[RPPTL LandTen] residential lease late fees

[Arthur J. Menor]

Please see the attached contents of my personal form file on the issues of enforceability of late fee provisions in leases.  It looks like the usury argument probably does not apply to a late fee in a lease but the late fee must meet the standards for a valid liquidated damages clause.  In my personal opinion, a daily late fee or a late fee of 10% of the amount of the late payment is vulnerable to the argument that it is an unenforceable penalty rather than an enforceable liquidated damages provision.

From: landten-bounces at lists.flabarrpptl.org [mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Greg Hass
Sent: Wednesday, January 11, 2012 1:32 PM
To: RPPTL Landlord Tenant Committee
Subject: [RPPTL LandTen] residential lease late fees

Our FAR "Residential Lease for Single Family Home or Duplex" has a Section 6 dealing with late fees.  It has blanks to be filled in for both the amount of the late fee and the number of days after rent is due that it becomes "late".  If left blank, the default setting is 4% of the rent payment for each rent payment made 5 days after the rent is due if paid monthly.

I'm curious to hear what the committee members thoughts are as to what the maximum the late fee can be before it is deemed unconscionably high/usury by a judge and rendered unenforceable - has anyone seen any cases on this?

Thanks,
Greg

Greg Hass, Senior Counsel

Office of Law & Policy | FloridaRealtors(r)
7025 Augusta National Drive, Orlando, FL 32822
talk: 407.438.1400, ext. 2421
visit: http://www.floridarealtors.org

The Voice for Real Estate(r) in Florida

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From: "Jack C. McElroy" <JMcElroy at shutts.com>
Subject: Usury - Leases and Late Fees
Date: Wed, 5 May 2010 14:19:55 -0400
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