When Can Landlord Collect Late Fee?

February 1, 1996

LVT Number: 10356

Landlord asked the DHCR when late fees could be collected from rent-stabilized tenants. In an opinion letter, the DHCR stated that for the collection of late fees to be valid, landlord must show that the collection of late fees was a base date practice and that the lease clause providing for such fees was lawfully included in tenant's vacancy and all renewal leases. In addition, the amount of late fees must be reasonable. The DHCR has considered reasonable a late fee equaling 5 percent of tenant's monthly rent. Fees of $10 and $20 have been upheld by the DHCR or courts.

Landlord asked the DHCR when late fees could be collected from rent-stabilized tenants. In an opinion letter, the DHCR stated that for the collection of late fees to be valid, landlord must show that the collection of late fees was a base date practice and that the lease clause providing for such fees was lawfully included in tenant's vacancy and all renewal leases. In addition, the amount of late fees must be reasonable. The DHCR has considered reasonable a late fee equaling 5 percent of tenant's monthly rent. Fees of $10 and $20 have been upheld by the DHCR or courts. The DHCR also pointed out that courts have generally ruled that landlords must give tenants until at least the 10th of the month to pay the rent before imposing a late fee.

DHCR Opin. Ltr. by Nathaniel Geller (3/17/95)

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