Question About My Son's Lease

[tgotch]

My DS is away at college. He is leasing a house with 2 other guys. They signed a lease in ~Jan 2010 to move into a house for fall semester. They were planning on moving in July 1, and were expected at that time to provide a $400 security deposit plus first and last month's portion of their lease ($800 additional).

The house was being renovated over the summer of 2010, and was not available to move in to until August of 2010. So my DS and his buddies paid their deposits, rent. at that time.

My DS has informed me they have been getting charged late fees to the tune of $200 for unpaid July rent (total over $1200 now).

He says he has been trying to clear this up over the last several months with the property mgmt. company, but they have issues (a lot of turnover, no documentation, no communication). They were initially getting the run-around from an agent stating things (according to my DS) such as "oh don't worry about those late fees, it's just a small issue with our computer system, and we will take care of it."

So long story short, are they liable for these late fees, since they were not living in the house in July? I think not, since the property management company did not fulfill their end of the contract, since it was not inhabitable in July.

They finally did to meet face-to-face with an agent on Saturday (they have no real office). MY DS and his buddies stated their case, but the agent keeps going back to "the contract" stating they signed a contract for July, they owe July.

Any ideas how to clear this up?

 

[HpRyder]

They signed a lease in ~Jan 2010 to move into a house for fall semester.
The house was being renovated over the summer of 2010, and was not available to move in to until August of 2010.

If they can PROVE to a judge that the house was uninhabitable until August or that the management company did not allow them to move in until August. Then they owe no rent for July. Alternatively if the place was habitable, but under construction, they should have been offered a prorated rent abatement. Was this offer made? At what point were they give the keys, ie. physical possession?

...since they were not living in the house in July? I think not, since the property management company did not fulfill their end of the contract, since it was not inhabitable in July.

If the unit was habitable & they had possession, it doesn't matter when they moved in. So yes they would owe for July. Can they prove it was not inhabitable in July? Do they have pictures of the apt during that time?

...agent keeps going back to "the contract" stating they signed a contract for July, they owe July.

What does the contract say about rent & deposits if the landlord is unable to provide the apt on time?

 

[Texas Proud]

I agree with HpRyder... it matters when they took possession of the property... IOW, if they got keys to the place at the beginning of July then they had access to the place... if it was not habitable because of construction, they should have gotten a letter stating that the lease was being modified and remove July....


If there is no one from the property management firm that is competent (which it sounds like), they will have a hard time proving that possession was taken in July unless your DS signed something stating they got keys or something else saying they did take possession (not the lease)....

I would not pay and say 'take me to court'...

 

[ERD50]

+1 to HpRyder.

My experience is that the college property management companies are extremely lazy and extremely slimy. You absolutely need proof of everything as you go. Take pictures when you move in/out, notate everything, make copies and deliver them to someone at the company and get a signed receipt that they were delivered. That alone might send the signal - "don't mess with us".

The place my DD dealt with in Champaign was terrible. They just routinely charge for all sorts of things, and I assume most kids don't fight it, or fight it half-heartedly. They fought and got all the extra charges dropped, but the better your documentation the easier this will be.

Some of the charges were ridiculous. There was a 1" rip in the carpet when they moved in (they documented it). At year end, the co charged for new carpet, saying the rip was now 3" (well, what do you expect, the rip is going to shrink? why didn't they get new carpet when they moved in? Did you charge the previous tenants for new carpet because of the 1" rip, and then not replace it?). One day, the co showed up to deliver an extra chair they didn't order, they declined it, but it was on their bill. So now 'prove' you didn't accept the chair. Another charge to replace the blinds that were missing when they got there (?). Oh, and they charge for any light bulbs missing (that's OK, but make sure they are all there when you move in). On and on and on, many $$ of charges. What a scam.

Maybe someone else can comment, but I would imagine a small claims court would be very supportive if the kids had good documentation. Without the docs, they may come across as a bunch of whiny kids who didn't pay attention to the contract.

-ERD50

 

[Bestwifeever]

If someone wrote/e-mailed your son that the place was not ready until August, I hope he kept a copy of it. Someone must have something in writing.

It doesn't sound like the property management company wants July's rent, just the late fee? That's weird.

I believe the property management company breached the contract by not having the property ready on time. Maybe tell the PM company they're getting legal advice about that if they don't resolve the bogus late fees.

The kids' credit rating (and anyone who might have cosigned) are getting dinged by this, by the way. They need to clear that up or it will follow them into the real world.

 

[sheehs1]

Ditto HpRyder. If your son has a copy of the contract, what does the fine print say?
If they were given keys and possession in July, and if they have no documentation regarding how uninhabitable the place was...they may have gotten a lesson in "CYA" (cover your you-know-what). Uninhabitable means different things to different people depending what side of the fence you are on. I hope your son and his roommates have something...anything... that will prove it was uninhabitable. Were the services in their names in July (electric, H2O,etc.)? If so, this gives the management company additional proof they took possession in July.

 

[sheehs1]

After re-reading all the post...your son may want to ask the management company where they booked that August rent. They may have booked it for July which may be why they are being charged late fees. If this is the case, your son and roommates could have another possible surprise..in that they are a month behind in the basic rent.
Just a thought.

 

[JPatrick]

A couple of thoughts. This management company may have some loose ties to the college housing folks. It wouldn't hurt to tell the story to them with the hope a well placed phone call could assist.
Meanwhile, under the heading of getting prepared, your son might want to gather info such as who did the remodel etc. I could envision needing a description of what the place was like during the peak of repair.

 

[Westernskies]

A $200/month late fee added every month for being late once on a $400/month lease? Or am I reading your OP wrong?

 

[tgotch]

Thanks for all the comments. My DS has done a surprisingly good job of documenting everything (must have gotten that from is mother ). He even has a copy of the floor plan (they put a whole new backend on the house - family room & kitchen). He has emails from the property company in June/July commenting about the rehab, whereby PM Co. stated rehab is coming along nicely, looks like Aug. 10 would be a good time to move in. They never got the keys until then also.

PM was basically doing invoices manually until around Dec. then went to an automated system. Once they went to an automated system, DS started getting late charges. So for 4-5 months, they were not even aware they were getting charged late fee because they never showed up on previous invoices.

PM Co. just seems highly unorganized and fairly unethical, DS calls go unanswered, email responses from PM are cryptic at best (when answered). I think they are extorting money from naive College kids. When DS sat down with PM rep (who is another student btw, and which took 2-3 months to arrange)), rep talked about how a lot of students just quit paying rent when they get these late fees.

DS is coming home this weekend (must be in need of a home cooked meal). He is bringing me a copy of the lease and other docs to look at. I wasn't planning on paying these fees, and all your comments reinforce my belief.

 

[tgotch]

A $200/month late fee added every month for being late once on a $400/month lease? Or am I reading your OP wrong?

Sorry if I wasn't clear. $400 is my son's portion (total rent is $1200/3 people).

 

[Texas Proud]

After re-reading all the post...your son may want to ask the management company where they booked that August rent. They may have booked it for July which may be why they are being charged late fees. If this is the case, your son and roommates could have another possible surprise..in that they are a month behind in the basic rent.
Just a thought.

Ding Ding Ding..... this sound like the winner in what is happening...

Like Westernskies said... how can they keep charging late fees when one month is late By booking ALL of them late because the first payment was posted to July...

I would suggest that whoever is paying the rent make sure that the month that you want credited is ON the check... IOW, put 'Feb rent' on the check for Feb... even though they might not do it right, that would show that you paid that month...

 

[Westernskies]

I'd send them a registered letter outlining the error and demand that they fix it (reverse all late charges and any negative reporting to the credit bureaus) before the next rent check is credited. If not, let them know that you will be taking them to Small Claims Court- sounds like DS has the proper documentation to prove his case. It appears that the student PM rep probably made a mistake regarding the date of possession and is unwilling to own up to it with the PM Company- or the PM company is incompetent and/or crooked- either way, he picked the wrong PM to rent from. Lesson learned.

 

[ERD50]

Like Westernskies said... how can they keep charging late fees when one month is late By booking ALL of them late because the first payment was posted to July...

I would suggest that whoever is paying the rent make sure that the month that you want credited is ON the check... IOW, put 'Feb rent' on the check for Feb... even though they might not do it right, that would show that you paid that month...

In this case, it sounds like July was incorrectly charged, so there should be no fees whatsoever. Still a good idea to add the month to the comment line on the check, to show intent.

For the following, to keep it simple, assume the rent check is due by the end of the month we are collecting rent for. So JULY rent due by JULY 31, etc. ...

However, the way I would look at it if I were a landlord - if someone didn't pay JULY rent at all, I would assign a late fee to JULY. If the next check they give me is on AUGUST 31, I would apply that check to the past-due JULY rent, and now they are late for AUGUST, another late fee applied to AUGUST.

I don't think you can just 'skip' a month and then say you aren't late for the following months. You are late each month until you catch up, right? Otherwise, there really is little incentive to pay that old JULY rent if you are not still accumulating late fees. FIFO accounting?

Maybe a real landlord/lady can fill us in.

-ERD50

 

[Texas Proud]

In this case, it sounds like July was incorrectly charged, so there should be no fees whatsoever. Still a good idea to add the month to the comment line on the check, to show intent.

For the following, to keep it simple, assume the rent check is due by the end of the month we are collecting rent for. So JULY rent due by JULY 31, etc. ...

However, the way I would look at it if I were a landlord - if someone didn't pay JULY rent at all, I would assign a late fee to JULY. If the next check they give me is on AUGUST 31, I would apply that check to the past-due JULY rent, and now they are late for AUGUST, another late fee applied to AUGUST.

I don't think you can just 'skip' a month and then say you aren't late for the following months. You are late each month until you catch up, right? Otherwise, there really is little incentive to pay that old JULY rent if you are not still accumulating late fees. FIFO accounting?

Maybe a real landlord/lady can fill us in.

-ERD50

If you put information on a payment method, such as a date it applies or an invoice number, the receiving party needs to apply it to the debt that you said... unless there was some language in the agreement that they can apply it to the oldest amont outstanding...

Using this as an example... July is in dispute... so I do not pay July... I pay August on time... since I told you it was August payment, I am not late and you can not charge me a late fee... same for each month after that... as a landlord you can take me to court and we can get July settled... but until you do... we will continue to have a disagreement...


I did this for two years with the company I work for... we withheld rent when they locked us out due to electrical problems... but we continued to pay the rent when due every month before and after... we also sent a letter stating that we would not pay unless we lost in court... they never took us there and did not charge late fees...

 

[ERD50]

If you put information on a payment method, such as a date it applies or an invoice number, the receiving party needs to apply it to the debt that you said... unless there was some language in the agreement that they can apply it to the oldest amont outstanding...

Using this as an example... July is in dispute... so I do not pay July... I pay August on time... since I told you it was August payment, I am not late and you can not charge me a late fee...

I would agree in the case where the payment is in dispute (as in the OP). But if it is simply 'late' or unpaid, then I think it would be just FIFO. But I could be wrong.

-ERD50

 

[tgotch]

Does anyone have any input on the legalities of the PM Co. charging an extra $200 every month for a payment they claim they are owed for July? In my mind, there should only be a one time late fee. Am I thinking right?

 

[ERD50]

Does anyone have any input on the legalities of the PM Co. charging an extra $200 every month for a payment they claim they are owed for July? In my mind, there should only be a one time late fee. Am I thinking right?

I'm no lawyer, but I think you should use different terms here.

You are not 'late', you are disputing a charge. That's different. You can't be late to pay for something that you don't owe.

Pragmatically, you might want to just pay it now to stop the late fees from accruing, even if they are incorrectly doing so. If things go your way, you should be refunded everything anyway. But just in case they don't, why incur extra expense?

-ERD50

 

[rmark]

If Augusts payment is applied to July, September to August, October to September, etc. then the PM company computer is generating a late fee for each month.

It appears your son can document that the property was not ready at the start of the lease and that both they and the PM agreed to a later move in date.

Since the PM is unwilling or incompetent at fixing the problem, your son needs to go to the campus legal aid and see what they can do to rectify the matter. A letter from them may get the ball rolling.


I'm not a lawyer nor do I play one on TV.

 

[calmloki]

Mostly our late charges have to do with a tenant not paying their rent on time. Payments made after the due date are applied first to late charges, then to rent. This hopes to discourage tenants carrying a single late charge along until their last month, when they don't bother paying rent and leave it a #*~! ungodly damaged mess, and we get to eat the expense.

Obviously I'm doing it wrong.

That said, look to lease terms and/or possession as the date rent should begin. If it was uninhabitable then probably a good argument could be made for denial of use for however many days. If the use was denied then common sense would suggest that neither rent nor late charge should apply till it was usable. Remedy might have been to refuse the lease as there was no dwelling inhabitable when due.

Toss a coin - I don't know - have been to court and had a meth head get judge approval to do me for a month or two of free rent. Don't think I've ever had a judge squeeze a tenant turnip for money i was due. But I don't chase the judgment proof - others have a great relationship with collection companies.

 

[pb4uski]

I think your DS' best option is to make sure that everything with these dodgy characters is well documented. It might be wise for him to put together a summary of what was due from the point that they took occupancy and what they paid and when - demonstrating that they paid what was rightfully due under the lease given that the landlord did not allow occupancy when they were supposed to be provide occupancy - and send that along with the documentation to the PM and insist that they correct the errors in their records and reverse the various late fees assessed in error. Sometimes, the best defense is a good offense.