Lien Fees as a percentage of rent

JasonB

For several years my company has requested that the lien fees be allowed to be set as a percentage instead of just a flat rate. Similar to the late fee where you can choose a flat amount or a percentage of rent.
Has anyone else requested this.
The logix behind our reasoning is that a percentage amount would be more proportional to the overdue amount.
i.e. a flat amount on a small unit may encourage the tenant to pay their outstanding rent on time, where the same flat amount would only be a drop in the bucket on larger units.  However a percentage based penalty would be equally motivating on all unit sizes.

ESS

We use the flat fee. I personally don't think it is fair as you are penalizing tenants who spend more money with you because they may not have paid on time - as far as late fees. With the lien fees I feel the same way, but you're penalizing them more when they already can't pay you what they owe. I think all fees should be a set amount. Tenants usually don't go into lien on purpose so why penalize them even more to where they may never be able to pay? Just IMO 

Orkocean

Different states have different laws regarding this for late fees. California for instance can be different amounts depending on the rental amount. Regarding lien fee's though I don't know of a single state that has it listed where you can charge different amounts based on the amount of rent. You are doing the same steps for every unit to process a lien and the lien fee's are supposed to be a set amount to cover your costs of doing those steps. You would have a hard time explaining to a judge if it ever went to a court why one tenant pays $50 for a lien fee yet your other customer who you did the same exact process for is paying lets say $200. 

ESS

Orkocean said:

Different states have different laws regarding this for late fees. California for instance can be different amounts depending on the rental amount. Regarding lien fee's though I don't know of a single state that has it listed where you can charge different amounts based on the amount of rent. You are doing the same steps for every unit to process a lien and the lien fee's are supposed to be a set amount to cover your costs of doing those steps. You would have a hard time explaining to a judge if it ever went to a court why one tenant pays $50 for a lien fee yet your other customer who you did the same exact process for is paying lets say $200. 

Didn't even think about that. We charge $30 certified fee, $50 lock cut fee and also a $50 listing fee for auction. That is to cover what we spend in fees and labor for doing those things. I absolutely agree with you regarding explaining to a judge why tnt A who has a 10X30 unit costing more to put into lien rather than tnt B who pays significantly less because they have a 5X5. It's all the same process. Also, would you really want to be know as THAT storage facility?

websterb

We follow KY storage lien laws, and I think ours is a mandatory flat rate. We apply a flat $100.00 lien fee on the 32nd day a tenant is late. This will stay on if and when they actually go to Auction. We remove it if they bring past due amount current before said auction. We do have habitual s that have become used to this process, and we have to be careful in the case of a partial payment to physically go in, credit the lien fee, apply amount paid, and if not brought current, reapply the lien fee. If not it will pay all past due amounts first, which sometimes pays a partial of the lien fee, and that throws the totals of actual charge array if they do go to auction. We take partial payments because some is better than none.