“Am I allowed to add additional tenant late fees?”
November 21, 2024
*Please note: Any questions regarding Legal Hotline Spotlights should be submitted via the Virginia REALTORS® Legal Hotline. Our attorneys are unable to respond to questions through our comments section.
Q: We have several tenants that are habitually late in paying their rent. To discourage repeated lateness, we would like to add a provision to the lease that would impose a flat charge of $100 for every three late payments in addition to the 10% late charge each month. We would also like to add a 20% late fee to any outstanding balance left at the end of a lease term. Would these terms be enforceable?
A: Those proposed terms would not be enforceable in a lease agreement. The VRLTA states that a landlord shall not charge a tenant for late payment of rent unless such charge is provided for in the written rental agreement, and no such late charge shall exceed the lesser of 10% of the periodic rent or 10% of the remaining balance due. So, while administering late penalties is certainly acceptable, that 10% threshold cannot be exceeded even for tenants with habitual late payments. The same rules apply at the end of the lease term as well. So, the late fee structure proposed in the question would not be enforceable.
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