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How to Collect Late Rent Payment and
How Much Late Rent Fees to Charge Tenants

Collecting late rent payment from tenants can be a walk in the park if you know the right steps to take. Learn what are the tried and tested ways of collecting late rent and charging late rent fees right now.

How do You Chase Your Tenant for Late Rent Payments?

Some difficult tenants can give you a hard time when you are collecting rent from them but you can avoid most ugly situations by having a solid plan in the first place.

For starters, prevention is always better than cure so it is helpful to give your problem tenants a gentle reminder a few days before the rent date. You can simply email them or give them a quick phone call. This way they cannot use of the all-too-common "I forgot" excuse on you when it's time to pay up.

If your tenant still falls behind in his rent payments, then send him a late rent notice (which doubles up as a warning letter). Click here for our free late rent letter to collect late rent payments and impose late fees.

Should You Impose Late Rent Fees for All Your Tenants?

Charging late rent fees is optional so naturally we have two opposing camps when it comes to this issue.

Some landlords belong to the "Mr Nice" camp where they do not believe in charging their tenants for late rent because they feel that doing so builds goodwill and trust. They are more casual and will let their tenants off without penalty charges as long as they receive their rent in the end.

However, we highly recommend that you should charge late rent fees for a few solid reasons.

To slap on late rent charges, your lease agreement forms should come with a clause that reads like this: " If rent due is not paid on of before the _____ day of the month, Tenant agrees to pay a late charge of $ _______________ plus an additional late charge of $ _______________ per day until the rent is paid in full."

From our experience, we have discovered that some new tenants like to test the waters with their landlords. They will purposely pay their rents late for the first month to see how their landlord will react. If you give in this first time, they will take it that you will be willing to accept late payments in the future as well.

It's human nature to hold onto their hard earned cash. It's that type of mindset that drives tenants to delay their rent payments even when they can afford to pay up right now.

By charging your tenants for late rent, you are sending a clear message that you mean business on your landlord issues. It will train your tenants to see the importance of timely rent payments by giving them an incentive to pay up on time.

How Much Should You Charge for a Late Rent Payment?

Most landlords generally set their late rent charges at 5% to 10% of the rent amount. Some landlords may also demand a daily penalty fee such as a $15-per-day late charge for each additional day that they have wait for the rent.

Do remember that the whole point of late rent charges is to compensate landlords for any losses - It's not a weapon for milking or exploiting tenants.

If you go wild and randomly overcharge (late fees above 30% of the rent are generally considered overkill), your tenant can refuse to pay a single cent and file a complaint against you.

Who Keeps the Late Rent Fees? - Landlord or Manager?

In most countries, there is no hard-and-fast rule on who gets to pocket the late rent charges so be sure to discuss this matter with your property manager beforehand.

Unless your property manager has won your trust, It's a good idea to insist that he or she hands over the late rent fees to you... otherwise some shady managers may allow your tenants to pay their rents late on purpose so that they can collect late rent payment fees.

Allowing your property manager to pocket extra fees for late rent payment may "entice" him or her to be more reckless when screening tenants... and we all know the havoc that a bad tenant can unleash if he or she is allowed to slip through the screening process.

Read what our visitors have to share below OR Scroll down to add your own comment

What are Your Best Tips for Collecting Late Rent or Charging Late Rent Fees?

If you are stuck with nightmare tenants, making sure that they pay their rent on time can be a real challenge for anyone. How do you collect late rent payments and charge late rent fees? Share your valuable experience with everyone here - We will love to hear your tips, comments and real life stories:

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What Our Visitors Have to Say on Dealing with Late Rent

Click on the links below to read the valuable tips that our other visitors have to share:

How I Collect Late Rent Fees  starstarstarstarstar
I know that in many areas, you are not allowed to charge or collect late rent fees. What I have done for late rent collection is this:

I wanted to ...

How Do I Calculate My Late Rent?  starstarstarstarstar
The rental contract with my tenants state that the rent is due on 1st of the month but a grace period is given until the 5th. It also states there is a ...

How I Avoid Late Rent Payment  starstarstarstarstar
As a landlord I find that late rent payments used to be one of my most common yet tricky landlord issues. I had to learn the hard way that preventing late ...

How I Handle Overdue Rent  Not rated yet
In the past, I have tried emailing tenants a few days before the rent is due as a reminder. However, overdue rent still remained a problem so I have found ...




Do you want to learn MORE practical must-know facts on handling bad tenants?

Return from this Collecting Late Rent Payment page to our How to be a Landlord guide



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