Are late fees consisting of 10% of rent per month, per day legal?

March 20, 2006 6:58 PM

Is my friends landlord charging him a legal late fee?

My friend has just told me that his landlord charges him 10% of his monthly rent each day after the first of the month the check is late. I think that there is no way this can be legal, and his slumlord is an asshole. I've checked Rhode Island general law, and I can't find anything specifally about "late fees". Does anyone know if that sort of exorbitant fee is legal?

posted by SweetJesus to law & government (14 comments total)

What does the lease say? Does he have a copy of it? 10% of the rent per day seems to break a bunch of usury laws, but the easiest way out of this would be if this arrangement wasn't in the lease.

I'm a landlord, and we charge a flat fixed fee for a late payment. Nothing per day, and not percentage based.
posted by visual mechanic at 7:03 PM on March 20, 2006

Rhode Island usury law. 12% per year.
posted by acoutu at 7:10 PM on March 20, 2006

This boilerplate lease for Rhode Island specifies a one time fixed fee for late payment.

This page says, " in Rhode Island, you can`t even send a late rent notice until the payment is at 15 days late" and also that a late fee (in general, not specifically Rhode Island) can be charged "only if a provision of the lease or rental agreement addresses it, and state law permits it. If nothing in writing specifies the late fee and its amount, the landlord can`t later decide they want to collect a late fee."

So check that lease, that's the first line of defense. But I'm guessing that a call to either of the non-profit organizations below will help out too:

Coalition for Consumer Justice (521-1534)
145 Waterman Street, Providence, RI 02906
(provides tenant Information)

Housing Hotline
10 B Collins Street (846-4896)
P.O. Box 3833, Newport, RI 02840
(provides housing information, problem solving, and advocacy asst.)
posted by visual mechanic at 7:16 PM on March 20, 2006

There's almost no way this is legal. Here's a HUD page on Landlard-Tenant law in RI. IANAL, but I would think this would be classified as an unlawful increase in rent.

However, browsing the site I linked leads me to believe it's relatively easy to evict tenants (as compared to NYC, where I live, and where it's very difficult), so he should make an effort to pay the rent--not this ridiculous late fee--on time or close to on time.
posted by lackutrol at 7:21 PM on March 20, 2006

Why doesn't your friend pay the rent on time? If its DUE on the 1st of the month why doesn't your friend send it in 5 days BEFORE its due?

He does. He mentioned it along the lines of "I've got to get my rent check in by Friday, or I've got to pay my landlord 60 bucks". I said "Why the hell do you have to pay him an extra 60 bucks", and here we are...

I am of the mindset that if my landlord is breaking one law, he's breaking another, and I wouldn't want to live there. How about you?

I thought that paying the rent on time was a good idea

And i thought that limiting your answers to the fucking question was a good idea, but I guess we're both wrong.
posted by SweetJesus at 8:05 PM on March 20, 2006

Also, thank you visual mechanic and acoutu. I just wanted him to know that it was illegal, in-case it ever came up. I've had some spats with landlords in the past, and it struck me as just completely illegal.
posted by SweetJesus at 8:14 PM on March 20, 2006

I am of the mindset that if my landlord is breaking one law, he's breaking another, and I wouldn't want to live there.

Well, he did say Rhode Island, were the supreme court judges write personal letters of recommendation for the parole hearings of organized crime kingpins and the mayor had uniformed police officers kidnap and torture his wife's lover.
posted by StickyCarpet at 8:35 PM on March 20, 2006

Well, he did say Rhode Island, were the supreme court judges write personal letters of recommendation for the parole hearings of organized crime kingpins and the mayor had uniformed police officers kidnap and torture his wife's lover.

I miss Buddy. There's just something charming about a guy who can kidnap someone with his Statie escorts, piss on him, and put a cigar out in his eye for messing with his woman, and in the next second be on TV demonstrating how he grills the onions for the Mayor's Sauce...

Guess you had to be there...
posted by SweetJesus at 8:50 PM on March 20, 2006

The vibe I get from RI folks is that Buddy never bothered to hide anything very much and managed to make sure the trains ran on time or whatever when he wasn't arranging for people to have "accidents."
posted by beaucoupkevin at 9:25 PM on March 20, 2006

Trolls.... who needs them.

At any rate, this is an interesting post. My old landlord was a Nazi about the rent being in exactly on the 1st of the month. I was one day late twice in 5 years and was threatened with legal action and fees both times. Some people need to chill out.
posted by blueplasticfish at 11:43 PM on March 20, 2006

[a few comments removed, please try to answer the "is this legal" question or take it to email or metatalk]
posted by jessamyn at 4:21 AM on March 21, 2006

I don't think either of the answers marked are correct. Standard legal boilerplate applies (I am a lawyer, but not your lawyer, this is not legal advice, I'm not licensed in RI, etc.).

The usury law is almost certainly inapplicable. I haven't checked RI case law, but according to American Jurisprudence, "[a] lease is neither a loan nor a forbearance subject to the usury statutes." 45 Am.Jur. 2d Interest and Usury § 130 (1999). See this decision from ND, which is online for free.

Second, the 15-day notice period mentioned above is for eviction for non-payment of rent, not for late charges. The RI Residential Landlord-Tenant Act does not address late fees, which likely means that if the 10% late fee is stated in the lease, it is likely legal, unless your friend can argue that it is unconscionable under Section 34-18-13.
posted by fochsenhirt at 8:49 AM on March 21, 2006

If he were to pay 5 days early every month, that's 60 days total each year, or 16.4% of the year. At our present prime interest rate (about 5.5% depending on the time of day! :D), $600 monthly generates $167.31 of interest yearly. 16.4% of that interest is $27.44. Or, at least that's my best guess. I (just about) failed that math class.

When your landlord is being this much of a jerk, would you want to hand him a gift of $27.44 each year? That's what you're doing if you pay 5 days early each month!
posted by shepd at 9:55 AM on March 21, 2006

Second, the 15-day notice period mentioned above is for eviction for non-payment of rent, not for late charges. The RI Residential Landlord-Tenant Act does not address late fees, which likely means that if the 10% late fee is stated in the lease, it is likely legal, unless your friend can argue that it is unconscionable under Section 34-18-13.

This is purely academic, but couldn't he argue that such a fee is in-fact an unlawful rent increase? It seems to me that charging 100% interest after 1/3 of the rental period is unconscionable and unreasonable, at least from my standpoint.

Ultimately, this was mostly for my edification. I know the guy is a scumlord (nothing screams slumlord louder than "Murphy Bed" and always-on, uncontrolable heat), I just wanted to reinforce this to my friend. He's getting screwed on a few fronts, and this happened to be an easy one to prove to him.
posted by SweetJesus at 11:37 AM on March 21, 2006