Member Login

Register | Forgot password?

Explanation of Fees in UAA Lease

Posted by taylor on April 5th, 2017
The UAA staff is frequently asked how the different fees in the UAA lease work. Here are some guidelines that might be helpful to you as you decide what to charge. Please keep in mind that the UAA cannot and will not tell you how much to charge - that is up to you to decide. However, we can give you some ideas of what most people charge or the process used most frequently to calculate these charges.

Monthly Rent:
The amount that you charge each month for rent. You should set after studying current market conditions, the nature, quality and location of your property, and your investment goals in the property.

Pro-Rata Rent:
If somebody moves in sometime during the middle of the month, standard business practice is to only charge them a pro-rated amount for the rest of the month. Thus, if rent is $1,000 a month, and they move on the 16th, usually landlords would put a pro-rated amount of 14/30 x $1000 = $467 (depending on how many days there are in the month).

Late Fee:
Usually people charge one flat late fee. Daily late fees can have some legal problems and are statistically ineffective in getting tenants to pay on time. Usually you shouldn't exceed 10% of the monthly rent as a late fee, so most people just put 10% and call it good.

Month-to-Month Fee:
The lease is set up so that when the term expires it automatically renews each month. Usually this is a less than desirable situation for a landlord because the tenant can leave at any time. This fee kicks in when the lease goes month to month and is on top of the regular rent. It is designed to give the tenant an incentive to sign a new long term lease. It also can soften the blow of a rent increase, since any rental increase is usually less than the month-to-month fee they would be paying anyway.

Service of Notice:
If you have to drive over and serve a notice to the tenant, then you can charge your costs. If that is $5 to walk across the street, then that is what you charge. If it is $75 to take time off work and drive to another county, then that is what you charge.

Eviction Turnover Fee:
You can charge tenants for your legal costs during an eviction (court costs, attorney’s fees, etc.), and you can charge them for your damages (unpaid rent, etc.) but the law does not automatically allow for you to charge for your time and effort in the eviction process (which can be significant). This fee is how much you charge them for your time and effort if you have to evict them (which can be considerable).

Refundable Security Deposit:
This is the amount you require up front from the tenant to ensure your security. It is 100% refundable, and the tenant gets it all back if they leave the place in the same condition they got it (minus "regular wear and tear")

Non-Refundable Lease Initiation Fee:
They courts now are saying that there is no such thing as a "non-refundable deposit" since by definition all deposits are refundable. Therefore whatever you used to charge as a non-refundable deposit, you now charge as a non-refundable "fee". This can be any kind of fee (cleaning fee, moving fee, re-key fee, etc.) We call it a "lease initiation fee" to ensure that the tenant doesn't misconstrue the nature of the fee and their responsibility.


Article Archive

+  2018 (4)
-  2017 (22)
+  2016 (39)
+  2015 (5)

Tag Cloud