California Late fee Schedule

sonyawiprud

Hello and Happy New Year! 
My company is considering switching to conform to the California late fee schedule. This is something I have been pushing for, for quite some time. I know it's as simple as clicking the button to use that fee schedule, along with some modifications, what we don't know is are we legally bound to notify every existing customer that we have changed over to the new fees? I can just see people saying that they were never notified and did not sign that agreement. If we do send out letters, we will still get the same argument from those who refuse to update their addresses. Not our fault, and yet. Just hoping we can make this transition seamless. Any input will be appreciated. 

storable_support

Hi, @sonyawiprud. @MamaDuke7 might be able to help you with this -- she's based in California and super knowledgeable!  

MamaDuke7

You need to send notices to everyone 30 days in advance.  I'd recommend Certificate of Mailing so you have proof of mailing, whether you have the correct address or not.  It's their responsibility to update you, not yours to chase it down!

In your notice, it should say something like Be advised that if you pay your next rent due following 30 days from the mailing of this notice, the document will be assumed to be in full force and will meet our compliance within the law."  If they stay after the 30 days, they have automatically agreed to the new terms!

teamcapitola

Question (just curious /not criticizing);

Your facility is in California? What fee schedule(s) were you following before this?

I know the state dictates Late Fees and such (Ca. B&P 21713.5) so just curious what your policy was.

MamaDuke7

teamcapitola said:

Question (just curious /not criticizing);

Your facility is in California? What fee schedule(s) were you following before this?

I know the state dictates Late Fees and such (Ca. B&P 21713.5) so just curious what your policy was.

You can always do LESS than the law allows here.  So at 1 property I had, all late fees were $10, regardless of the amount of the rent.  But the CA schedule allows up to 15% of the rental rate, depending on the base rent amount.  So on those big units, it's a whole lot more than $10!!!

sonyawiprud

MamaDuke7 said:

You need to send notices to everyone 30 days in advance.  I'd recommend Certificate of Mailing so you have proof of mailing, whether you have the correct address or not.  It's their responsibility to update you, not yours to chase it down!

In your notice, it should say something like Be advised that if you pay your next rent due following 30 days from the mailing of this notice, the document will be assumed to be in full force and will meet our compliance within the law."  If they stay after the 30 days, they have automatically agreed to the new terms!

Thank you so much for the advice!

sonyawiprud

teamcapitola said:

Question (just curious /not criticizing);

Your facility is in California? What fee schedule(s) were you following before this?

I know the state dictates Late Fees and such (Ca. B&P 21713.5) so just curious what your policy was.

What we are currently doing is $10 ten days late, $25 on day 30 and $25 on day 45 and $25 on day 58. A total of $85 altogether. We've been here 7 years now and the repeat offenders don't even blink at that fee, causing too much work for us to chase them down and send the letters. My hope is to create a better sense of urgency to pay on time, especially for my big units/big offenders! 

lhill

@sonyawiprud is the $85 over and above other fees, like the Lien Letter fee, Lock Cut fee, Advertising fee, etc.? Are you passing those charges on to the tenant as you get to those points in the lien process, or are you covering those types of costs with the $85 in fees listed above?

teamcapitola

Our 10x15s rent for $395; when a tenant gets hit with a 15% / $58 Late fee...trust me they REALLY notice it!

following the Ca schedule (B&P 21713.5) works well for us. We will waive one single fee per account...once.

We process preliens at 19 days past due, and Lien at 36 (instead of required 14 and 29 days)

We've consistently kept delinquency in the 1-2% range year round, although local demographics is a big part of that. 

sonyawiprud

lhill said:

@sonyawiprud is the $85 over and above other fees, like the Lien Letter fee, Lock Cut fee, Advertising fee, etc.? Are you passing those charges on to the tenant as you get to those points in the lien process, or are you covering those types of costs with the $85 in fees listed above?

No, it's $85 altogether. Which is nothing to the guy that pays (or doesn't pay for 3 months) $500 a month for his unit. So on day 89 he comes in and pays $1585 the day before his rent is due, then 11 days later he's locked out again for 89 days. He pays 3 times a year. Frustrating. 

GlenMark

teamcapitola said:

Our 10x15s rent for $395; when a tenant gets hit with a 15% / $58 Late fee...trust me they REALLY notice it!

following the Ca schedule (B&P 21713.5) works well for us. We will waive one single fee per account...once.

We process preliens at 19 days past due, and Lien at 36 (instead of required 14 and 29 days)

We've consistently kept delinquency in the 1-2% range year round, although local demographics is a big part of that. 

$395 for a 10x15? Wow! I guess for down there, that's acceptable.

We are considering upping our late/lien fees too. Most of our tenants who are consistently late don't seem to mind paying late fees. However, given the nature of our economy up here, I have been processing a HUGE uptake in both prelien notices and lien notices so far this year. My line of thinking is if fees are raised, it might shrink the amount of past due tenants over time; especially since USPS stamp fees keep increasing.

teamcapitola

GlenMark said:

teamcapitola said:

Our 10x15s rent for $395; when a tenant gets hit with a 15% / $58 Late fee...trust me they REALLY notice it!

following the Ca schedule (B&P 21713.5) works well for us. We will waive one single fee per account...once.

We process preliens at 19 days past due, and Lien at 36 (instead of required 14 and 29 days)

We've consistently kept delinquency in the 1-2% range year round, although local demographics is a big part of that. 

$395 for a 10x15? Wow! I guess for down there, that's acceptable.

We are considering upping our late/lien fees too. Most of our tenants who are consistently late don't seem to mind paying late fees. However, given the nature of our economy up here, I have been processing a HUGE uptake in both prelien notices and lien notices so far this year. My line of thinking is if fees are raised, it might shrink the amount of past due tenants over time; especially since USPS stamp fees keep increasing.

Seriously...

You should see what a 2 bedroom apartment rents for around here!  Absolute craziness!