Overview
While we would like all our tenants to pay on time, that isn't always the case. Sometimes your tenants pay late, and they need to be charged a late fee. Rather than track this yourself, you can configure late fee policies and let DoorLoop handle the late fee charges and notifications for you.
DoorLoop has late fee settings available at the company, property, and lease levels. Create late fee policies based on whether you want them to apply to all your properties, certain properties, or even just a specific lease.
By default, all your properties use the company late fee settings. If your leases have the same late fee schedule, all you have to do is set your company's late fee settings and turn on late fees when you create your leases.
Tip: 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.
The Steps
Set Up Company Default Late Fee Settings
To set up your default Late Fee settings, click Settings on the main menu and then click Fees Settings under the Property Settings section.
On the Fees Settings window, click the Late Fees tab on the left to enter the Late Fee settings.
In the Late Fees section, click the + Add Late Fee button.
Enter the following information under the Add Late Fees section:
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 - Enter the number of days after 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 since it will give the tenant four days to pay, and on the fifth day, 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. For example:
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.
Set Notifications & Reminders for the tenant in regard to Late Fees:
Send a reminder 1 day before late fees is charged - Send a notification reminder to the tenant via email or push notification one day before late fees are charged.
Send a notice upon charging late fees - Send an email to the tenant notifying them that they were charged a late fee.
Click Save to finish.
Good work! Your late fee policy is 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 window on the Late Fees settings 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.
Note: 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.
If you would prefer to set up the late fees settings for the property or lease instead, please refer to the following articles:
Don't forget that you will need to turn on Automatic Late Fees for each lease you want to post late fees charges for when the tenant pays late.
Turn on Late Fees for Each Lease
To turn on Late Fees for each lease, you'll need to go into each active lease and select the Late Fee settings from there. Then, under the Lease Late Fees settings, toggle on "Automatic Late Fees" for the lease.
That's it. The lease is now set up for Late Fees.
Next Step
Set Up Your Management Fee Policy - Learn how to set up your management fees so you can collect the monies you are owed for managing properties on behalf of your property owners.