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Old 08-15-2014, 08:41 AM
 
15,765 posts, read 12,314,385 times
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Quote:
Originally Posted by blu4u View Post
What state are you in? I don't believe that LLs are allowed to tack on unpaid late fees to the lease specified monthly rent. Yes you own the late fee if your rent was late. But if your following monthly rent was paid for lease specificed amount on time the LL can not claim that rent was "late". Late fees and monthly contracted are two different charges. Today write a check for the orignal late fee. Send it now don't wait for next mont's rent to be due. Write a letter expaling that your rent for XX month paid in full and on time and no late fee is due for XX month. Send it now don't wait for next mont's rent to be due This month write a spreate check for the monthly contracted rent amount. Sounds like a case where land lord doesn't understand simple account methods assoicated with rental income.
Many leases have a clause in them that allows the landlord to apply any payment to past due bills, late fees included, regardless of how the payment was designated by the tenant.

If your lease has such a clause, there is no escape for you since the landlord could apply a portion of the next month's "rent" check to cover the late fee, and the remainder applied towards rent. Since that "remainder" was less than the rent due that month, you technically didn't pay that rent in full and on time, thus incurring another late fee.

The only way out of this late fee "cascade" is to pay off ALL the late fees, and CONFIRM that all the payments were applied before ANY other rent or bills come due, bringing your balance to zero. Subsequently, pay everything in full and on time to avoid late fees.

If you are about to have some other thing come due, you should pay off all the late fees PLUS a late fee on the new bill, just in case, in order to escape the "late fee trap".
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Old 08-15-2014, 09:00 AM
 
15,765 posts, read 12,314,385 times
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Quote:
Originally Posted by blu4u View Post
What you're doing is considered usury.
A lease is a binding contract between consenting adults, so unless the relevant clause is in violation of applicable law(s), it stands.
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Old 08-15-2014, 09:02 AM
 
8,797 posts, read 7,624,933 times
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Quote:
Originally Posted by blu4u View Post
What you're doing is considered usury.
Caused by the tenant who was negligent on paying what they owe
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Old 08-15-2014, 09:07 AM
 
Location: Boise, ID
8,047 posts, read 26,428,218 times
Reputation: 9396
Quote:
Originally Posted by blu4u View Post
What you're doing is considered usury.
We have that clause in our lease, and it was our rental attorney who suggested we add it. All payments go first to any outstanding fees/utilities/whatever, and lastly to rent. So a tenant who doesn't pay enough to cover rent and late fees is short on rent, not short on late fees.

Not only can we charge more late fees, we can evict for it, as well.
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Old 08-15-2014, 09:42 AM
 
300 posts, read 392,813 times
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Quote:
Originally Posted by Lacerta View Post
We have that clause in our lease, and it was our rental attorney who suggested we add it. All payments go first to any outstanding fees/utilities/whatever, and lastly to rent. So a tenant who doesn't pay enough to cover rent and late fees is short on rent, not short on late fees.

Not only can we charge more late fees, we can evict for it, as well.
What country do you rent in?

Assuming you are not a financial instuition registered with the OCC, and assuming that your "late fees" exceed the mandated interest rate celling, your cascading "late charges" are usury. Possibly even RICO extortion if you rent to a percentage of native americans, or households receiving federal benefits (like SS).

Since your lease contract contains an illegal provision, the entire contract is void.

How exactly do you report earned/accured late charges on your federal tax return?

I would double check before trying to enforce or evict. A savvy tenant will prevail and you will loose in both civil and criminal court.

The good new is that if you can prove that you drafted the contract upon the advice of your attorney, you can probably nail him/her for malpractice.

Last edited by blu4u; 08-15-2014 at 09:53 AM..
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Old 08-15-2014, 01:55 PM
 
Location: Boise, ID
8,047 posts, read 26,428,218 times
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Quote:
Originally Posted by blu4u View Post
What country do you rent in?

Assuming you are not a financial instuition registered with the OCC, and assuming that your "late fees" exceed the mandated interest rate celling, your cascading "late charges" are usury. Possibly even RICO extortion if you rent to a percentage of native americans, or households receiving federal benefits (like SS).

Since your lease contract contains an illegal provision, the entire contract is void.

How exactly do you report earned/accured late charges on your federal tax return?

I would double check before trying to enforce or evict. A savvy tenant will prevail and you will loose in both civil and criminal court.

The good new is that if you can prove that you drafted the contract upon the advice of your attorney, you can probably nail him/her for malpractice.
Actually, the clause has stood up in court many times for us, and we have evicted and obtained judgments based on it more than once, so I'm not terribly concerned, since several judges have agreed with the attorney and our lease. Maybe it is a big government conspiracy and my entire county has decided to ignore that law, maybe what you are describing is a local or state law rather than a federal law, or maybe you are just wrong. It has to be one of the 3.

Also, even if this clause was illegal, which it isn't, if I have a Severability clause, which I do, one bad clause does not make the entire lease void.
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Old 08-15-2014, 02:01 PM
 
300 posts, read 392,813 times
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Quote:
Originally Posted by Lacerta View Post
Actually, the clause has stood up in court many times for us, and we have evicted and obtained judgments based on it more than once, so I'm not terribly concerned, since several judges have agreed with the attorney and our lease. Maybe it is a big government conspiracy and my entire county has decided to ignore that law, maybe what you are describing is a local or state law rather than a federal law, or maybe you are just wrong. It has to be one of the 3.

Also, even if this clause was illegal, which it isn't, if I have a Severability clause, which I do, one bad clause does not make the entire lease void.
You've been lucky. Did you tenants appear represented? Did they present evidence of timley payments and cascading late fees? Did they appear at all? Did they cite Federal regulation AA? Did they offer cascading late fees as evidence? Are the accumulated late fees n exccess of 25% of the monthly payment. I take back my comment that you maybe able to put the fault on yur attyn. In a recent NYS case (aug 11, 2014), both the lawyer and owner were indicted. Better get your contracts reviewed ASAP.

Last edited by blu4u; 08-15-2014 at 02:14 PM..
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Old 08-15-2014, 03:21 PM
 
Location: Boise, ID
8,047 posts, read 26,428,218 times
Reputation: 9396
Quote:
Originally Posted by blu4u View Post
You've been lucky. Did you tenants appear represented? Did they present evidence of timley payments and cascading late fees? Did they appear at all? Did they cite Federal regulation AA? Did they offer cascading late fees as evidence? Are the accumulated late fees n exccess of 25% of the monthly payment. I take back my comment that you maybe able to put the fault on yur attyn. In a recent NYS case (aug 11, 2014), both the lawyer and owner were indicted. Better get your contracts reviewed ASAP.
In more than 14 years I've been here and close to 30 years my bosses have been doing property management, we've never had a tenant get representation for an eviction, and they can't have an attorney for small claims for a judgment. The tenants themselves show up about half the time. Sometimes they fight it. We've always won. Idaho is extremely landlord friendly.
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Old 08-15-2014, 03:53 PM
 
300 posts, read 392,813 times
Reputation: 218
So you count on tenants now know their rights? Just because the tennant cant bring a lawyer to court, doesn't mean that they aren't allowed representation or can't consult with one before hand. Do you tell the tenants that they can have representation? With all the current cases and findings against contracts with cascading late fees, I would say it's just a matter of time.
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Old 08-15-2014, 03:57 PM
 
Location: Denver CO
23,946 posts, read 15,632,256 times
Reputation: 37521
Quote:
Originally Posted by blu4u View Post
You've been lucky. Did you tenants appear represented? Did they present evidence of timley payments and cascading late fees? Did they appear at all? Did they cite Federal regulation AA? Did they offer cascading late fees as evidence? Are the accumulated late fees n exccess of 25% of the monthly payment. I take back my comment that you maybe able to put the fault on yur attyn. In a recent NYS case (aug 11, 2014), both the lawyer and owner were indicted. Better get your contracts reviewed ASAP.
Usary laws apply to borrowed money, not late fees on rent.

And if you are referencing the Carey Vaughn Brown case, that involves payday lenders - borrowed money. Not rentals, not late fees and not applicable to the discussion here.
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