How Do I Calculate My Late Rent?

by Sara
(Las Vegas, USA)

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 late fee of $25 plus $25 per additional day until the rent is received in full. We are currently having a dispute with my tenants regarding how to calculate late rent.

I have to mention that they are late in paying rent every month and always give me a hard luck story so I usually don't charge them late rent fees but after so many times I told them last month that I was going to enforce the contract down to the letter.

What happened was that the grace period was till the 5th day of the month and they deposited the check on the 9th.

According to my calculations, there is a late fee of $25, plus $25 per day adding to an additional $100. On the other hand, my tenant argues that it should only be $75 and that I cannot charge a fee for the day she pays it (which is the 9th).

I understand what she is saying, but my logic is that if the rent is paid on the 6th, the late fees will be $25, the 7th = $50, the 8th = $75 and the 9th = $100. If I use her logic then the late rent fees for the 9th day will be $75, the 8th = $50, the 7th = $25 and the 6th = $0?

So does it mean that there is zero late fees if rent is one day late? Anyone have any thoughts on this?


Editor's Comments: Hello Sara, thank you for sharing your experience and posting this excellent question which will be highly helpful to our visitors.

After looking closely at your question, we do believe that what your tenant actually meant was that she shouldn't be paying any late fees for the day that she deposited the check (which is the 9th day).

If we return to your example above, her logic is this: 6th day = $25 late fees, 7th day = $50, 8th day = $75, 9th day = $75 (no additional late fees because it is the day she paid up).

In most cases, whether you will be able to reclaim this extra $25 late fees will depend on how your written lease agreement is worded for late rent section.

If the exact terms for your late rent charges are not clearly stated, then you may have problems getting that $25 back. To ensure that this does not happen again, you should clarify your late rent fee policy with your tenants or even amend your lease agreement to reflect your late fees charges more clearly.

Your real life experience highlights another important point which we always try to remind all our visitors - We highly recommend that all landlord to impose and collect their late rent fees from Day 1. This is often the most effective way to avoid late rent payments and make rent collecting a breeze in the long run.

To learn how to prevent late rent payments and impose late fees, Click here for our complete Late Rent Payment Guide.