Grace periods for rent payment
Q: What about my grace period?

Currently, I rent a studio apartment. I usually pay my rent the 1st of each month. This month I cannot pay my rent until the 6th of the month. My landlord called me at work and issued a threat about what would happen if I did not have the rent in his hands by the close of business on the 5th. This is not the first time he has issued these threats. I always thought a person had a grace period for paying their rent. Is this correct?

Jersey City Heights, NJ

A: Yes, some leases have a grace period but not all of them. But, it sounds like yours ends on the 5th of the month. If you pay your rent on the 6th of the month, it's late.

The majority of rental agreements state that rent is "due on the 1st, late on the 5th." So, really, your rent is due on the 1st, not the 2nd, 3rd, 4th or 5th, but the 1st. But, under a lease with this language, your landlord may only consider the rent late if you don't pay it by the 5th.

If you pay your rent after the 5th, your landlord can consider it late. At that point, you may owe a late fee. In addition, if you repeatedly pay your rent late, the landlord may choose to evict you. Each time you pay your rent late, you're violating the terms of your lease. Several repeated late rent payments would give your landlord more than enough grounds to evict you.

Do it once or twice in a year and your landlord will probably overlook it. But, do it often enough and you'll become a hassle and a greater credit risk than the landlord will probably tolerate. If your rent is late often enough, this signals to your landlord that your financial management isn't the greatest. He'll begin to wonder if you'll make your next rent payment more than a day late or whether you'll make it at all.

Charging late fees for overdue rent
Q: What if late fees are too high?

What is the most a landlord can charge for late fees? I think mine are kind of high. I need to find out whether the landlord can charge this much.

Lancaster, CA

A: I'd recommend that you just pay your rent on time. Then, you wouldn't have to pay any late fees at all. But, I know, sometimes things happen. If you're having trouble budgeting, you might want to attend a financial management class at a local learning center.

If it's only once in a blue moon, you should just ask your landlord to waive the late fee. If you catch him or her on a good day, that might solve your problem one time.

Otherwise, only about a dozen states actually put specific limits on the late fees a landlord can charge. In the other states, a landlord cannot charge an "unreasonably high" late fee. If challenged, a court would decide whether it was an unreasonably high late fee. If the late fee is not more than 5% of the rent, it's probably not unreasonably high.

How do you challenge a late fee? Before you do anything, you should discuss it with your landlord. If that doesn't work, you can refuse to pay it and pay only the rent involved. That, however, might cause the landlord to immediately attempt to evict you for breaking your lease. The safer course is to pay the late fee and then sue your landlord in small claims court for its return.

Your landlord won't be happy though. You might not get immediately evicted. But, he may give you a 30-day notice to vacate if you're on a month-to-month lease, or he may ask you to vacate at the end of the term of your lease. And, worse yet, he may not give a good recommendation to any prospective new landlord that calls.

If you really want to challenge the late fee, be prepared for the potential consequences. The best solution is to make sure you pay your rent on time.

Disclaimer
Information provided by Phil or Greg should not be construed as real estate or legal advice. State and local laws may vary, so please consult legal counsel in your area with respect to your individual situation.

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