Is it legal for a landlord to charge late fees?
With rent arrears one of the main concerns for landlords, it is understandable that many will try anything and everything to mitigate this financial risk.
This includes the charging of late fees if the tenant fails to pay their rent on time. But do these penalties actually work or does it place the tenant in further arrears? Solicitor and Head of GW LET, Rob Denman, considers both sides:
“A landlord is able to charge a tenant for a late rent payment, providing it was written into the original tenancy agreement. Landlords must ensure that any included clause clearly explains how much the penalties are – remember they must be reasonable - and when they are applicable. If they are not, your tenant may be able to reject the charge.
“Landlords should also make sure that any clauses surrounding late fees do not hinder their ability to prevent tenant eviction if it was ever required. Regularly accepting late payment could give the tenant a potential argument against eviction and delay any claim for possession.
“While there are cases where this kind of deterrent has helped landlord avoid rent arrears, it by no means offers any kind of guarantee. After all, if a tenant is unable to pay their rent on time are they actually even in a position where they can then afford a subsequent charge? It could even have a knock on effect on their ability to pay their rent the following month.
“In our experience regular communication from the offset of any new tenancy is essential in minimising the risk of rent arrears and the financial implications they can have. That way you are able to get to know your tenants and tackle any issues that arise directly.”
Content correct at time of publication