Demetree Real Estate Blog

Better Late Than Never: The Art of Collecting Late Fees

[fa icon="calendar"] 03.16.2017 / by Jessica Feurtado


Late payments happen. As a landlord, you probably already know this, but what you might not know is just how you should handle these situations. There is an art to collecting late fees and protecting yourself and your business from possible litigation (or just sour tenants).

Here are some tips for collecting late fees:

Spell it Out in the Lease

Your first line of defense when it comes to collecting late fees is to follow the lease terms. If you don’t include any mention of a late penalty or a specific date and time that rent is due, you have no legal recourse when it comes to collecting a late payment.

Your lease should always include the following items:

  • A clear definition of when rent is due each month
  • A clause that allows for a grace period and when the late fee will be charged
  • A clear statement as to what the penalty for late payment will be (what amount or percentage of the rent)
  • What is an acceptable excuse for late payment (check getting lost, processing error, etc.)

Be Consistent

They say the best leaders lead by example. If you want your tenants to be consistent with their payments, you need to be consistent with your rules. Even your best tenant has the possibility of being late, but you can’t make exceptions. No matter how legitimate their excuse is, you can’t let one tenant slide without letting them all slide.

Being consistent with your policies will let your tenants know that you take them seriously and there will be penalties whenever a violation occurs. Exceptions are like potato chips; you can’t make just one.

Give Them the Benefit of the Doubt

Of course, it’s always frustrating when someone misses a payment, but it’s important to remain professional and give them the benefit of the doubt. Don’t lose your temper or make accusations and NEVER threaten to cut off utilities or evict them. This will only hurt the relationship and won’t get the payment any faster. It might even motivate your tenant to make things more difficult for you in the future.

As stated above, you have to set the example and be as accommodating as possible while still enforcing your policies. Besides, if you end up taking it to court, making threats or personal attacks will not make you look good.

Late Rent is Better Than No Rent

No matter how clear your lease is, some tenants are bound to be late. They might even be late multiple times. Fortunately, there are steps you can take to keep this to a minimum and ensure you eventually get your money back. By being clear in your lease, not making exceptions and always acting professionally, you can protect yourself and your business from late-paying tenants.


Topics: Property Management

Jessica Feurtado

Written by Jessica Feurtado

Jessica Feurtado is a Property Manager for Demetree Real Estate Services. She currently manages a portfolio of 13 commercial assets and assists in the management of an additional 12 retail and office properties spanning from Miami, FL to Jacksonville, FL. She has several years of experience in property management and customer service.