Can I Charge Late Fees?
We have received several inquiries regarding whether late fees or charges may be assessed on late rental payments. For the period beginning with July, 2021, late fees or charges may be charged, however, there are a number of limitations. Here are the general considerations regarding late fees or charges:
- From the beginning of the pandemic in March, 2020, late charges were prohibited by Governor’s Executive Orders. Those Executive Orders expired on June 24, 2021. Thus, no late fee can be assessed for the period prior to June 24, 2021.
- Late charges can be assessed if the rent is more than 10 days late;
- The amount of the late fee may not exceed 3% of the amount of the monthly rent;
- Late fees may only be assessed if the lease or rules and regulations provide for the payment of the late fees;
- Landlords who have accepted ERAP payments on behalf of their tenants may not seek to recover late fees from tenants on whose behalf the ERAP payment was made;
- Late fees may not be compounded, are not considered “additional rent” and cannot be recovered as part of an eviction action.
- Late fees accrued after the period for which ERAP payments were made may be recovered, but in a separate action.