Ah, getting the rent paid. It’s the best part of being a landlord! Most renters pay with a check or money order, but if a tenant in your Texas property pays his rent in cash you’ll need to provide a receipt to him and record the rent payment in a record book. If your tenant pays using LeaseRunner’s Tenant Payment Center we always provide a receipt of payment to both the tenant and the landlord.
Getting paid is one thing, but getting paid on time is one of the benefits of having great tenants, and it is every landlord’s dream to be paid on time. Rent is typically due on the 1st day of the month, and rent is considered late if not paid by the 5th day of the month. (And remember that “paid” means payment has been provided, not cleared if made by check.) So, what happens in Texas if the rent is late?
Reasonable Late Fee
In Texas there is no statute for how much a landlord can charge as a late fee; rather, the fee is required to reflect “a reasonable estimate of uncertain damages to the landlord that are incapable of precise calculation and result from late payment of rent”. That sounds fair, but there are some other factors to consider so that you don’t run afoul of the law when collecting a late fee in Texas.
Texas Late Fee Dos and Don’ts
Section 92.019 of the Texas Property Code provides the following stipulations regarding collecting late fees for rent:
- notice of the fee is included in a written lease;
- the fee is a reasonable estimate of uncertain damages to the landlord that are incapable of precise calculation and result from late payment of rent; and
- the rent has remained unpaid one full day after the date the rent was originally due.
In addition, there are some provisions to keep both landlord and tenant resolving the issue of late payment in good faith, and they are:
- A late fee under this section may include an initial fee and a daily fee for each day the rent continues to remain unpaid.
- A landlord who violates this section is liable to the tenant for an amount equal to the sum of $100, three times the amount of the late fee charged in violation of this section, and the tenant's reasonable attorney's fees.
The importance of knowing the law in your state is critically important to helping you stay out of trouble and keeping your property profitable.
That last one is a doozy, and it is something that landlords need to be aware of. The importance of knowing the law in your state is critically important to helping you stay out of trouble and keeping your property profitable. Fines and damages paid by the landlord are one way of eating up your time and profits, so make sure to be on the right side of the law in Texas when it comes to charging late fees.
Locking Out the Tenant
Hopefully you never have to resort to this final action, but in Texas you are allowed to lock-out the tenant for failure to timely pay the rent. It’s not the best situation to find yourself in as a landlord, but if you need to lock-out the tenant Texas Property Code Section 92.0081 addresses this issue. Conditions do apply and they are extensive, so make sure to read over that section carefully, and perhaps have a qualified attorney in your area guide you through your rights and responsibilities.