Rent Grace Period – When is Rent Late?

Rent grace periods are sometimes a confusing topic for landlords and renters a like.

When is rent late?

This going to be determined by two factors.

  1. What your state laws say
  2. What your lease states

If there are no statues at the state level than this will be purely determined by the lease. Some leases will allow a rent grace period (usually of 5 days) of when rent is due.

What is a rent grace period?

A rent grace period is a period of time after the rent is due where a tenant can still pay the rent without any penalty.
Grace period timeframes can vary state-by-state but are a common issue for landlords with tenants.
Avvo touched on this in their webinar with Zillow addressing grace period concerns.

 
The audio file above addresses this question as Avvo’s chief legal officer, Josh King, weighs in with his thoughts.
Below you can read the transcript of the conversation:
Legal Disclaimer: The materials and information presented here were provided for informational purposes only and not for the purpose of providing legal advice. Zillow Group does not make any guarantees as to the sufficiency of the information included or its compliance with applicable laws. You should contact your attorney to obtain advice with respect to any particular issue or problem. The opinions expressed in the audio and from the webinar are the opinions of Avvo and may not reflect the opinions of Zillow Group.
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5 Day Grace Period for Rent

This is the most typical grace period used in leases. The transcription below covers this.
Question: Great. Okay. So, one question that we received, is that I am required to give the five day grace period for late fee on rent every month. Is rent due on the first or the fifth?
Josh: A part of this is just gonna depend on what’s in your lease. So your lease may say you’re giving a grace period but, I mean, rent is technically due on the day you say it’s due or you say it’s due in the lease. And, so, what I’ve heard the people should do, if you are having a problem for this because, I mean, hey, if someone gave me a grace period, I would pay it at the last possible date, right? If that’s getting to be a frustration or a problem for you, you should probably just take the grace period out of the lease. And have a provision that if they pay late, that is going to be…that’s going to incur a late fee, or even better yet, that it’s going to incur additional rent.
That’s not necessarily going to solve a problem for you, people may still continue to pay late, and not pay you that additional rent, but what it’s probably going to do is discipline the process and not, that for the most part, you’re gonna be getting people to pay on time when you don’t even give them the opportunity of the grace period.

Rent Grace – Our Thoughts

The relationship you have with your tenant (or people in general) is going to be built upon past experiences and the resulting expectations.
If your tenant has been maxing out the grace period duration it’s going to be difficult to change their expectations on when rent is due.
That’s why your initial standards and communications with a new tenant are so important. Here in New York, the grace period is 5 days.
I had a tenant who sincerely thought the rent was due on the 5th because of how it was written in the lease. It wasn’t the tenant’s fault but my own fault for not clearly communicating when rent was due. After explaining when rent was due that tenant started paying on the first.
My first tenant who was an actual problem with paying late was because I did not have a late fee in place. Once I started charging $5 a day (after the 5 day grace period in NYS) I started getting the rent on the 5th.
Ideally, you want to be able to avoid any grace period talks because your tenant always pays on time.
Proper tenant screening, clear communication, and charging late fees are all ways to ensure that a tenant isn’t taking advantage of the grace period afforded them in your state.