UK Landlord Forum / Life

Good Afternoon All,

Wondering if anyone can help.......

I have had a few tenants defaulting on their payments and I was sick and tired of the tragic stories and the constant chasing... So for my next tenant I drew up a contract that states if rent is not paid on time there will be a penalty chanrge for late payment @ £X per day. This new tenant delayed the rent once. On this occasion she  paid the penalty fee. However more recently she paid the rent 15 days late and was not contactable. She has now paid the rent but none of the fees.
Could I keep the fees out of her deposit or is this something she could take to court?
Thanks

Hi Rkaiz,

Bit of a grey area, because the fees need to be fair/reasonable, so it depends on how much you're penalising them. I know a lot of letting agents inflict the fee though (that's not saying it's legal though)!

Personally, I would let her get away with a firm warning (write her a letter, and tell her you're going to waive the late payment penalty this once), and just be thankful she paid her rent!

If she's struggling to pay the rent do you think adding fees onto what she owes will help the situation?  I'd have to agree with the fag.

Can you tell us what X is in this instance? As well as what the rent is?

I 'd have to agree with riptide too.  Being too rigid as a landlord can often lead to uncooperative tenants so you might have made a rod for your own back here.  A little lateness sometimes needs to be tolerated if it keeps the tenancy in good order from a rapport point of view.

If you aren't being paid the late payment fee, a deposit deduction could be a consideration if done properly and probably via the dispute resolution procedure with whichever scheme you use however, this would need to be referred to within the tenancy agreement and not enforced for the sake of it.

15 days is rather late but a conversation will probably prove more fruitful than a fee. Don't be over-zealous about it.  Pushing too hard might see them stop paying you all together.

Thank you all for your comments and suggestions. I do agree, perhaps i shouldnt push the tenant too far.

X is £30 per day late penalty.  Rent is £1600 per PCM at the moment.

The thing is I know is tenant can pay, she is a director of a company and usually pays on time,  previousy she has paid the penalty for a few days late. On that occasion I gave her a discount. Prior to that I have let her off the penalty charge completely.

The tenancy agreement is up shortly and the rental in that area has gone up to £1800 - I have advertised locally and had lots of interest.... What is the best way to go about letting her know? Shes not communicating me at all since her last late payment and Im thinking of sending her a letter as suggessted by fag.

Thank you...

You'd need to serve a Section 21.  If you serve it now it would  be a Section 21 1(b) for fixed period tenancy as she is still with her fixed term.  If you served it after the end of the fixed term, you'd need a Section 21 4 (a) for periodic tenancies.  You must make sure the notice is served prior to her next rent payment date to take affect on the rent payment date and to expire no less than 2 months on from that.

Good luck.

Laura

£30 per day as a penalty sounds high, to me, and I worry that it would be unenforceable if challenged. If, as you say, the Tenant is now uncommunicative and the fixed term is close and the achievable rent has increased and there is lots of interest... prepare to serve that Section 21 now so that the property is - hopefully - vacant by the time the end of the fixed term arrives, or shortly afterwards, ready for a shiny new Tenant...

Thanks Laura! I will look into this...