Late payments happen now and again, especially with half of tenants in the U.S. struggling to pay rent. But when is rent considered late? The answer depends on where your properties are and what the law says.
This article covers rental due dates, grace periods, common rent payment issues, and everything else landlords need to know about when is rent considered late.
Key takeaways:
- Rent is usually due on the first of each month but leases can have other dates and schedules for weekly, bi-weekly, or annual rent.
- Rent is late if a tenant pays after the due date or grace period.
- Grace periods give tenants extra time to pay rent without a late fee.
- If rent isn’t paid on the due date or before the grace period ends, landlords can charge a late fee.
- Having a clear payment policy and using online payment systems can streamline rent collection and help prevent missed payments.
When is rent due—standard rent due dates
Rent is due on the date specified in the lease agreement. The standard rent due date in the U.S. is the first of every month. However, landlords can choose any rental due date.
Most leases require rent to be paid monthly. There are certain situations where it makes sense for tenants to pay weekly, bi-weekly, or annual rent.
Weekly rent payments are common for short-term rentals. A bi-weekly rent arrangement is sometimes an option for longer leases to help tenants manage rent around their paychecks. Annual rent is often used in lease agreements for corporate housing or long-term commercial tenants.
What are lease agreement rent due date terms for tenants?
As a landlord, you need to be crystal clear about rent payment terms in lease agreements. Any unclear statements can lead to late or unpaid rent, impacting your cash flow. Here’s an example of a clear and unclear statement:
Clear statement: “Tenant agrees to pay a monthly rent of $1,200, due on or before the first day of each month. If rent is not received within five days after the due date, Tenant shall pay an additional late fee equal to 5% of the overdue amount.”
Unclear statement: “Rent is due on the 1st of every month with a 5-day rent grace period.”
The unclear statement lacks specifics about late fees and penalties, which can cause confusion or even disputes between landlords and tenants.
To make sure rent due dates and payment terms are clear, your lease agreement should answer these questions:
- What is the exact amount of rent due?
- When is the rent payment due each month?
- When is rent due when you first move in?
- Is there a grace period for late payments? If so, how long is it?
- How many days after the due date is rent considered late?
- What are the penalties or late fees if the rent is not paid on time?
- Can the rent due date be changed, and what is the process for changing it?
- Can you pay rent in advance, and how is it handled?
- What payment methods are acceptable (e.g., check, electronic transfer, cash)?
- Are there any discounts or incentives for early or automatic payments?
- Who is responsible for paying utilities and other additional costs?
- What happens if a payment is returned or bounces? Are there additional fees?
- Can the rent amount be increased during the lease term? If so, under what conditions?
How does rent work in the first month?
It’s standard practice to require the first month’s rent before a tenant moves in. Additionally, collecting a security deposit is essential to protect yourself against potential damages or unpaid rent.
Generally, the security deposit amount is equal to one month’s rent. However, some states allow landlords to charge up to two or three months’ rent. It’s crucial to familiarize yourself with state laws about collecting and managing security deposits, as some have specific limits on how much you can charge.
In Arkansas, there’s no maximum security deposit for landlords who own less than six properties. Otherwise, the amount is capped at two months’ rent. For example, if rent is $1,200 a month, the security deposit can’t exceed $2,400.
If a tenant moves in mid-month, they may need to pay prorated rent. Prorated rent is calculated based on how many days the tenant stays in the unit that month. Let’s say a tenant moves in on the 16th. If the monthly rent is $2,000, the prorated amount for 15 days would be $1,000.
Check out our blog: How to Figure Out Prorated Rent
How much should a landlord collect before a tenant moves in?
The total amount a landlord collects before a tenant moves depends on rental terms and the tenant’s situation. Here’s a breakdown of potential costs:
- First month’s rent: $2,000 (prorated if the tenant moves in mid-month)
- Security deposit: $1,000
- Move-in fees: $300-$750 (20%-50% of the first month’s rent)
- Pet fees: $50-$500 (one-time or monthly fee)
- Utility connection fee: $25-$100
Taking these numbers into account, a landlord could collect between $3,375 and $4,350 in total before the tenant moves in.
What is a grace period for rent payments?
A grace period is a set amount of time after the rental due date, during which tenants can pay rent without facing penalties, such as late fees. Grace periods are usually 1 to 5 days, depending on the lease and local laws. For example, if rent is due on the first, the lease might allow tenants until the 5th to pay rent without extra charges.
Is the rental grace period mandatory?
Grace period rules vary from state to state. Generally, the landlord decides how long the grace period is or if there is one at all. However, some states have made it mandatory for landlords to allow a grace period before charging late payment fees.
Here are some states where a grace period is mandatory:
| State | Grace Period |
|---|---|
| Arkansas | 5 days |
| Colorado | 7 days |
| Connecticut | 9 days |
| Delaware | 5 days |
| Illinois (Cook County) | 5 days |
| Maine | 15 days |
| Maryland (Baltimore, Montgomery County) | 10 days |
| Massachusetts | 30 days |
| Nevada | 3 days |
| New Jersey | 5 days (for senior citizens and recipients of social security benefits) |
| North Carolina | 5 days |
| Oregon | 4 days |
| Tennessee | 5 days |
| Texas | 2 days |
| Virginia | 5 days |
| Washington | 5 days |
| Washington, D.C. | 5 days |
Why are grace periods important?
Grace periods give tenants extra time to handle delayed paychecks or unexpected expenses. Even if your state doesn’t require a grace period, adding one to your lease can help build trust and show that you’re flexible.
Here are a few reasons why landlords offer grace periods:
- Payment delays: Gives tenants time to deal with payroll or bank delays.
- Processing issues: Accounts for issues with processing payments, such as incorrect banking details or transaction limits.
- Penalty protection: Helps tenants avoid late fees and bank charges for insufficient funds or bounced checks.
State regulations for rent due policies
State laws regulate most lease agreement policies, including rules for rent payments, grace periods, late fees, how to collect unpaid rent, and the process for evicting bad tenants. These regulations vary widely and can end up working in your favor or helping tenants, depending on the state.
Tenant-friendly states like Connecticut provide a 9-day grace period for late rent payments. Similarly, Massachusetts allows a 30-day grace period, offering tenants significant flexibility.
In contrast, landlord-friendly states like Alabama and California do not require grace periods, which allows landlords to charge late fees as soon as the rent is overdue.
Landlords should clearly outline how these laws apply to rental policies in the lease agreement. Review policies with tenants before moving in to make sure they understand what happens when rent is late.
When is rent considered late?
Generally, if tenants pay rent after the due date and the grace period has ended, it’s considered “late rent.” If they pay after the due date but before the grace period ends, it’s not considered late.
However, sometimes it’s not so straightforward. What if a tenant mails a check on the 20th, but you don’t receive it until the 3rd, is the rent late? This depends on the rule you follow to determine late payments.
Here are four ways to decide when rent is late:
- When the payment is initiated: The day the tenant schedules an online payment or mails a check.
- When the payment is withdrawn: The day when money is taken out of the tenant’s account.
- When the payment is received: The day money is deposited into your account or when you physically receive the check.
- When the payment is cleared: The day the money is fully deposited and available in your account.
For example, let’s say rent is due on the 1st with a 5-day grace period. A tenant schedules an online payment on the 5th, and the money reaches your account on the 7th. If your lease uses the cleared payment date, the payment is considered late.
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What if rent is due on a holiday or weekend?
If rent is due on a weekend or holiday, most lease agreements state it should be paid on the next business day. For example, if rent is due on a Saturday, the tenant would pay rent on Monday.
Rent payments may be received or deposited late due to delayed processing over weekends and bank holidays. Tenants should account for these delays when mailing checks or paying rent online.
Grace periods help solve this issue by giving tenants a few extra days to pay rent. If it’s not paid by then, you can charge a late fee.
What happens if the tenant pays rent after the due date?
As a landlord, you’re legally entitled to take action if the tenant doesn’t pay rent within the specified grace period. The first step is usually sending a late rent notice to tenants, outlining the rent amount and due date, grace period (if any), late fees (5% to 10% of monthly rent), and what happens if rent isn’t paid in full.
If rent still isn’t paid, you may send another warning (such as a notice to pay rent or quit) or an eviction notice, depending on the lease and local laws. For example, landlords in Nevada can charge up to 5% of the rent as a late payment fee and send an eviction notice citing “non-payment of rent” as a valid reason for eviction.
What should tenants do if they fail to pay rent on time?
Let your tenants know they should inform you or the property manager if they expect a delay in payment. Early communication can help you work with tenants to avoid late fees or potential eviction issues.
Share these tips with your tenants to help them stay on track with rent payments:
- Set up rent reminders: Use a calendar, phone alerts, or rent collection apps to remember rent due dates.
- Automate payments: Suggest setting up automatic payments through their bank or your online rental collection to avoid missed deadlines.
- Plan for rent in advance: Stick to a budget to ensure rent funds are ready before the due date.
- Use a separate account for rent: Keep rent money in a dedicated savings or checking account to avoid accidentally spending it.
- Know the late fee policy: Ensure tenants understand your late fee terms to motivate timely payments.
Practical tips for landlords—How to manage rent
No one has time to chase tenants around for late rent payments. Here are some tips for how to manage rent and get paid on time.
1. Have a clear payment policy
Lease agreements should have everything tenants need to know about paying rent, including:
- Rent amount
- Rent due date
- Payment methods
- Grace period
- Late fees
- Consequences for non-payment
- State rules and regulations
Consider offering incentives to encourage tenants to pay rent on time. These could be discounts on the rent price or reporting on-time payments to credit bureaus to help boost their credit scores.
2. Use online rent collection software
Paying rent with checks or cash can be inconvenient for tenants and can lead to late payments. Online rent collection is the best way to collect rent as a landlord. It’s faster, more secure, and provides a clear record of all transactions.
With Baselane, tenants can make one-time or recurring rent payments online via ACH or credit card, view payment history, and track deposits with landlord rent receipts. Rent reminders and late fees are all automated to help tenants stay on track and enforce payment policies without manual intervention. Payments are deposited directly into your account and auto-tagged to properties and income categories with Baselane’s built-in banking and bookkeeping.
3. Have a grace period
Offering a grace period for rent payments can be beneficial for both parties. It gives tenants time to handle any unexpected issues that could delay their rent payment. These extra few days can reduce your chances of dealing with bounced checks and late fees, saving everyone time and money.
4. Enforce late fees
Late fees can encourage timely payments and compensate for any inconvenience caused by late rent. Clearly state the late fee policy in your lease, including when fees apply and how much they will be. Make sure your fees comply with local laws.
5. Security deposits
Collect security deposits before tenants move in to cover potential damages or unpaid rent. Follow state regulations for collecting and returning deposits, and how to handle security deposit deductions if you need to make any.
Final thoughts
There’s always a chance you’ll deal with tenants paying rent late, but having a clear payment policy and implementing processes can reduce the chances of that happening.
One way to do that is by collecting rent online with Baselane. Automate rent invoices, reminders, and late fees, and easily track rental income with built-in banking and bookkeeping all in one place. Get started for free today!
FAQs
Is rent due on the 1st or 31st?
Rent is due on the date specified in your lease agreement, which could be the 1st, 31st, or any other date. Tenants should always check their lease for the exact due date. Using a rent collection app like Baselane ensures tenants receive automated reminders about upcoming due dates to avoid late payments.
Do you have to pay rent by the month?
Rent is typically paid monthly. However, some lease agreements allow weekly, bi-weekly, or annual rent payments if both parties agree. Online rent collection platforms like Baselane let landlords customize payment schedules and set up automated rent due reminders.
Do you pay rent for the month ahead or behind?
Rent is usually paid in advance, meaning tenants pay at the start of each month for that month’s occupancy. This ensures landlords receive funds before the property is used. The best rent collection apps let tenants schedule one-time payments in advance or set up automatic monthly rent payments.
Can the landlord change the rent due date?
Yes, a landlord can change the rent due date if the landlord and tenant agree. The new rent due date and agreement must be in writing and signed by both parties. Any adjustments must comply with state and local rental laws.
Can a tenant stop paying rent due to mold?
Mold is a serious issue, but it doesn’t automatically justify withholding rent. Tenants and landlords must address mold concerns according to local laws, ensuring both sides meet their obligations. Most states specify the number of days a landlord has to resolve the issue. If it’s not fixed by then, the tenant may have a legal right to withhold rent due to mold.
How do you remind tenants that rent is due?
Landlords can send reminders a few days before the rent due date via email, text, or written notice. The reminder should include the rent amount, due date, and payment instructions. Baselane’s system automates these reminders, saving you time and the hassle of chasing tenants.
