot number in the notice rather than simply “the premises you now occupy”.
You might also include a line stating - rent shall be considered as “late” if payment not received in full by end of day on the first.
You also need to include a line indicating a fee for NSF checks as that will also be a late payment and often takes a week or two to show up.
I would indicate that the $100 fee will be deducted from their rent payment making each subsequent rent payment late as well adding to their late fees.
I would also indicate that repeated late payments will result in eviction.
When a tenant does not pay late fees promptly they are unlikely to ever pay and a eviction will result. The entire community needs to learn that paying the $35 within 5 days is their best, possibly only, option if they wish to remain as a resident. It is best to place as much financial pressure on the tenant as possible to escalate and speed up the eviction and teach all residents you mean business…
“Could you please review my wording of late fees and dates?”
First of all I apologize for the delay in responding.
Today was the first day of school for the year for 2 of our 3 boys.
Thus, we have been having fun with our “School Supply Hunt” :-).
Your wording looks great for the:
Rent Increase (Just verify that you are giving them enough lead time as per your State Law)
Rent Due: On the 1st
Late Fee: $35 If Not Paid On Or Before The 5th
I would clarify what you are using as your “Date” to determine Late Fees and Evictions. For Evictions you indicate that if the payment has “not been received by the 11th”. What does “received by” mean? Do you have a collection box on-site or does your manager collect on-site?
We do not have a collection box on-site.
We use the United States Postal Service Postmark Date to determine Late Fees and Evictions.
I would also clarify when the $100 Late Fee is Due. Is the Late Fee due on the 12th or on the 1st of the next month?
Our Late Fees are Due immediately.
Actually, we have changed our “Customer Payment Responsibilites” to be more restrictive, because even though the Rent was Due on the 1st…some Tenants would not mail it until the 5th.
Now our policy is:
• Due: 1st Day Of Each Month
• Late Fee - $25: 2nd - 5th Days Of Each Month – If Rent Envelope Is Postmarked The 2nd - 5th, A $25 Late Fee Will Be Imposed Immediately With No Written Notice.
• Late Fee - $100: 6th Day Or Later Of Each Month – If Rent Envelope Is Postmarked The 6th Or Later, A $100 Late Fee Will Be Imposed Immediately With No Written Notice.
• Eviction Process Begins: 6th Day Of Each Month – All Rents & Fees Not Paid In Full –The Eviction Process Will Begin The 6th Day With No Written Notice.
In addition as per our State Law we include the following on both our Month-To-Month Leases and Monthly Bills:
“IF YOU DO NOT PAY YOUR RENT ON TIME THIS IS YOUR NOTICE. IF YOU DO NOT PAY YOUR RENT WITHIN FIVE DAYS OF THE DUE DATE,
THE LANDLORD CAN START TO HAVE YOU EVICTED. YOU WILL GET NO OTHER NOTICE AS LONG AS YOU LIVE IN THIS MOBILE HOME PARK.”
“Where can I find the specific rules for late charges, etc, for Texas?”
For South Carolina I googled “South Carolina Rental Laws” and the South Carolina State Laws came up.
For South Carolina the State Laws are listed under:
South Carolina Code of Laws
Unannotated
Title 27 - Property and Conveyances
CHAPTER 40
Residential Landlord and Tenant Act
"SECTION 27-40-710. Noncompliance with rental agreement; failure to pay rent; removal of evicted tenant’s personal property.
…
(B) If rent is unpaid when due and the tenant fails to pay rent within five days from the date due or the tenant is in violation of Section 27-40-540, the landlord may terminate the rental agreement provided the landlord has given the tenant written notice of nonpayment and his intention to terminate the rental agreement if the rent is not paid within that period. The landlord’s obligation to provide notice under this section is satisfied for any lease term after the landlord has given one such notice to the tenant or if the notice is contained in conspicuous language in a written rental agreement. The written notice requirement upon the landlord under this subsection shall be considered to have been complied with if the rental agreement contains the following or a substantially equivalent provision:
"IF YOU DO NOT PAY YOUR RENT ON TIME
This is your notice. If you do not pay your rent within five days of the due date, the landlord can start to have you evicted. You will get no other notice as long as you live in this rental unit."
The presence of this provision in the rental agreement fully satisfies the “written notice” requirement under this subsection and applies to a month-to-month tenancy following the specified lease term in the original rental agreement. If the rental agreement contains the provision set forth in this subsection, the landlord is not required to furnish any separate or additional written notice to the tenant in order to commence eviction proceedings for nonpayment of rent even after the original term of the rental agreement has expired."