Overview
Late fees can be applied automatically based on your rules. You can customize them at the company, property, or individual lease level — most properties can simply use the company-wide settings, with exceptions set where needed.
Your Late Fees Policy needs to be set up before any rent charges are posted for late fees to work correctly. If the Late Fees Policy is set after Rent charges have already been posted, they will not run for that month for those charges. Late fees will run on future rent charges that are posted or any other accounts you have set up.
Walkthrough Video
Set Up Late Fees Policy Walkthrough Video Link.
The Steps
Step 1: Set Up Default Late Fee Settings
To set up your default Late Fee settings, click Settings on the main menu. Then under the Company Defaults section, click Fees Settings.
On the Fees settings page, click the Late Fees tab.
To start with, a default $25 late fee is already set up. You can choose to keep this or modify this.
If you choose to modify the late fee, enter the following information for your late fee rules:
Fee Type - Select either Flat Fee or Percentage. (note that this will only apply to the default income account for Rent).
Fee ($) - If you charge a fixed amount, this will be a dollar amount. If you charge a percentage, enter the percentage amount here.
Frequency - Select the frequency for this late fee. In other words, do you charge this late fee Once, Daily, Weekly, or Monthly?
Grace Period - A grace period is the number of days during which tenants can pay without incurring a late fee. Late fees are applied once the grace period ends. Enter the number of days including the day rent is due to charge the late fee. (For example, if you charge rent on the 1st and want to charge a late fee on the 5th, enter “4” because it will give the tenant the 1st, 2nd, 3rd, and 4th of the month to pay rent. Then on the fifth of the month, it'll charge the late fee.)
Revenue Account - By default the Late Fees revenue account is selected, but you could charge the late fees to a different revenue account you created if you wish.
Description - (Optional) Enter a description for this late fee. What you enter here is what the tenant will see on their lease ledger in the tenant portal. If you leave it blank, the tenant will just see the word “Charge.” You will also see it in the “Memo” column in relevant reports.
Click Add Late Fee if you want additional late fee rules.
Next, select any Fee Limitations & Restrictions you would like placed on Late Fees. This includes:
Maximum Daily Fees - Late fees charged will never exceed the entered amount for a day.
Maximum Monthly Fees - Late fees charged will never exceed the entered amount.
Minimum Balance to Apply Fees - Late fees will only be charged if the tenant's balance exceeds the entered amount.
Only Apply to Most Recent Charge - Late fees will only be applied to the most recent overdue charge (given the above conditions).
Apply Only on Specific Outstanding Charges - Specify which accounts to consider when charging late fees. For example, only charge late fees to Rent, Parking Fees, Pet Fees, etc.
Then, set Late Fee Reminders for the tenant in regard to late fees:
Before the Fee is Charged - Send a notification reminder to the tenant via email, SMS, or push notification one day before late fees are charged.
After a Fee is Charged - Send an email, SMS, or push notification to the tenant once the late fee has been posted to their account.
Click Save Changes to finish.
Your late fee policy is now set up. Going forward, this late fee policy will automatically charge the appropriate late fees to any lease set to use the company default settings. You can return to the company late fee settings at any time to adjust them as needed.
Tip: Use the Simulation section to show you exactly how your late fee policy will look when late fees are charged. Click the Edit Inputs button to change the Rent amount and the Delinquency amount (days past due) to preview the late fees that will be charged.
Tip: If you want to charge late fees on the total of the outstanding balance, including old late fees that have not been paid, toggle off Apply Only to Most Recent Charge. Then, under the Apply Only on Specific Outstanding Charges section, toggle that on and select "All Accounts." This will charge a late fee on anything past due.
Tip: To prevent unnecessary late fees, ensure that payment allocation settings prioritize rent payments before other charges like utilities. This ensures rent is fully covered first, avoiding late fees triggered by partial payments. For details about this, read: Set Up Payment Allocation Priority
Step 2: Turn on Late Fees for Each Lease
Setting up your Late Fees policy doesn't automatically enable Late Fees on a lease. This needs to be turned on from the lease. You can do this while creating the lease, under Step 6 and selecting Yes to late fees.
Or, if you didn't do this when creating a lease, you can turn on Late Fees for each lease by going to the Lease Late Fees report. See Lease Late Fees Report for more details on how to do this.
Once late fees is turned on for the lease, the lease is now set to charge late fees when needed.
Property-Level and Lease-Level Late Fees Settings
If you want to set property-specific or lease-specific Late Fees settings, click Customize on the Customize by Property & Lease banner. For more details on how this works, see Customize Settings by Property or Lease for detailed instructions.
Troubleshooting
Can late fees be removed after they are applied?
Yes, you can delete a late fee charge after it generates if needed.
What if late fees were generated due to an incorrect system configuration?
Sometimes, late fees are triggered due to system errors, such as incorrect recurring rent setups. To address this:
Correct the recurring rent schedule.
Identify and remove any late fees generated by the previous incorrect setup, as these were caused by configuration errors rather than actual late payments.
Late Fees Not Being Charged on a Lease
The most common reason late fees aren't charging is that they haven't been turned on at the lease level. Even if a late fee policy exists at the company or property level, late fees won't apply unless enabled on the individual lease.
Other Reasons Late Fees May Not Charge
Lease, property, or company-level late fee settings are not configured correctly — check all three.
The default rent category is not set up properly. If you use a custom category for rent income, update it under Settings > Default Accounts.
The late fee policy was created or edited after rent was already posted — late fees only apply to charges posted after the policy was set up.