Can Landlord Charge Late Fees After Tenant Has Moved Out?
UPDATED: June 19, 2018
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This is a contractual issue. A lease at its heart, a contract; that means that both parties (landlord and tenant) are bound by the terms and conditions they agreed to when executing or signing the lease. Therefore, whatever late fee(s) are in the lease will usually be upheld; and it also means that the landlord cannot charge you more in late fees than is in the lease. The lesson here is to not sign a lease containing any term with which you disagree or are not prepared to honor.
In regards to charging late fees after a tenant has moved out, “moving out” is itself irrelevant. Remember, a lease is a contract; if there is rent due and it is paid late, the landlord may charge a late fee pursuant to lease terms, regardless of the tenant’s residency or occupancy. For example:
Suppose a lease ends December 31st, and rent for that last month was due December 5th. Suppose further that the late fee is a cumulative one: $5.00 per day late. If the tenant forgot or failed to pay and moved out on the 31st, he’d already owes 26 days x $5.00 = $130.00 in late fees. If he still doesn’t pay, that amount owed will keep going up by $5.00 per day, even though the tenant no longer lives there.
As you can imagine, this can amount to a large sum in the event of breach of a lease. For another example, suppose that each month the rent is paid late, the tenant owes $100.00. If the tenant breached his lease and moved out 8 months early, he would owe $800.00 in late fees.
As noted, the obligation to pay the late fees will continue past the end of a tenant’s occupancy.
There are certain limited circumstances when a late fee may not be enforceable—for example, if a landlord discriminates on an illegal ground to whom he charges late fees; if the landlord made it impossible to pay the rent on time, such as by closing its office so it couldn’t receive the rent; or arguably in certain cases, if the fee is grossly excessive and the tenant was sufficiently powerless that he had no choice but to agree to it. Also, if the late fee was not disclosed properly when the lease was signed, it might be unenforceable or possibly even give rise to a fraud claim against the landlord. If you think one of these situations may apply, you should consult with an attorney.
Otherwise, fees agreed and contracted to between the landlord and tenant are enforceable.