One of the issues landlords sometimes run into is a tenant who isn’t paying rent. So what does a landlord do about it? Like most problems, it’s best to be proactive against late rent by having good policies written into the lease or rent agreement. In the State of Oregon you have to give a grace period before charging a late fee. If the rent is due on the 1st, the tenant has until the 4th day to pay rent without a late fee. On the 5th day, a late fee can be assessed. You can only charge a late fee if you have it spelled out in your lease or rental agreement.
Holding to your own late fee policies is very important because if you don’t charge your late fees and accept late rent, you’re communicating to your tenant that paying rent doesn’t need to be a priority. They will likely pay other bills before paying rent because they know you aren’t serious about enforcing late fees.
Oregon Law determines what can be charged for a late fee.
(a) A reasonable flat amount, charged once per rental period. “Reasonable amount” means the customary amount charged by landlords for that rental market;
(b) A reasonable amount, charged on a per-day basis, beginning on the fifth day of the rental period for which rent is delinquent. This daily charge may accrue every day thereafter until the rent, not including any late charge, is paid in full, through that rental period only. The per-day charge may not exceed six percent of the amount described in paragraph (a) of this subsection; or
(c) Five percent of the periodic rent payment amount, charged once for each succeeding five-day period, or portion thereof, for which the rent payment is delinquent, beginning on the fifth day of that rental period and continuing and accumulating until that rent payment, not including any late charge, is paid in full, through that rental period only.
So if the rent is due on the first and the tenant hasn’t paid rent by the 4th day, send a notice to the tenant on the 5th day that rent is overdue and the late fee is now also due. (Personally, I prefer the one time late fee over the daily fee to keep things simple.) If the tenant still hasn’t paid by the 7th day, then issue a 72-hour pay or quit form on the 8th day. This form, which must be completed and delivered correctly, gives the tenant until the 11th to pay rent. If the tenant still hasn’t paid by the 11th day, you can proceed with the eviction process on the 12th. If you aren’t confident with eviction process, you may want to find a landlord lawyer to help you.
The most important point in all of this is that you create good policies in your lease or rental agreement for dealing with late rent, and then enforce your own policies so you impress upon your tenant that rent is something that needs to be a priority in their bill paying.