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  • Late Fee's

    I'm curious on what you guys have for late fee policy's. I'm In California, and recently started managing this facility, and our current late fee's are $15 per unit if payment is not received by the 10th of the month. If the 10th falls on a weekend or Holiday, they have till the end of the next business day (we are only open M-F). If payment is mailed, no late fee will be charged if the letter is Post-Marked no later than the 10th of the month (or the next business day if the 10th is on a weekend).

    I feel this policy gives the customer too much, and was thinking of changing the policy to Late fee's charged if payment not received by the 10th no matter what day of the week it falls on, and If payment is mailed, no late fee will be charged if the letter is Post-Marked no later than the 5th of the month.

    What are your thoughts? I was just trying to call all of my customers that I haven't received payment for yet to see if they mailed in their payment yet/remind them that payment is due because on the 15th Preliens go out, And one of my customers was such a B about it. "I ALWAYS send out my payment on the 10th, I am NOT late." ugh...

  • #2
    First: Your state statutes should dictate the amount and I believe in Ca. it is $20 or 20% of the rent, whichever is greater, if you wish to charge that. I guess if you only charge the $15 no matter what, that is up to you.

    Second: They know the rent is due on the 1st of the month, or at least it sounds like that from your post. They have plenty of time to pay rent and no one ever penalizes for paying early. I would never ever ever do the postmark dance or the what day the 10th falls on dance. I would assume they can pay online at your website. They can likely drop payment when your office is closed and they can put their big boy pants on and pay on time instead of the "excuses" dance they will play. That is my thoughts.


    IMO, your way of doing it is motivating tenants to not pay on time or to always have the excuse ready or blame the post office.
    "Never let the inmates run the asylum!"

    Comment


    • #3
      I'm in Arizona, but I believe our sister sites in Cali do $10 or 20% of the rent, whichever is greater just like I do here. My late fee is applied after 10 days late, so the 11th, the late fee is automatically added at midnight and gate access is locked.

      I don't go off of post marked dates on mailed payments etc. I have to physically receive the payment and process it before the 11th to avoid the late fee. It doesn't matter if I'm closed on the 10th or if there is a holiday. Whether I'm closed on the 10th or not, the rent was already a week and a half late. We take cash in person, checks and money orders in the mail, or you can pay on our website or over the phone with a card. We also do auto pay. If you leave a check in my mailbox after I close on the 10th and I pick it up the next morning, it needs to include the late fee or I can't process it. We do not take partial payments.

      It's nothing personal. I just have a business to run. I am not going to do extra work and jump through hoops because certain customers did not plan ahead. If you adhere to your rental agreement and start charging people the appropriate late fees and refuse to play the post marked game, some customers will complain. I think very few would actually move out. You'll get them all paying on time, or at the very least, paying late fees. Paying late is a privilege, not a right, and that privilege has a cost.

      A lack of planning on your part, does not constitute an emergency on mine.
      A lack of planning on your part does not constitute an emergency on mine.

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      • #4
        Michigan allows us to do $20/20% on the 5th day past due and that's what we do.

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        • #5
          For California, you can not access a late fee until 10 days after the date specified in the rental agreement. If rent is stated to be due on the first, 10 days after that would not be the 10th. We did the 12th because we wanted no issues.

          21713.5.

          (a) The owner of a self-service storage facility may assess a reasonable late payment fee if an occupant does not pay the entire amount of the rental fee specified in the rental agreement, subject to the following requirements:

          (1) No late payment fee shall be assessed unless the rental fee remains unpaid for at least 10 days after the date specified in the rental agreement for payment of the rental fee
          --
          Ron

          http://n6ach.com
          http://laws.n6ach.com
          ron.v@n6ach.com

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          • #6
            I actually have 2 different late fee systems here. One is the original one in place when I started; $5 at 5 days past due/$10 at 10 days past due. To be more in line with our other facility, I did away with the $5 fee in January 2016 for all new rentals. I do still have several tenants on the old system and several of those that are consistently late every month, but I keep it in place because, while not in the actual lease, it's part of the policy/rules page for the facility they signed when they rented.
            However, my statutes state I can charge 20% or $20, whichever is larger.
            Too many freaks, not enough circuses.

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            • #7
              Literally just attended the legal seminar for california 2 weeks ago and this was addressed. Let's say you're first of the month billing to make it easy to explain. If the customer is due on the 1st you CAN NOT apply a late fee to the account until the END of the day on the 11th *meaning after your office has closed* or starting on the 12th. As far as the amounts you can do $10 up to $60, $60.01-99.99 you can charge $15, $100+ you can charge $20 or 15% - whichever is greater. Anyone who may question it this is direct from the storage lien law handbook CSSA had at the seminar.

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              • #8
                Originally posted by Orkocean View Post
                Literally just attended the legal seminar for california 2 weeks ago and this was addressed. Let's say you're first of the month billing to make it easy to explain. If the customer is due on the 1st you CAN NOT apply a late fee to the account until the END of the day on the 11th *meaning after your office has closed* or starting on the 12th. As far as the amounts you can do $10 up to $60, $60.01-99.99 you can charge $15, $100+ you can charge $20 or 15% - whichever is greater. Anyone who may question it this is direct from the storage lien law handbook CSSA had at the seminar.
                That is what the law says Had quite a few discussions, however with quite a few, they seemed to take it personally if they could not charge fees by the 10th
                --
                Ron

                http://n6ach.com
                http://laws.n6ach.com
                ron.v@n6ach.com

                Comment


                • #9
                  Thanks everyone for your input/advice. Orkocean- I really wanted to go to that Seminar but I couldn't make it due to all the floods!! I'm glad you posted that late fee's can only apply on the 12th. I guess that means Pre-liens would go out on the 16th? What I don't like it takes so long for you to be able to apply a late fee but then you can Pre-lien someone so quick after. Maybe I could change my due dates to the 25th of the month, for the next month, so I can charge a late fee on the 6th?

                  Comment


                  • #10
                    To me I was shocked by how small it was. But from talking to the CSSA rep it was a"big" turn out compared to the normal. Guess everywhere is different but the last legal seminar I went to in Nashville was a few hundred people versus the i'd guess 30 at most at this one.

                    Regardless of when your due date is you still have to wait the same amount of time before you can charge the fee so changing the date would be pointless. And as ams said some owners WANT their money sooner. And they're free to do it sooner but by doing that they are opening themselves up to legal issues, if they're a big enough operator they could be facing class action issues even. Rather or not someone will ever push that envelope to pursue legal action is the question. Just like locking tenants out of units sooner than we are technically allowed to but even at the legal seminar it was pointed out "we wont advise you to do so BUUUUUUTTTTTT, in 30 years we've never seen a legal case because of it".

                    Comment


                    • #11
                      The rules you laid out for Ca. are totally different, as far the the fee amount goes, than approx 4.5 years ago. We based our amounts here in Oregon off of what the Ca. statutes were for the fee amounts and then followed the Oregon allowed time frame for when we attached the fees and locked out.
                      "Never let the inmates run the asylum!"

                      Comment


                      • #12
                        We charge $5.00 every 5 days until the 15th day. $15.00 total each month.
                        We NEVER play the post marked game. A post mark does not put $$$ in my account or system. They know the due date.
                        Joe Krezdorn
                        DAK Self Storage
                        Leesport, PA 19533
                        www.dakselfstorage.com

                        Comment


                        • #13
                          Here in Idaho, we are $25. It posts at 5:01pm on the 6th day of the month (unless the office is closed on the 6th, than it posts at 9:00am the next business day). We go by when payment is received in hand, not by postmark.

                          We give 1 freebie pass per customer (lifetime) if we are able to get in touch with the customer on the 7th and get payment from them that day. Otherwise, its $25, no exceptions, no waiving because grandma died for the 5th time this week. Most people understand and we try to be as transparent about it up front as we can. The people the complain, will complain no matter what, so do it your way, not theirs

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                          • #14
                            We have people every single month pay online after 5pm on the 6th. Every single one of them gets a late fee

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