Legislative committee blocks rule prohibiting landlords from charging late fees on rent
The ban on late fees was determined to be “arbitrary and capricious” yesterday morning by the Joint Committee for Review of Administrative Rules, on a 6-4 vote, and therefore unenforceable.
Important Note:
If your property or tenant is subject to the CARES act you cannot charge late fees until after July 24th, 2020.
Just because you can charge late fees, does not mean you should charge late fees, without exception. Discretion should be given to tenants that are facing hardships.
Think of this like the speed limit. The sign says 70 and you usually do 75 to reach your goal a bit sooner. But trying to even do even close to the limit in a blizzard may well have the opposite effect. We could see an economic blizzard later this year.
The purpose of late fees is to encourage on-time payments by those who can pay, it is not to penalize those who are facing hardships.
My company did not charge late fees in April, even though the moratorium did not exist then, because anxiety was high for tenants.
Even though we can again charge fees, our company will waive late fees for tenants that can provide proof they have not received their unemployment checks or are waiting on WRAP, etc.
We have a list of resources for tenants facing hardship due to COVID or otherwise that you can share with your tenants if you wish.
