Late on rent, low on forgiveness
Does grace period exist for payment of rent?By Robert Griswold, Thursday, March 1, 2007.
Question: Our lease agreement states that rent is due on the "last day of the month." Unfortunately, my husband does not get paid until the first of the month, at which time we do pay our rent immediately on the 1st. The landlord is claiming that he "must" have it on the last day due to a mortgage due on the 1st, which if not paid exactly on the 1st, charges him a $56 late fee, a sum he is asking us to pay. Our lease details nothing about late fees or grace periods on our rent. Is there any law that provides that the landlord must give us a minimum grace period on rent before a late fee can be charged? Are we obligated to pay the late fee on his loan?
Property Manager Griswold replies:
While a grace period for rent payment is common in most tenant-landlord relationships, there is no legal requirement that the landlord must offer a grace period for the payment of your rent. You signed the lease knowing that the rent was due at the end of the month and that there was no grace period. Virtually all standardized leases contain language about late charges, so the fact that your lease agreement is silent could make it difficult for the landlord to collect the late fee if the matter were ever brought before a court of law. Further, the issue of what constitutes a proper late charge is widely debated, with most jurisdictions requiring that the late fee be reasonable and bear a direct correlation to the additional costs incurred by the landlord as a direct result of the late payment of rent by the tenant. So the question isn't really that you should pay the late charge but what are the damages your landlord incurs because of your failure to comply with your rental agreement. In this case, your landlord has a $56 late fee that he is charged if he doesn't make his mortgage payment in a timely manner so he may be able to prove that these additional costs are directly related to your late payment of rent.
While I would agree that it would be prudent for the landlord to have enough funds available so that he could make the loan payment regardless of the timing of your rent payment, such financial prudence and basic common sense is not required. Likewise, the landlord could comment on your money management practices and suggest that the income your husband receives on the first of the month should be held for the rent payment at the end of that month or that you simply pay your rent a few weeks in advance. The "time value of money" or lost interest earnings on those funds is much less than the $56 you are being charged for paying your rent just a few days late. The deciding factor here in my mind is that you signed and agreed to payment terms in your lease that require the payment of the rent on the last day of the month, and there is no grace period. My advice is it would sure seem to be more financially efficient and less stressful for you if you could make the necessary sacrifices to get ahead on your rent.
Question: I own a house that I rented out for the first time last year. When my tenants left at the end of their lease, the place was a mess, outside and in. Besides the pile of junk in the yard, I found a major rat problem -- about 30 loose rats that ate through foundation posts, destroyed insulation, and nested everywhere. I've learned from the neighbors that the family kept a male and female rat as pets, and kept them in the garage. I had to hire an exterminator and a contractor. Who is responsible for the damage and filth caused by the rats? Can I use the security deposit to cover my repair costs?
Steven Kellman, an attorney for tenants, replies:
While tenants are responsible for damage caused for use that is beyond ordinary wear and tear, you must be able to prove the tenants -- or their pets -- caused the damage. In this case, there was significant damage that you apparently assume was done by rats. As part of that assumption, you may be relying on speculation that there was a 30-member gang of rats running loose at the house. You are also relying on the assessment by a neighbor as to the tenants having had male and female pet rats. If they were pets, one may also speculate that they were protected from running loose and that they were taken away when the tenants moved out. As to the tenant's pet rats having 30 baby rats who grew up real quick with an appetite for foundation posts and insulation, you may have a tough time proving that one. In any event, if you feel your evidence is strong enough, you may deduct the damages from the deposit to cover the repairs and seek additional money from the tenants if the deposit will not be sufficient to pay for all the repairs.
This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of "Property Management for Dummies" and co-author of "Real Estate Investing for Dummies," and San Diego attorneys Steven R. Kellman, director of the Tenant's Legal Center, and James McKinley, principal in a law firm representing landlords.
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