Being a landlord can feel like a never-ending game of cat and mouse, especially when it comes to chasing down tenants for late rent.
You’re not alone if you’ve been left exhausted by this monthly dance of avoid-the-landlord.
Many landlords enforce a late rent fee as a deterrent, and it often works. But it’s not as simple as plucking a dollar amount from thin air.
For those of us in the beautiful state of California, there are a host of laws, regulations, and limitations in place when it comes to how much you can charge for late rent.
Yes, even golden sunshine and coastal breezes come with a side of red tape!
By the end of this article, you’ll understand the complexities and legalities of charging tenants for late rent in California and how much you can ultimately charge your late-paying tenants.
How Much Can California Landlords Charge in Late Rent Fees?
Generally speaking, California landlords can charge 5% to 10% of the monthly rent as a late fee. However, tenants can challenge the late fee, especially if it is above 5% in court.
According to California Civil Code Section 1671, late rent fees must be reasonable and reflect the actual costs incurred by the landlord as a result of the late payment. This means that landlords cannot charge excessive late fees that are disproportionate to the actual costs incurred.
Additionally, landlords must include a late fee provision in the rental agreement in order to charge late fees. The provision must specify the amount of the late fee, the date on which it will be charged, and any other relevant details.
It is important for landlords to understand the laws and guidelines surrounding late rent fees in California to avoid any legal issues or disputes with tenants.
Hiring a property management company can help landlords stay up-to-date on these laws and ensure that their rental agreements are legally sound.
Bounced Check Fees
While the California government does not set a fee for late rent, they do set an amount landlords can charge for bounced rent checks.
A landlord can charge a tenant $25 for a bounced check and $35 for each additional bounced check after.
How to Charge a Late Fee for Rent in California
California law allows landlords to charge a late fee if specified in the lease agreement.
The lease agreement must state the amount of the late fee and the date on which it will be charged. The landlord cannot charge one if the lease agreement does not specify a late fee.
Remember, the late fee must not exceed 10% of the monthly rent.
When writing a lease for a new tenant, make sure that they understand that the late fee is determined in the lease and that they agree to it.
You don’t want to be left with any surprises or complications when you charge your agreed-upon fee for late rent.
Allowing a Grace Period
A grace period in a lease is a specified amount of time after the rent due date, during which a tenant can pay rent without incurring any late fees or penalties.
For example, if a tenant’s rent is due on the first of the month and the lease includes a five-day grace period, the tenant would have until the fifth of the month to pay rent without any late fees. If the tenant pays on the sixth of the month, they would likely be charged a late fee according to the terms of the lease.
It’s important to note that state law does not require landlords to offer a grace period in their lease agreements. However, a grace period in the lease must be clearly stated and cannot be shorter than three days.
What Happens if a Landlord Charges a High Late Rent Fee in California?
Charging too much for late rent in California can result in legal consequences for the landlord. If a landlord charges more than the legal limit, the tenant can take legal action against the landlord.
In addition to legal consequences, charging too much for late rent can also damage the landlord-tenant relationship.
Tenants may become resentful and less likely to pay rent on time in the future. It is important for landlords to follow the late rent fee laws to maintain a positive relationship with their tenants.
When Can California Landlords Evict a Late-Paying Tenant?
Under California law, a landlord can start the eviction process when a tenant fails to pay rent on time.
The landlord must first give the tenant a three-day notice to pay rent or quit. This notice must be in writing and must specify the amount of rent owed. If the tenant does not pay the rent within three days, the landlord can file an unlawful detainer lawsuit to evict the tenant.
It is important to note that a landlord cannot start the eviction process until the rent is actually late.
If the tenant has a grace period for paying rent, the landlord cannot start the eviction process until that grace period has passed.
Landlord also cannot proceed with the eviction process if the tenant pays the rent before the three days eviction notice has expired.
Avoid Legal Troubles and Late-Paying Tenants with Lotus Property Services
California landlords must juggle a ton of information. From knowing local restrictions and state regulations to ensuring tenants are happy to maintaining the value of your rental property, it’s a lot to keep track of.
One of the most effective ways to successfully manage your California rental property while maximizing your ROI and avoiding legal troubles and bad tenants is by working with a property management company like Lotus Property Services.
Our expert team of multilingual real estate professionals ensures your property is in excellent condition, tenants pay rent on time, and your rental business is in compliance with California laws.
Never fret about overcharging in late rent fees or collecting late rent at all, for that matter. With Lotus Property Services, we’ll handle everything to keep your California rental property running smoothly so you can cash your rental checks each month – on time!
Request a free rental analysis to see how much your California rental property can earn each month today!