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According to data from USAFacts.com (updated in July 2024), 46.8% of Ohio renters spent at least 30% of their income on housing in 2022, making them "cost-burdened." Cost-burdened tenants are more likely to pay rent late or even be unable to pay it.
As a Cleveland landlord, you have the right to get paid rent on time and charge late rent fees. However, you shouldn't just impose any amount. You must familiarize yourself with the average late fee for rent delinquencies so you can impose a reasonable amount for yours.
So, then, how much should you charge for late rent payments?
The experts at Remax Haven Realty have shared Cleveland landlord advice on rent payment guidelines and late fee regulations Ohio property owners must know, so please read on.
Average Late Fee for Rent Delinquencies in Cleveland, OH
Under Cleveland Code of Ordinances § 375.02 Terms of Rental Agreements, the total permissible amount for a late fee is $25 or 5% of the monthly rent. Landlords can charge whichever is greater.
Let's use the average rent Ohio landlords charge as an example. According to RentData.org, the average fair market rent (FMR) for a 2-bedroom unit in the state is $950 monthly.
In that case, you can charge $25. Alternatively, you can impose the higher (but still permissible) 5% of $950, which is $47.50.
Why Landlords Must Charge Reasonable Late Fees
Charging reasonable late rent fees plays a vital role in effective rent collection because it:
- Ensures tenants understand the importance of timely payments
- Encourages renters to avoid paying additional penalties
- Minimize the risk of overburdening tenants to the point they just leave because they can no longer afford rent
If you impose a late fee that's too low, tenants may take advantage of it and make late payments a habit. On the other hand, an exorbitant fee can make your renters unable to pay all they owe, forcing you to file for eviction in Cleveland, OH.
Tips for Implementing a Strategic Late Fee Policy
As a landlord, having a solid late fee policy is crucial for mutual success, and it starts with ensuring you put this rule into writing. You must clearly state this in the lease agreement and describe it in detail using plain, easy-to-understand language.
You should also regularly review your late fee policies. Stay updated on market trends and adjust your late fees accordingly.
Last but not least, provide tenants with informative resources. Share information on rental and financial assistance programs to help them avoid late payments.
By implementing these strategies, you can safeguard your interests while contributing positively to your tenants' rental experience.
Your Path to Effective Property Management
As you learned in this guide, the average late fee for rent delinquencies in Cleveland, OH, can vary widely, but the maximum is $25 or 5% of the monthly rent. Also, remember that while you have the right to choose whichever is higher, it's best to stay on the reasonable side. Otherwise, tenants will likely struggle to afford to live in your Cleveland rental properties, and you'll face higher vacancy rates.
If you're having trouble managing your rentals, our full-service property management firm, Remax Haven Realty, can help. We've assisted property owners and landlords since 2010 and have expertly managed thousands of rentals in Cleveland and Akron, OH.
Call us today to request your free rental analysis!
