As a Clarkstown rental property owner, developing specific and clear expectations for your renter is necessary. Part of doing so is setting in place particular consequences for violating specific terms in your lease. One approach to encourage renters to faithfully keep their lease agreement is to issue fines for violations. Though, are such fines or penalties legal? And how much should the fines be? Are there limits on the amount you can fine a renter? Let’s look attentively at these and the corresponding questions.
Are fines or penalties legal?
Generally speaking, yes. Though fines and penalties are necessary to be specifically detailed in your lease agreement before you can ever charge them. If it’s not in the lease, you really cannot charge extra fees. As long as your lease agreement counts language specifying the penalties and the violations they apply to, you are within your rights to issue fines.
How much should a fine or penalty be?
When selecting acceptable fine amounts, deem taking into consideration the severity of the violation and the impact it has on you as the Clarkstown property manager. It’s relevant to take into account that fines should not be excessive or unlawfully harsh. If the penalty you charge is so much more than the incurred damages, eventualities are that it will be viewed unenforceable, and you most likely won’t win your case in court.
Another factor to take note of is your ability to collect the charges from your renter. Fining a renter should only be used as a last resort considering that it carries such a grave risk of permanently shattering any established good relations you may have with them. If you think you have no other choice, then setting reasonable fine amounts will greatly increase the chances of you being able to collect it. Renters are significantly more likely to refuse to pay excessive fines or to sue you to avoid paying them. It’s imperative to weigh the potential benefit of collecting a fine against the consequences, such as losing a renter or facing a legal dispute.
Are there limits on the amount you can charge?
It’s vital to mention and know that some states do have limits on how much can be charged for certain violations. For example, states like Delaware, Nevada, and Washington, D.C. limit late rent payment fees to 5% of the monthly rent amount. Other states have regulations that state the late fee must be “reasonable” and that it must be specifically detailed and clearly included in the lease.
Different states may have other limitations relating to fines for lease violations. Precisely why, it’s relevant to figure out state and local laws before setting fine amounts in your lease agreement. It is furthermore a great idea to consult a lawyer or local rental market expert before ever setting fine amounts in your lease agreement.
In conclusion, fines and penalties for lease violations can be suitable for prompting renters to carefully adhere to their agreements. But really, it’s vital to make sure that any fines or penalties you charge are legal, practical, and in line with state and local laws.
Real Property Management North Point has successful and extensive experience with all things property management, including lease agreements and tenant relations. If you need a professional opinion regarding a lease agreement or any other matter involving your rental property, contact us online to see what we can do for you.
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