10% Late Fee Excessive

April 9, 2012

LVT Number: #24036

Former tenant sued landlord to recover a security deposit and late fee payments totaling $5,000. Landlord claimed that tenant owed $1,944 in back rent. Tenant showed that he had paid a security deposit of $3,080 and late fees of more than $2,000 under a lease clause assessing a penalty of 10 percent of tenant's rent. The court ruled for tenant and against landlord. Landlord appealed and lost. The court's decision provided substantial justice to the parties. Tenant was entitled to the return of his security deposit.

Former tenant sued landlord to recover a security deposit and late fee payments totaling $5,000. Landlord claimed that tenant owed $1,944 in back rent. Tenant showed that he had paid a security deposit of $3,080 and late fees of more than $2,000 under a lease clause assessing a penalty of 10 percent of tenant's rent. The court ruled for tenant and against landlord. Landlord appealed and lost. The court's decision provided substantial justice to the parties. Tenant was entitled to the return of his security deposit. And a 10 percent late fee was unenforceable as a penalty since it was clearly disproportionate to any loss that landlord may have suffered by tenant's late payment.

Wilsdorf v. Fairfield Northport Harbor, LLC: NYLJ, 3/2/12, p. 24, col. 5 (App. T. 2 Dept.; Nicolai, PJ, Molia, Iannacci, JJ)

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