My park is in Ohio. I charge a $50 late fee after the 5th. Some tenants text me and want to pay on the 21st. I do not wish to kick them out but I want to be fair to the other tenants. Can I charge $10 per day after the 5th? So if they want to pay on the 21st it will be a total of $200 + $50 late fee + late rent. How do you handle this situation? Do I need to change the lease first before I can collect the $10 per day extra late fee?
My park is in Ohio and I charge the same late fee amount. I’ve had the park for 3 years and when I first took over tenants paid on time (sort of) but I had a few that started to slip. I told them I simply can’t wait 3 weeks to accept their rent payment and tell them they will be at risk of being evicted. I have a standard eviction ‘conversation’ that I have with them where I talk about the challenges that they will have if they have an eviction on their record, that as soon as I file eviction with my attorney that the process can’t be stopped and that I can’t accept any payment from them - basically, when it starts and I spend the filing fee, it doesn’t stop. I tell them they will likely have to move their home or they may lose it - moving and setting up a home, finding an inspector, someone to skirt it, hook up the electrical, etc will cost around $8000. Then I then have a conversation with them about money management and that if I was them, the first bill I would pay would be my rent bill. Because without a roof over their head, their struggles will grow exponentially. Their rent is around $10 a day and there should be no reason that they can’t pay their rent… etc, etc.
tmperrault has the only acceptable approach to tenants that choose to pay late, keeping in mind it is a choice as to how they prioritise rent payment. Late payment is never acceptable and not allowed.
I would tell them to get their sh*t together and stop expecting me to carry them financially.
The KINDEST thing a landlord can do is to be VERY STRICT about on time rent payment. Then, the tenant prioritizes paying rent, and thus is never homeless, never has an eviction on their credit report, and has a long-term stable home. Don’t help them get into a hole they can’t get out of, by being lenient. Be strict. I’ve done it both ways. With my first rental I was nice, and let them slide, and ending up having two tenants in a row get in a deep hole and have to be evicted. Now for many years we’ve been strict, so our tenants pay us first rather than all the other things they can spend it on and get in a hole. As a result, we very seldom have evictions. We went through the whole pandemic with 200 units and all paid rent for over 18 months with no one needing to be evicted. The kindest thing you can do is be strict. Rent is due on the 1st, late on the 2nd. Repeat that often.
When we do get a late payer, we look at their history. If they’ve paid on time for 12+ months, we’ll wait a week or two if they ask. But if they have a history of late payment, or don’t communicate with us, we let them know that we’re going to start eviction, then we start and don’t stop.
But if you’re strict, you’ll find it seldom gets to eviction.
They are probably trying to pay on the 21st due to their Disability or SSID check coming on that date.
Verify precisely why they want to pay like that.
I had a guy try to pay me on the 21st of every month for that reason.
I made a deal with him. He could pay me an extra 1/10th of the rent every month in lieu of a Late charge if he agreed to pay me on the 1st of every month thereafter.
(ie rent is $500, he would pay $550). He was happy and I was happy.
I own 4 parks in GA. Much like most credit cards do these days, we do offer the option for “late payers” if it helps them. But they HAVE to stick to the deal, or pay a late fee. Hope this helps??
You can do whatever you want as long as it follows state law. I can’t recall precisely, but you can find it in the Ohio code, I think there is a limit of five or 10% late charge in Ohio. If you exceed that, the judge will not accept it.
We used to have a progressive lare fre, and it was too complicated. We would charge a flat amount on the 6th+3 dollars per day thereafter. When we went in for evictions trials, the judge laughed at us for being so petty. Depending on your software, the three dollars per day can be cumbersome. At the time, we used Buildium, so there would be a separate line item each day, with a late fee, which the judge found a musing against our favor.
If you change the late fee policy, then you will need to document this in the lease. You cannot simply change the terms of a lease by sending a notice to tenants. If your leases are 30 day terms, then you have to give 30 days notice, but if you are on 12 months terms, you will have to send an update before the renewal begins.
I have found the best way to handle tenants who wish to pay late is to tell them that the rent is due on the first, there is a late fee incurred on the sixth, and if you pay late, then you pay the late fee. It is simple as that. If you start accepting payments on different dates, then you do not have a standardize process and management becomes extremely difficult. For example, instead of handing out eviction notices on the sixth your community manager will have to hand out notices on random days throughout the month. This then leads to inefficiencies in the court hearings. Instead of sending your manager or attorney to court once per month for all cases, you would be going in on random dates throughout the month with each tenant having a different court date.
I would highly recommend that you stay away from that madness.
That is a great idea. I have coached people to pay an extra $20-$50 per month to catch up but this actually puts it into a formal structure which is even better.