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Late Rent Clause

I've been a landlord of just one duplex unit for many years, and the biggest problem I have is habitual late rent.   I'd like to add a clause about late rent in the late fees section on the lease agreement. I'd like to add something like:   Paying rent late more than 3 times during the term of the lease will be considered a breach of the lease and may result in an increase of the monthly rent due, or termination of the lease.  Any advise or experience with this problem would be appreciated.

How late is late? Good luck with increasing the rent due to late rent. Courts may look at it as a penalty. Why not just have a late fee = to 5-10%. In addition, serve them with a Notice to Pay or Quit when payment is late. . -----Disclaimer: Since I’ve been answering a lot of questions, I thought I would make the following statement. I’m not affiliated with EZlandlord Forms. I’m just here (not sure how long) to help those that have questions. Having 40+ yrs with Rental Property and done well, it’s my way of “Pay it Forward (check out the movie).” However, it is up to you to become familiar with your State/Local laws. I always like to know if the suggestions I offer are helpful. Feel free to comment anytime. Thanks in Advance
How late is late? Good luck with increasing the rent due to late rent. Courts may look at it as a penalty. Why not just have a late fee = to 5-10%. In addition, serve them with a Notice to Pay or Quit when payment is late. . -----Disclaimer: Since I’ve been answering a lot of questions, I thought I would make the following statement. I’m not affiliated with EZlandlord Forms. I’m just here (not sure how long) to help those that have questions. Having 40+ yrs with Rental Property and done well, it’s my way of “Pay it Forward (check out the movie).” However, it is up to you to become familiar with your State/Local laws. I always like to know if the suggestions I offer are helpful. Feel free to comment anytime. Thanks in Advance
I had a tenant that was late with rent more than ontime.  I charged a $50 late fee.  I was tired of her excuses.  I pointed out the portion of her lease that said if the rent was late it was a violation.  After a year I raised her rent and She moved out.  I have since rented it to a person that has always been on time and is a pleasure to have as a tenant.  ( I have even received a Thank You Card).  Your choice. Debbie B.  Florida
In California, can the lease agreement, along with stating: "If rent is not received in full by Owner by the third (3rd) day of the month, Resident agrees to pay a late payment of $50.00 in addition to the rent due", also follow up with something like "Consider the late payment fee automatically added to the balance due without a notice sent"? Or "without receiving a notice" ? Or could the first quote above include the words "automatically without notice to be paid ..." be inserted after the $50.00?  I too have a tenant that is fine, except that he pays his rent more often late than on time in these last 18 months of a lease. When I finally remind him, he reminds his secretary, and the payment is made almost immediately. He also lives out of state half the time, and doesn't occupy this high rise luxury rental everyday. My huisband and I own and manage this property on our own, and my husband hasn't wanted to charge him late fees. I wish we would have because then it might have solved the problem. Also it's been worth several hundreds of dollars (or more) I could have received. Now the tenant wants to renew his lease. So I want to add a clause, or addendum, or re-type the lease to include the late fee to be automatically considered charged without me having to ask him for a late fee.
If it's the secretary's job to pay the rent, why not send a reminder email every month?
I suppose I could ask him what his secretary's name and e-mail is and if he'd like for me to send his secretary a "please pay the rent" reminder e-mail each month. But why should I do that? It's one more thing for me to remember to do as if I'm taking care of more teenagers and reminding them to do their homework. I appreciate your suggestion, but will it solve the problem? Is it possible to include an addendum to a lease renewal stating that a late fee is to be automatically included in the late payment, without me having to send him a notice of a late fee added and to be included with the rent payment due?
@ Jeanelle: When does your lease expire or are you on a month-to-month?
Perhaps tell him to setup automatic bill pay with his bank so that he doesn't have to remember.  If he's got a secretary he must be doing pretty well for himself.
@Dawn and Bob: I had set up a savings account so he can deposit the rent into it since he's mosty out of town. (He had suggested doing that after being late about 3 times and had fed-exed the payment to me each time. I checked with a bank to see what my options were without outragious fees and costs to me. So then after receiving the deposit, I have it automatically transfered into my checking.) It works well except that he keeps forgetting to get the rent deposited on time. When I do e-mail him and remind him, he then gets it in by the end of the day, usually within a few hours. He should set up automatic deposit.  And I think I suggested it many months ago. I can suggest it again. He seems to be doing pretty well for himself, so I'm not worried about not getting paid. They're just late. And my husband didn't want to make a big deal about it and charge him late fees. The lease is up on Dec 2, 2012. He asked about another lease and I reminded him that he can hold over into a month-to-month, as the lease says. But he wants the assurance of a lease. So now he asks, "Can we do a one year extension with a one year option? I would like a 60 day out clause after the first 6 months". What does this mean? Does he want to only commit to us for 8 months, but us to commit to him for one year? And what does the one year option mean? He had previously told me that he used to have rentals and even rented to some of the Padre players in San Diego. So it seems he knows about leasing. He has been a good tenant for 2 years. That's good. I don't want to go through the work of cleaning and preparing and finding a new tenant, which usually takes 1-2 months, for this high-rise downtown condo. It costs us a lot everytime we have to change tenants. I was wondering if in the lease extention form that I could add that the $50 late fee is automatic, so expect to pay it with the late payment without me having to tell the tenant. (I'd say it some way more profesionally than that). And I have another bigger problem: we have been in the process of a loan modification for many months. So if it ends up that we don't own the unit anymore, what is our obligation to the tenant in the middle of a lease? Can I have a clause that addresses the release of obligation upon a change of ownership?
Jeanelle, you stated “And I have another bigger problem: we have been in the process of a loan modification for many months. So if it ends up that we don't own the unit anymore, what is our obligation to the tenant in the middle of a lease? Can I have a clause that addresses the release of obligation upon a change of ownership?”.........Are you saying that you may be selling the property?
@Bob: if, in many weeks, the loan modification doesn't come through favorably for us, my husband says that we might let the bank short sale it.
You need to talk with your Tax Person about short sales. According to the IRS, canceled debts usually are taxable income. If a lender releases a homeowner from a debt obligation, the homeowner has effectively earned income, which usually must be included on your tax return. Example: Suppose a you owe $100,000 on a property and finds a buyer who will pay $80,000. The lender agrees to accept the price and write off the remaining $20,000. The lender will send the former homeowner a Form 1099-C for the deficient amount of $20,000, which the IRS may consider taxable income…… The Mortgage Forgiveness Debt Relief Act applies to debts discharged between 2007 and 2012……. Also, short sales are difficult to close and make take 6-12 months to close. Banks are very slow in finalizing deals. If you’re still interested in your other questions, let me know. However, I feel you need to determine if you’re going to sell the property. -----Disclaimer: Since I’ve been answering a lot of questions, I thought I would make the following statement. I’m not affiliated with EZlandlord Forms. I’m just here (not sure how long) to help those that have questions. Having 40+ yrs with Rental Property and done well, it’s my way of “Pay it Forward (check out the movie).” However, it is up to you to become familiar with your State/Local laws. I always like to know if the suggestions I offer are helpful. Feel free to comment anytime. Thanks in Advance.
We won't sell on our own and then still have a balance due to the bank since the property won't sell for what is owed. So we wait for a loan modification answer from the bank. In the mean time, we rent. Is there a clause, which probably should have been in the original lease, that I can add to the lease renewal agreement that will deal with the issue of: if we sell or no longer own the property then the lease becomes void and both parties no longer have a lease obligation? I don't want the tenant to come back and say that we owe him if we sell or if the bank takes the property to short sale. If it takes so long for a bank to short sale, would they usually keep a tenant in place?
This will allow you or an Agent to show the property, etc………… ENTRY ON PREMISES: On not less than 24 hours advance notice, Tenant(s) must make premises available, at a time acceptable to Tenant during normal business hours for entry by Landlord or his/her Agent for the purpose of (1) Making decorations, necessary or agreed-on alterations, repairs or improvements; (2) Supplying necessary or agreed-on services; or (3) Showing the premises to prospective or actual purchasers, mortgagees, tenants, workers or contractors. In case of an emergency or Tenant's abandonment or surrender of the premises, Landlord or his/her Agent may enter the premises at any time without securing Tenant's prior permission…………If you have a long term lease, the new owner will have to honor it. However, new owner may require you to evict tenant prior to closing. No special verbiage is required on lease. . -----Disclaimer: Since I’ve been answering a lot of questions, I thought I would make the following statement. I’m not affiliated with EZlandlord Forms. I’m just here (not sure how long) to help those that have questions. Having 40+ yrs with Rental Property and done well, it’s my way of “Pay it Forward (check out the movie).” However, it is up to you to become familiar with your State/Local laws. I always like to know if the suggestions I offer are helpful. Feel free to comment anytime. Thanks in Advance.
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