RENT IS DUE ON THE FIRST OF THE MONTH. NOT THE THIRD (OR THE FIFTH). YOUR “LATE FEES DON’T ACCRUE UNTIL THE THIRD (OR FIFTH)” CLAUSE HAS NOTHING TO DO WITH IT.
SUMMARY: Landlords and tenants alike frequently confuse when the rent is actually due. While many leases provide for assessment of late payment fees on either the third or the fifth of the month, rent is due on the first day of each month, period. Hence, if a tenant fails to pay on or before the first of the month, they are in breach of contract, breach of the lease agreement, and the landlord is not obligated to accept that untimely payment.
DISCUSSION: Virtually every lease in the land requires rent to be paid ON OR BEFORE THE FIRST DAY OF THE MONTH. Paragraph 6 of the TAA Lease, for example, states, “you must pay your rent on or before the 1st day of each month with no grace period.” On the other hand, most leases provide for assessment of late payment fees for untimely payment. Paragraph 6 of the TAA Lease states, “If you don’t pay all rent on or before the ______ day of the month and we haven’t given notice to vacate for the current month before that date, you’ll pay an initial late charge of $________ plus a daily late charge of $________ per day after that date until paid in full.” Most landlords make late payment fees applicable on the third day of the month, while others set that at the fifth of the month. Tenants are often informed “so long as you have your rent paid by the (third or fifth) of the month, you’ll be fine since the rent is not considered late at that point.” Such a statement is not legally accurate. The more accurate statement is “Rent is due on the first, period. The landlord won’t charge you late payment fees so long as you have your rent paid before the (third or fifth). That said, the rent ‘is’ due on the first, so if you pay after that date, you risk being held in breach of contract for failure to timely pay. The landlord is not obligated to accept rent if it comes in after the due date, which again is the first of the month.” Landlords are fully within their right to refuse to accept rent if it is delivered on the second day of the month (or any time thereafter). The late payment clause does nothing to modify the provision of the lease requiring rent to be paid on or before the first of the month.