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Past Due Late Charges

I have a property in Maryland that I am renting out but I live in Tennessee due to a job relocation. I set up a bank account with a local bank just minutes down the road from the condo. My tenant can just deposit their rent directly into the account and the teller gives them a receipt. Their lease is up at the end of the month and they are not renewing their lease. For the most part they have been really good tenants - they keep the place clean and kept up and let me know in a timely manner if anything needs to be repaired. The issue is that they consistently pay their rent late. This past year they have been very late - not paying until the 15th of the month and sometimes even later. The lease clearly states that rent received after the 5th of the month will be charged a 5% late fee ($75). At first I would send them Demand Letters with the late fee charges added on but once I spoke with them I became fairly lenient about the situation. One of the tenants lost their job so I tried to be understanding with their financial situation. I stopped sending letters about a year ago because of this and paying late became the norm. They responded much better to my text messages. They paid the late fees twice. Then they stopped paying the late fees altogether - I now get the rent, but no late fees. There is only 1 month where they did not pay the entire rent due - about $300 less than what was due. All in all, the fees add up to about $900 in late fees plus the $300 in past due rent that was never paid. They paid me a deposit of $1450. Do I have a right to keep $1200 of their deposit for the past due late fees or do I need to refund the entire deposit because I never sent official letters?
1 Comment

This is a hard situation if they are good tenants, understanding goes a long way and if they are paying the rent ask them if it would be easier to change the pay date to the 15th for them. Make a deal and state that if they do this it will help them and you can adjust on your end, however if they default you will be forced to take action and even evict them. This will help them come to terms with the reality of the situation. Also let them know that you also need to pay on time and that you are charged late fees when a payment does not come through from them.  It seems like they are reasonable and this should help both of you. If/when the default follow through with your word. This is a business treat it like one
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