Late Fees

Late fees must be agreed to by the resident and must be reasonable.  Because “reasonableness” can be vague, there is interest in a mandatory cap on late fees.  Defining a reasonable late fee for every transaction in the state is difficult because of the wide variety in each transactions, delinquent balances, and level of lateness.   It is also difficult because the late fee is not interest on the past due balance, but compensation for the administrative costs of a delinquent account.  We believe an initial late fee of the greater of 15% of the balance due or $50.00 and a daily late fee and of the greater of 2% of the balance due or $20.00 defines reasonableness in this large variety of transactions.