Could/would you charge £30 for late payment?

G_M

patman99 wrote: »

£12 seems to be the acceptable rate for late payment fees these days. However, if they are paying by direct debit, then a clause that states 'Any fees incurred when Direct Debit payments cannot be met will be passed-on to the tenant' might work.

Very few landlords have the facility to set up direct debit payments. And very few tenants would agree since the LL can alter the amount of a DD. Maybe you mean standing order though?

00ec25

consult the OFT guidance on unfair contract terms:

3.45 It is unfair to impose excessive sanctions for a breach of contract. A term that requires the tenant to pay more in compensation for a breach than a reasonable pre-estimate of the loss caused to the landlord is likely to be void as a penalty under common law. Other types of excessive sanction are considered in Chapter 4, Group 18(c).



3.46 We regard a requirement to pay unreasonable interest on arrears of rent, at a rate substantially above the clearing banks' base rates, as an unfair penalty. We regard the imposition of a fixed daily or monthly charge for overdue rent, and regardless of the amount due or the surrounding circumstances, as being penal rather than compensatory in nature, and unfair. Tenants would have to pay more than the cost of making up the deficit caused by their default.

remember however the OFT guidance re AST contracts is not (yet) law but a smart defence lawyer would use it to their advantage to cite your charge as being penal

Tiddlywinks

jones12 wrote: »

Just discovered that since last year June they still owe over a months rent.

Why have you only just discovered that a payment from mid last year is overdue? That's pretty shoddy record keeping isn't it?

You have a professional relationship with your tenant (like it or not, it's a fact) so you should make it your business to keep on top of things and know what is allowed and what is not.

sarahevie

i'm interested in the pain if they stay/pain if they go line.

surely it would be better to get rid and choose more reliable tenants?

I was very worried about a void last year, stuck with same tenants for two years assuming 'better the devil you know'- they were consistent late payers, but eventually paid.

However, finally gave them notice after they spoke to me like I was some dirt on their shoe, rent was at that point 3 months overdue.

Now have dream tenants, but I did better checks on them, made them jump through a few hoops before I would grant them a tenancy. Basically learnt from previous sloppiness

Soniclord

sarahevie wrote: »

Now I have dream tenants, but I did better checks on them, made them jump through a few hoops before I would grant them a tenancy. Basically learnt from previous sloppiness

Well I hope just because you had bad tenants previously that you didn't take out the anger you felt for the previous tenants out on your new 'dream' tenants. As that would just be unfair. Also I hope you didn't make them jump through too many hoops because they weren't the ones that messed you around.

Obviously do some checks on them but don't be too harsh or it will come back to haunt you in the future.

Just my take on what you said. Others opinions will differ.

<sebb>

If they haven't got enough to pay the rent, what makes you think they'll willingly pay up £30 for a late payment without a court order.

Surely serving notice would act as a greater dis-incentive to paying the rent late than imposing a penalty you are unlikely to ever get.

sonastin

In my (layman's) understanding of English law, including a penalty clause in a contract specifically to deter the other party from breaching that contract is not allowed. The only "penalty" you can impose is one that puts you in the position you would have been in if they hadn't breached the contract. So interest is permitted because it covers the interest you've lost on not having that money in your account. Similarly, the admin costs that arise simply because they were late paying are permissible. £30 seems excessive as an admin cost, particularly as so far you haven't actually done any additional admin in response to their rent arrears.