The 411 on late fees

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Q: I want to impose a late fee when my tenants pay late. My apartment association form lease specifies that the fee will be $100 if the rent is three days late or more. In an earlier column, you wrote that I’d have to charge only what it really cost me when I get the rent late. That’s ridiculous — I’ll never be able to calculate that, and besides, it would be too small to deter late payments. –Jack S.

A: You aren’t alone — many landlords are using form leases that specify hefty late fees. These fees accomplish what’s intended — their amount makes tenants either think twice about paying late or go to extremes to borrow the money. Some landlords are candid enough to admit that this policy is a nice profit-generator, too.