Charging high late fees

I live in Indiana and my lawyer tells me there is not maximum late fee law in Indiana. However when I google the subject, some of the info I read suggested not going about 5% or so or a judge could deem it unfair. Well I do not think $10 on a $200 lot rent is even near enough to deter the tenant from paying late. I was thinking about making the late fee $30-$50 on dwellings that I rent for $200/mo-$500/mo. Well that’s late fee would more like %10 to 25%.
I would love to hear some people’s experience on this, especially someone like Frank who has done this in mass. Thanks you all!

We have a similarly vague law in Texas too.

I set my late fees at a $50 one time charge on $250 lot rent to be a deterrent (as you mentioned) to the tenant and to also compensate me for time and expense making the tenant whole. Parks with a $10 late fee have at least 25% of the tenants late habitually, and spinning your wheels collecting that is a waste of your time and effort. You see this in the Parks where the Owner has a “discount” if you pay on time type model too.

It’s fair you need to know your judges and how they rule on this as it does vary from state to state. My business case is that I have to spend an hour printing and stuffing envelopes, taking it to the post office, sending it via certified mail (if applicable), and then taking the time tracking and preparing for eviction - $50 is an absolute insult of my time for these types of tasks and I should be charging $500. By the time a tenant complains about this and you’re in front of a judge you will have a lot of time already invested to make the business case that $50 is reasonable, especially if I had my attorney doing the work.

If I was really concerned I would approach these attorneys that specialize in evictions - they can talk about the local judge’s mindset on what is unreasonable and have probably had clients that fought the late fee, and can help you establish the right number.

I would not implement a model with late fees for every day tenant is past due.

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I’m in Kentucky and I charge 50 after the 5th and another 50 after the 10th.

This is on a residential house though but 10-20 won’t deter your habitual late payers.

I’ll probably do the same system as I have now when I find my first park.

Good luck

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If you are in a jurisdiction that allows the manager to do the eviction in the local court, you or the manager should meet with the judge or the clerk to discuss this. You will usually be facing the same judge in each instance. Getting the judge’s take should guide your decisions unless you want to take on a hassle.


There typically is a judicial precedent set per state even if the statutes leave the allowed late fee maximum unclear. A good attorney that has done evictions in that state should be able to tell you what that is.

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You need to call the Indiana MHA to get the actual facts, but there is no set statute in Indiana to my knowledge, so you just have to be reasonable and work with what the judge where your park is located deems reasonable. Most park owners charge around $50, and in most courts that’s fine. But I would call the court and ask them, the surrounding park owners and ask them, and some apartment complexes and ask them. I would also Google up the topic extensively. Here’s the IMHA website

At the end of the day, it doesn’t matter what the law is, only what the judge thinks the law is.


You need to go with what you deem to be a reasonable amount to deter further late payments. In our business, because the rents are so low, a percentage is not sufficient.$50 is/should be a reasonable amount and would be what I would charge. In addition I would inform all residents that the fee will be applied to the first late and a second late will result in a eviction notice and the late fee. A third late will result in an eviction.

It is very important that landlords recognise the fact that a late fee is not intended to punish residents or compensate you for your time it is intended to discourage tenants from repeating the behaviour. If you view it as compensation or additional income it defeats the purpose. Residents must understand that late payment is a form of stealing money (although temporary) from a landlord and is not tolerable. Good tenants do not pay late, bad tenants pay late and should not be tolerated. A properly run business will correct problems not tolerate them.

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My park is in PA and the previous owner charged the tenants $50-penalty & $10/day-late fee. Right after we took over the park, we joined the PA MHA and they advised me that $25-Penalty and $5/day will be more reasonable, and the judge most likely will not say anything. We changed those fees in our Rules & Regulations and had one Eviction last year, everything went well.

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Thanks for all the input. I’ve had the same system for 13 years. $10 late fee after the 10th, and $5/day after the 20th. It was a mistake to set it up that way, and I have just never changed it. I would highly recommend avoiding daily fees if possible. It creates a lot of work!