Let’s face it, no one likes getting late fees on statements or tenant ledgers, but it does happen from time to time. On occasion you may be able to get the fees waived just by asking nicely. But before groveling to your property manager about what a good tenant you are or how the dog ate your rent check, examine your lease and know your rights when it comes to late fees.
How Unwarranted Late Fees Occur
Many landlords have a large number of tenants with huge accounting departments. As a result, notices with late fees may be auto-generated for tenants whose rent has not posted by the fifth of the month. Just because the late fee was applied, does not mean that anyone actually reviewed your lease to see if it’s allowable. And because late fees are pure profit for landlords and property managers, they often count on the fact that you’ll simply pay them to avoid your account going into default.
Check the Lease for Allowable Late Fees
Read your lease carefully to understand what it allows in terms of late fees. There are many ways to assess late fees, including flat late fees, percentage of rent and/or a percentage of the escrows that are due. If you owe late fees, understanding specifically what is contractually allowed in your lease can make a huge difference in the amount you pay.
Late Fees for One-Time Payments
While rent is due the same time every month, one-time payments for things like a year-end reconciliations and utility billing can sneak up on you. Check your lease carefully for one-time due dates. And when you receive a notification from your landlord about those expenses, double-check the due dates and late fee assessments against your lease to confirm they match.
Smart Payment Methods
If your landlord requires payment by a specific date to avoid late charges, it’s highly recommended that you pay via ACH (Automated Clearing House) transfer to avoid mail or courier service delays. In that case, you’ll have an electronic bank receipt as proof of payment. If your landlord doesn’t accept ACH transfers or your accounts payable department requires payment by checks, simply send your payment with some type of tracking mechanism so you’ll have proof of receipt. While this may cost a bit more, it will likely save you money by avoiding late fees.
Some landlords, however, simply require that payments be postmarked by a certain day. If that’s the case, you are most likely fine using the standard mail service.
If you’re a Property Works client, all of the critical deadlines needed to avoid late fees will appear on your weekly tickler report. If you have questions or need additional help deciphering fee requirements outlined in your lease language, contact your relationship manager.
About Property Works
Established in 1996, Property Works provides lease management services to multi-unit retail, restaurant and commercial operators with 30 to more than 1,000 locations. Utilizing its propitiatory software platform and/or full-service lease management capabilities, the Property Works team helps clients: track critical dates and deadlines; redeploy valuable resources; make data-driven decisions; and boost the bottom line. For more information or to schedule a demo, visit PropertyWorks.com or call 678.795.3830.