Is $150 late fee excessive or illegal in California?

Question

I am renting a new place in California and have been out of state for the past few years. I am signing the rental agreement but the late fee is $150 if not paid by the 3rd of the month. I questioned the landlord and they said this to encourage tenants to pay on time. While I agree with that, I think $150 is excessive. On my past rental agreements, the late fee was at the most $50.

Is there any law in California (Alameda County) that limits the amount of late fees that can be charged?

I am trying to find out before I actually move in if this is legal.

Thanks.

Answer 1

If you sign lease as is, you are agreeing to it

DON'T agree to it, get LL to change it

Of course then they'll think you will be paying late and NEED the fee

Seems a mite high, but. . . . .personally I choose after the 4th. . . and $75 first day and $25 every day late

And most lenders give you 15 days grace on the mortgages, so that isn't it. . . .just the hassle of collecting, chasing

Answer 2

In CA,  the law said the late fee has to be reasonable but did not tell a number or limit. As you know, the living cost is high today and if a LL has to pay his/her mortgage payment late due to a tenant not on time.  The lender charge way more than $150 for late payment from your LL.  My lender charge me over $200 for late payment if I have to pay late.  So, I think you can determine if it is reasonable for LL charging $150 on tenant who pay late.

Answer 3

The law here does not clarify an appropriate amount.   I think 150 is fair because you are forcing them to act as a bank and pay for the mortgage, due on the first, out of their funds.

I do not have a set fee, but it equals rent.   1/30th of the monthly rent multiplied by days late.    

If you sign the agreement then legally speaking you are agreeing that 150 is reasonable and you will pay it.    The judges in Alameda county are tough and they will not let you slide on this.

Answer 4

Just signed my lease and my late penalties are $50/5 days and $100/15 days.  So $150/3 days sounds excessive, but not sure what % that is of your monthly rent.

Answer 5

I agree with MMC.  California does not set a dollar amount limit on the fee--just that it must be reasonable.  That means that it must be related to the additional expense a landlord would incur because of a late rental payment.

Try to get the landlord to change it if you feel strongly about it or perhaps turn down his offer altogether and let him know why.