So, recently I had the realization that the late fees I charge tenants are obviously not high enough. I have a few tenants who consistently, every single month, are late on their rent.
Of course, the reasons range from car trouble to an occasional dead grandmother but that’s irrelevant. The point is that these people are obviously living month-to-month and do not keep any money in reserve for “emergencies.”
The standard terms in my leases are, “…rent is due on the 1st of the month and late on the 4th…” Additionally, “…late fees are $25 on the 4th and $5 per day after that.” So, basically, if a tenant is 1 week late with the rent, it will cost them $55 extra for the month. I guess $55 is not a lot of money these days and the tenants see this as “no big deal.”
My plan next lease renewal is to raise the fee on the 4th to $50 and $10 per day after that which will put them at $110 extra for being late one week. I mean, late fees are supposed to be an incentive to not pay the rent late and with rents so low, I risk losing the tenant if I raise the rent.
However, the next problem becomes that if you go to eviction court, the judges in their infinite foolishness wisdom, could very well pronounce the amount of late fees “unconscionable” (the exact term in the Florida state statute) and negate the whole amount.
Well, I’m going to risk it and raise the late fees. In my opinion, these people need to be more responsible.