Questions about late fees

[Rpm Property Management]

Hi guys! So happy to have found his forum. This is my first post.

My wife and I have been managing our own propeties for the 3 years and have had great success. We recently started managing propeties for a few other friends and might consider taking on a few more clients and making this more of a full time situation for us.

On to my questions 😊

I recently had a Tennant's check bounce. His rent was on time originally, but after the check bounced and the client paid his rent it was 13 days late. I charged him a bounced check fee and requested that his rent now had to be direct deposited or in the form of a money order. I did not charge him a late fee however. I might take this a case by case basis, but do you think I should have charged him a late fee? I charge $25.00 per day late rent. Should that fee have reverted back to the day rent would have originally been late?

The second question has to do with late rent and paying my clients.

If I don't have a tenants rent by the time I need to pay the owner, do I still pay the owner on time or do I wait until I get the rent? What about the late fees associated with the late rent? Does the owner get that or do I keep it for my troubles? I do have a window of time to allow to get the rent and pay the owners, but I know at some point this will come up.

Thank you so much for the help!!!

[Anthonyacat]

On the first question, I don't believe any of this is legal. Pretty sure you're not allowed to charge late fees or interest on residential tenancy late payments, at all. I say pretty sure, because I was certain until I tried to find a reference to it in the Residential Tenancies Act just then, and couldn't. But I'm sure someone else will come cite a case or point us to the correct law.

The second question is easier - you don't pay the owner before you get paid, unless your contract explicitly states you will. But by the way your post sounds, it feels like you probably don't have a written contract at all?

Managing your own properties is great. Managing them illegally is bad, but not exactly major in the grand scheme of things, especially if you change once you know. But what you 100% want to avoid is managing other people's properties illegally. If you're going to start a property management business, get some serious training. You need to know these laws.

EDIT: Found a source for the "no late fees" thing: http://www.landlords.co.nz/ask-an-ex...late-rent-2296

The Act states that any requirement of a tenant to pay a ... penalty as a result of a breach of a tenant’s obligations under the Act shall be of no effect.



EDIT AGAIN: Found it.
32Accelerated rent or damages prohibited

• (1)Any provision in a tenancy agreement to the effect that, on breach by the tenant of any term of the agreement or of any of the provisions of this Act or of any other enactment, the tenant shall be liable to pay—
  • (a)the whole or any part of the rent remaining payable under the agreement; or
  
  
  • (b)rent of an increased amount; or
  
  
  • (c)a sum specified in the agreement by way of damages or penalty,—
  
  shall be of no effect.
  
  (2)Any provision in a tenancy agreement to the effect that, if the tenant does not breach any term of the agreement or any of the provisions of this Act or of any other enactment, the rent shall or may be reduced or the tenant shall or may be granted or paid a rebate, refund, or other benefit, shall be construed as entitling the tenant to that reduction, rebate, refund, or other benefit in any event.
  
  (3)This section does not preclude a provision in a tenancy agreement requiring one party (the debtor) to reimburse the other party (the creditor) for any reasonable expenses or commissions paid or incurred by the creditor in recovering, or attempting to recover, any overdue payment that the debtor owes to the creditor under an order of the Tribunal.
  

[Bobsyouruncle]

Late fees apply to America. I am guessing RPM you are in the States. YOu need to post this in the US part of the forum but you will get better advice in a US based site.

[Glenn]

Hi guys! So happy to have found his forum. This is my first post.

My wife and I have been managing our own propeties for the 3 years and have had great success. We recently started managing propeties for a few other friends and might consider taking on a few more clients and making this more of a full time situation for us.

On to my questions 

I recently had a Tennant's check bounce. His rent was on time originally, but after the check bounced and the client paid his rent it was 13 days late. I charged him a bounced check fee and requested that his rent now had to be direct deposited or in the form of a money order. I did not charge him a late fee however. I might take this a case by case basis, but do you think I should have charged him a late fee? I charge $25.00 per day late rent. Should that fee have reverted back to the day rent would have originally been late?

The second question has to do with late rent and paying my clients.

If I don't have a tenants rent by the time I need to pay the owner, do I still pay the owner on time or do I wait until I get the rent? What about the late fees associated with the late rent? Does the owner get that or do I keep it for my troubles? I do have a window of time to allow to get the rent and pay the owners, but I know at some point this will come up.

Thank you so much for the help!!!

I think Bob is on to it. You must be from USA. No one here spells cheque as a check.
But then I doubt anyone in the States spells Tenant as Tennant.
My advise regardless of where you live is do not give up your day job.

[Rpm Property Management]

You are both correct, in that I am from the States. Sorry for the mispelling of TENANT.

As humorous and snarky as your comment is, it is not helpful.

How do you spell **** off in Australia?

[Wayne]

Guys - it is in the USA forum - that should have been a bit of a hint.

I'd still say don't pay the owner money that you haven't received from the tenant.

[Eugene]

You are both correct, in that I am from the States. Sorry for the mispelling of TENANT.

As humorous and snarky as your comment is, it is not helpful.

How do you spell **** off in Australia?

That was low. You know this is New Zealand

[Wayne]

That was low. You know this is New Zealand

Same difference in the US - if it's outside of their state it doesn't really exist.

[Bobsyouruncle]

It wasn't in the USA forum mods must have moved it.

[Wayne]

It wasn't in the USA forum mods must have moved it.

Ah -tricky

[clivedonnovan7932]

Anthonyacat's answer was very helpful to me as well. Thanks!