In what some label a bold move on behalf of D.C. tenants, the Council of the District of Columbia gave final consideration to legislation to limit rental late fee charges to no more than 5 percent of the monthly rent. This initiative, led by At-Large Councilmember Anita Bonds (D), culminated during a September 20 meeting of the City Council.
At-large D.C. Councilmember Anita Bonds (D) led an initiative to limit rental late fees in D.C. (Courtesy Photo)
The Rental Housing Late Fee Fairness Amendment Act of 2016 regulates how housing providers may impose late fees upon tenants for the late payment of rent by establishing fair and uniform standards. The bill defines “late payment” as any amount of rent that is not paid within five calendar days from the time a rent payment is due. The bill also prohibits a housing provider from charging a tenant a late fee of more than 5 percent of the tenant’s monthly rent owed, which can amount to an extraordinary burden for many low-income tenants.
“This needed bill will provide over 156,217 rental units whether or not under rent control, with new protections against unscrupulous landlords and outrageous late fees when they fall behind on their monthly rental payments,” Bonds said before a committee hearing on May 16.
Laurie Ball Cooper, a staff attorney for Legal Aid Society supported the bill, emphasizing two critical protections it provides: a vital safeguard against late fees being equal or greater than the amount owed and prohibiting the application of future rent payments to previously assessed late charges, keeping the tenant in perpetual debt.
“Even when tenants receive subsidies for significant portions of the rent, many landlords still attempt to charge late fees as a percentage of the total rent rather than as a percentage of the tenant’s portion of the rent. An individual with low income may pay only $100 in her portion of the rent while the government provides a $1900 subsidy to the landlord. If the tenant is late paying that $100 portion, the landlord often will impose a fee of 5 percent (or more) of the total rent, even though most of the rent was timely received from the government subsidy. In this example, a $100 late fee, which is 5 percent of $2,000 rent, would be charged to the tenant. This is an extraordinary burden on the subsidized tenant and an unnecessary windfall for the landlord.”
Others on hand for the May 16 hearing considered the bill a bad business precedent and one that worked against the interest of property owners and managers. Arianna Royster, executive vice president at Borger Management, also noted that fees for late payments on mortgages, cellphones, and car loans are often much higher than 5 percent and involve interest on the fee.
“Why should practices of rental housing be any different?” Royster asked. “This practice fails to take into consideration the obligations and administrative costs of housing providers when tenants are late on their payments. If one were to look at the average amounts of fees people are subjected to for late payments for mortgages, cell phones, car loans, or the late fees of utilities, you would see that most people have contractually obligated themselves to payments far in excess of 5 percent.”
Currently, D.C. law is silent on how large a late fee housing providers may charge a tenant, resulting in late fee practices that vary widely among District housing providers. Passage of this bill would put the District in line with other states such as Maryland, Maine, and North Carolina, which have laws restricting fees to 5 percent or less.
“For the majority of Black people being hijacked by rent increases, poor management, and the disappearance of affordable housing, it is increasingly necessary to pay rent beyond the fifth of the month,” Reginald Norman, a retired Park Service employee told the {AFRO}. “For decades there was management that was invested in their tenants and the communities where their properties sat and they would allow people who were paid weekly to give them a bit of the money weekly until the month’s rent was paid. The jokers we have in here now are like scavengers. It’s only about money.”
Additionally, the bill also prohibits a housing provider from deducting a late fee from future rent payments, thereby causing the timely rental payments to be late if the tenant has not yet paid the original late fee.