There are many reasons why you shouldn’t allow a tenant to pay rent late, but the legal implications must always be at the top of the list. Unfortunately, by being the nice guy, or gal, and accepting late rent payments, you might be establishing grounds for a Fair Housing lawsuit. Last year, I sat in on a seminar given by Milwaukee landlord-tenant attorney Tristan Pettit, where I learned that case law has been established that says you cannot accept late payments from one tenant and not accept late payments from another.
The Fair Housing Act makes it illegal to “set different terms, conditions, or privileges for sale or rental.” By accepting late payments from one tenant and not another, you may be violating the law.
Any trip to court can be precarious and expensive in terms of time and money. You can never be certain of what the outcome of a court case or dispute is going to be. Any good attorney will tell you that avoiding court altogether is always preferred.
To compound the issue of being sued for a Fair Housing violation, consider what you are doing to the terms of your lease by habitually accepting late rent. Let’s say your lease requires the rent to be paid by the third of the month. But for the last six months, you have accepted the rent on the fifteenth. Suddenly, in the seventh month you put your foot down and demand the rent be paid by the third, but the tenant ignores you and continues to pay the rent on the fifteenth. In the eight month, you file for eviction when the tenant again is late with his or her rent.
If the tenant were to hire a savvy attorney to represent them, the attorney could easily argue that you had amended the terms of the lease by accepting the rent late the first six months of the lease. Not only could this force you to continue accepting the rent, it could cause a counter suit.
Enforce the terms of the lease and require that the rent be paid on time—from each and every tenant. Doing so may keep you out of court.
The information contained in this article is provided for informational purposes only, and should not be construed to be legal advice. Consult a local landlord-tenant attorney to discuss your specific situation.
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Bill Gray
Okay. So are you suggesting that if the tenant doesn’t pay on time you evict them. Isn’t that your only recourse? You can expect the payments on the first, but if the tenant doesn’t pay them what are your options other than tacking on a late fee? I’m asking because we obviously have tenants who habitually pay late. I’ve hopefully got them setup on an auto pay system. Next month will be the first, so we’ll see how that goes.
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