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I checked the site. It is written by a tenant advocacy group. It is not the official state law site. Here is a specific discussion on this from another site.
Illegal Late Fees? (by Lois [CA]) Posted on: Nov 15, 2007 9:27 PM Message: State Specific Question About: CALIFORNIA (CA)
Trying to figure how much to charge on a new lease for late fee, and found this article contending that it's illegal to charge. www dot caltenantlaw dot com/LateFees.htm My local LL Assn does have a provision for late fee, but if a tenant wanted to fight it, I bet they would win. Any comments on this article?
Illegal Late Fees? (by Josh [CA]) Posted on: Nov 15, 2007 11:22 PM Message: The guy who authored that entire website is a putz. Take the information he puts up to slap your too full of themselves. Tenants down. He gives you the tools to un-do Pro-tenants. I say thanks to putz and kick him in the ..... on the way out of court with a successful judgment. Illegal Late Fees? (by Rook [CA]) Posted on: Nov 15, 2007 11:38 PM Message:
"Your honor, not only did I have to make an additional phone call to my bookkeeper to inform her that the rent had been paid, but I had to make an additional trip to the bank to deposit the money. This plus the additional interest cost me $35." Most any judge realizes that rent collection and the involved record keeping is a process. If you have a late payment you must repeat the process. I think a reasonable late fee will be upheld. Illegal Late Fees? (by Sean [CA]) Posted on: Nov 15, 2007 11:44 PM Message: Agree with Rook. Nay sayers please post cases that you were personally involved in where reasonable late fees were thrown out where the late fee, and only the late fee was the cause of action.
Illegal Late Fees? (by SteveH [CA]) Posted on: Nov 16, 2007 12:36 AM Message: Agree with Rook. Nay sayers please post cases that you were personally involved in where reasonable late fees were thrown out where the late fee, and only the late fee was the cause of action. Illegal Late Fees? (by Josh [CA]) Posted on: Nov 16, 2007 3:45 AM Message: This guy iscake to tear apart. This statement doesn't even apply! The LL's bills has NOTHING to do with this. The facts are that the tenant and LL haved signed a agreement. You don't change the rules because it suits you better. You can try. It won't fly though. Why waste your and their time?
Even with Section 3302, which resolves the conflict by itself, what kind of losses would a landlord suffer from your late payment, anyway? Since the mortgage payment is typically not due until the 15th of the month,(Pompous fool. NONE of My mortgage payments are due on the 15th. If they were how would the tenant paying me ON THE 15th make my payment good if my mortgage payment was auto deducted the morning of the 15th and the tenant doesn't pay me until the 15th at 9pm) if you paid by the 15th, he could pay his mortgage without having to dip into his personal savings at the rate of 27 cents per day [in the above example], and he would suffer absolutely no losses. Since the current savings interest rate is and has been for 20 years far below 10% rate, the landlord's actual loss starting the 15th would be his actual interest loss on the $1,000, of about 3 cents per day. The bank could tell him how much that is, if he can't use a calculator, so that amount is not difficult to assess.
Landlords like to wail and grieve over the extra time their property management company had to spend, pacing and gnashing its teeth over your late payment, including making special accounting reports, extra telephone calls, and sending late payment notices, none of which are timed or separately billed, so that such extra efforts are "impracticable nor extremely difficult to assess." Nice try, but no cigar. Property management companies are paid on a flat percentage of gross rents, usually 5%, so that they get the same amount of money and the landlord gets the same amount of money, whether you pay late or not. That is, if you paid a month late, the property management company would get their 5% of your late rent a month later, and your landlord would get is 95% of your late rent a month later. If the landlord uses a property management company, whatever extra work your late fee might cause them is already factored in, just like your actual utility costs when your utilities are included in your rent.
(My tenants are metered. They pay their own gas and electric. I pay for water.)
Illegal Late Fees? (by Doandl A [CA]) Posted on: Nov 16, 2007 5:32 AM Message:
Lois...please note that the article you read was quoted out of text. Please note the last paragraph below. From an article by the California Apartment Association: "FEES FOR LATE PAYMENT OF RENT AS LIQUIDATED DAMAGES Until a couple years ago, there was no reported case in California addressing “late fees” in the landlord/tenant context as liquidated damages subject to the requirements discussed above. In 2004, the Appellate Division of the Superior Court of Los Angeles, in Orozco v. Casimiro rejected the tenant’s argument that late fees are always void. 5 In this case a tenant who was assessed a late fee of $50 (on rent of $600/month) argued that a fixed late fee in a residential lease is always void because (1) late fees are only allowed when it is impracticable or extremely difficult to fix actual damages, (2) the landlord is entitled only to interest for late payment of rent; and (3) interest is not impracticable or extremely difficult to fix. The tenant also argued that even if the fees are allowed, the owner must plead and prove that the damages were impracticable or extremely difficult to fix, which he did not do in this case. The court rejected the tenant’s first argument that late fees are not impractical to fix because interest is the only damage allowed. The tenant’s argument was premised on Civil Code Section 3302, which states that “[t]he detriment caused by the breach of an obligation to pay money only, is deemed to be the amount due by the terms of the obligation, with interest thereon.” However, the court, citing a line of authority, including the bank fee case discussed above, ruled that the owner is also entitled to “administrative costs related to collecting and accounting for late payments.” Some tenant advocates continue to argue this point, however, the Orozco decision is consistent both with the line of cases interpreting various late fees in light of the liquidated damages statute. Despite the favorable ruling on the validity of late fees in rental agreements, generally, the court ultimately invalidated the fee at issue because the owner had failed to plead or prove that the damages were extremely difficult to fix. The court stated “[a]lthough respondent may have been able to present evidence below that would have shown in this particular case that damages resulting from the late payment of rent were impracticable or extremely difficult to fix, he did not do so.” Therefore the late fee was not entitled to the presumption of validity. 5 Orozco v. Casimiro, (2004) 122 Cal.App.4th Supp 7. Note that this is a decision of the Appellate Department of the Los Angeles Superior Court, not a Court of Appeals. Therefore it is not binding precedent." Illegal Late Fees? (by Rose [CA]) Posted on: Nov 16, 2007 9:33 AM Message:
I usually charge $50.00 to $60.00 late fee. I give a 5 day grace period and put in the rental agreement after 5 days the late charge. My average rent is $1650 per month. I have been fortunate to have had only one eviction in 20 years + and that was in Sonoma County years ago and the judge ignored the late fees and only gave my the back rent due. Illegal Late Fees? (by Lois [CA]) Posted on: Nov 16, 2007 9:53 AM Message:
Doandl A [CA] Thanks, I looked up the backgrounder pdf on the website caanet dot org. It seems I can go ahead and use the local LL Assn lease as written, but have to hope it is never challenged in court. I don't have a mortgage or a bookkeeper, so really wouldn't suffer much if rent is late a few days - at least, that's how the courts would see it. Illegal Late Fees? (by Josh [CA]) Posted on: Nov 16, 2007 10:06 AM Message:
Lois are your rentals in Rent control areas? Depending on your answer that could change the replies 180 degrees. Illegal Late Fees? (by Keith [MN]) Posted on: Nov 16, 2007 10:11 AM Message:
I wonder if you could argue that I could raise all my rents in order to exclude late fees. But to remain competitive I only charge those that cause me the extra labor to collect and process the late rent thereby keeping the rent down for those that pay on time. Illegal Late Fees? (by Josh [CA]) Posted on: Nov 16, 2007 10:13 AM Message:
Sean do you mean evicting for late fees only nothing else? I wouldn't go there personally. To me the late fees are to train the tenants to pay on time. When I go to court to evict I do so for non-payment of rent as in a month. I don't include the late fees in the 3 day of course. Illegal Late Fees? (by Lois [CA]) Posted on: Nov 16, 2007 10:13 AM Message:
Josh, Yes, in Oakland. The LL Assn lease is written specifically for Oakland Illegal Late Fees? (by SteveH [CA]) Posted on: Nov 16, 2007 3:20 PM Message:
Lois, I'm in Oakland as well. Attorneys with RHANAC in the past have generally recommended $25-$40 for late fees. The attorney I work with won't go over $30 unless you're talking about rents that are > than about $1500. Which association do you belong to? I'm not aware of an Oakland-specific lease. Also, I've justified late fees in court (and had the deductions upheld) due to the time and resources spent 1) issuing a 3-day notice to pay or quit 2) entering the data into mgmt. software 3) making phone calls to tenant 4) arranging to pick up rent 5) making an extra trip to the bank to deposit. Illegal Late Fees? (by Lois [CA]) Posted on: Nov 16, 2007 5:17 PM Message:
Hi SteveH The lease is from RHANAC and actually has a title on the top: Oakland Residential Tenancy Agreement. (Copyright PPMA 2006) Rent is $1560. Was thinking of charging $25 - $30. New tenant has excellent credit and recommendations. Illegal Late Fees? (by SteveH [CA]) Posted on: Nov 17, 2007 12:17 AM Message:
Hi Lois, Hope things go well with your new tenant. Thanks for the information on the Oakland agreement. Do you happen to know where to access this? I checked on the RHANAC site and also on CAA but didn't see it. Anyway, if you can steer me in the right direction I'd appreciate it as now I'm too curious to wait until Monday to call. Illegal Late Fees? (by Lois [CA]) Posted on: Nov 17, 2007 2:13 PM Message: I got the Oakland lease by mail directly from RHANAC last year. However, they do not have any more right now because they are waiting for pending legislation to shake out before they revise or reprint it. Please do call them on Mon. and nudge them to reprint it now.