[Edit: The WI case permitted a $50 late fee. A $75 late fee was not found excessive in one owner’s Milwaukee County Cases. ]
Late fees and security deposits are two points of friction in housing.
A question was asked, ‘How much should I charge for late fees?’
The WI Court of Appeals that allowed a $50 late fee in 1993.
It is a Fair Housing violation to charge late fees to tenants that seek a reasonable accommodation based on a disability. A prime example is an SSI recipient who receives their check on the 3rd of the month. There are a number of federal cases that owners have lost because they were inflexible on this point.
We stopped charging late fees on April 1st, 2020, prior to the moratorium. We did not charge any late fees for July, despite it again being legal to do so for most tenancies. (It is illegal to charge late fees for CARES Act covered properties until August rent and illegal to charge late fees if you are receiving mortgage forbearance on a federally insured mortgage)
Normally we have a due on the first, late on the 5th policy. At the close of business on the 5th, we charge a $15 late fee. If the rent is still not paid by the 12th, there is an additional $35 late fee, for a maximum of $50 late fees in a month. Our staff can forgive one late fee per tenant per year without asking for permission. We also do not charge late fees for tenants who are on a payment schedule, for example, they pay twice a month to coincide with their payroll.
Per diem (daily) late fees are problematic and can violate usury laws. For example, a $25 a day late fee after the fifth is $625 if the tenant misses a month.
