Late Fees in Rental Agreements
By Kyle Cirac
Landlords often have tenants that fail to pay their rent on time. As a result, many landlords utilize late fee provisions in their rental agreements. This article addresses late fees in dwellings under Chapter 118A and manufactured home parks under Chapter 118B of the Nevada Revised Statutes. For information on late fees in commercial rentals, refer to Chapter 118C of the Nevada Revised Statutes.
In dwellings under Chapter 118A, if the landlord has a written rental agreement, it must include a provision relating to charges which may be required for late or partial payment of rent or for return of any dishonored check (NRS 118A.200(3)(g)). If the rental agreement does not contain such a provision, there is a presumption that there are no charges for late or partial payment of rent or for dishonored checks (NRS 118A.200(4)(c)).
The rental agreement should also specify which day rent is due. For most rental agreements, the due date will be the first day of the month. For tenancies that are longer than week to week, no late fee may be charged or imposed until at least 3 calendar days after the day the rent is due (NRS 118A.210(4)(a)). The landlord must provide a grace period of 3 days after the rent is due before charging a late fee. In addition to the grace period, any late fee must not exceed 5 percent of the periodic rent (NRS 118A.210(4)(b)) and the maximum amount must not be increased based upon a late fee that was previously imposed (NRS 118A.210(4)(c)). For example, if the monthly rent is $1,500.00, the maximum amount that a landlord would be permitted to charge for late fees would be $75.00 per month. If a tenant owes rent for January and February, the landlord may charge $75.00 one time for January and one time for February. Compound late fees is not permitted.
For rentals of spaces in manufactured home parks under Chapter 118B, the rental agreement must similarly include the amount of any charges for late payment and dishonored checks (NRS 118B.040(3)(b)). Similar to late charges for dwellings under Chapter 118A, manufactured home parks have a maximum amount they are permitted to charge for the late payment of rent.
Specifically, a landlord or his or her agent or employ shall not charge or receive any fee for a monthly rental payment within 4 days after the rental payment is due or which exceeds $5.00 for each day excluding Saturdays, Sundays and legal holidays, which the payment is overdue, beginning on the day after the payment was due (NRS 118B.140(1)(b)(6)). This means that if monthly rent is due on the first day of the month, the landlord may not charge late fees until the sixth day of the month. Additionally, the late fees may not exceed the amount of $5.00 per day. However, when the late fees are imposed, they may be retroactively charged for the second through the fifth days of the month, provided they are not Saturdays, Sundays or legal holidays. The late charges should be independently determined and verified in each case according to the provisions of the rental agreement.
If you need assistance in drafting a late charge provision for a rental agreement or calculating the proper amount of late charges according to your rental agreement, contact an attorney.
* The foregoing information is of a general nature. Landlords and tenants should contact their legal counsel with questions for advice concerning specific situations.