Legal Question in Real Estate Law in California
Late rental fees
I currently rent a residential property for $1900 per month and in the lease there is a clause that allows the landlord to charge $30 per day if the rent is late. It is deemed to be late after the 4th day of the month. Are there any laws that stipulate how much a landlord can charge as a late fee? If so, what is the maximium? Can you also reference the statute that pertains to this topic?
2 Answers from Attorneys
Re: Late rental fees
Late fees are generally accepted as lawful in California if agreed to in advance by the tenant. However, there is a limit ..... if the fee is unreasonable, i.e. could not possibly be a measure of the landlord's actual damages (thus so-called 'liquidated damages') the fee might be rejected by a court. According to a respected treatise on landlord-tenant law, there is no reported (appellate) case where a late fee has been held excessive. Clearly, however, at some point a fee is excessive. See Civil Code section 1671, especially 1671(c)(2). Also, certain cities have rent-control laws which may further restrict late fees. There are specific limits that apply to mini-storage unit late fees.
Re: Late rental fees
Under Ca. Civil Code, the maximum a landlord can charge as a late fee is 5% of the monthly rental amount, which in your case would be $95.
Therfore, he could charge $30 per day for the first 3 days, $5 for the fourth day, and thats it.
Here is the code section.
1812.626. (a) The lessor may assess a late payment fee if the late
payment fee is specified in the rental-purchase agreement and is
permitted by this section.
(b) No fee shall be assessed for a payment which is less than
three days late if the rental-purchase agreement specifies weekly
periodic payments.
(c) No fee shall be assessed for a payment which is less than 7
days late if the rental-purchase agreement specifies longer than
weekly periodic payments.
(d) The lessor may assess more than one late fee for a particular
late payment if the total of all fees assessed for that late payment
does not exceed the maximum provided in subdivision (e). If the
maximum total late payment fee has been imposed for a particular
payment, no additional late payment fee may be imposed for that
payment.
(e) The total of all fees for a late payment shall not exceed the
lesser of 5 percent of the payment or five dollars ($5), except that
a minimum total fee of two dollars ($2) may be required.
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