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Late Fees

Late Fees

Issue Overview

In light of recent litigation where plaintiffs allege they were assessed unreasonable late fee charges and research alleging a correlation between late fees and eviction (leading to homelessness), state legislatures are moving to more strictly and clearly define the amount an owner or operator may charge a resident for paying rent past due. Moreover, in some jurisdictions, policymakers are attempting to prohibit owners and operators from assessing late fees at all and are further restricting their ability to recover late fees in the eviction process.

As an Owner or Operator, How Does this Affect My Business?

There continues to be great variation among state and local laws and case law as to what constitutes a "reasonable" late fee. With such variation in the law, housing providers should be knowledgeable of the rules within the states and localities in which they operate to avoid litigation and potential class action lawsuits.