2019 NRS Changes FAQs
The following FAQs are derived from the Legal Update Training series in July 2019. For the Training Slideshow, please click here. We will continue to update the FAQs periodically. If you have any questions or comments, please contact Penny Irvin: firstname.lastname@example.org.
FAQ No. 1: Is there a cap on late fees?
Yes, the new law caps late fees to 5% of the periodic rent.
FAQ No. 2: Can I charge service, admin or eviction fees for late payment of rent in addition to late fees?
No. Any fees related to the tenant paying rent late are capped at 5% of the periodic rent. Late fees are intended to capture the additional administrative time and expenses incurred as a result of the late payment of rent. Therefore, any additional “service,” “administrative,” or other fees (whatever you may call them) would be subject to the 5% cap and otherwise improper.
The only potential exception is the recovery of reasonable attorneys’ fees and costs, but you must meet at least four criteria:
- Your lease must have the appropriate attorney fee provision.
- You must have used an attorney in the eviction matter.
- The attorneys’ fees must be reasonable.
- You should follow your attorney’s advice on whether and how to recover the expenses on a case-by-case basis.
FAQ No. 3: What effect does the new late fee cap have on the late fee provision in the current lease agreement?
The new late fee cap limits the enforcement of any provision that is inconsistent with it. Therefore, you cannot enforce any late fee provision that requires the payment of more than 5% of the periodic rent. If your existing lease entitles you to collect less than 5% of the periodic rent, you will be bound by the lower contractual cap. Any updated lease agreement should properly state the late fee cap as expressed in the new law.
FAQ No. 4: Do I need to disseminate a notice informing all tenants of the new late fee cap?
No. The new statutory changes are a matter of public record.
FAQ No. 5: Should I charge a late fee on pre-existing late fee charges on the ledger?
FAQ No. 6: What charges should I include as periodic rent in the notice to pay or quit?
Subject to additional interpretation by the courts, we recommend that periodic rent include only those monthly charges which remain constant. For example, monthly rent and monthly pet rent (if applicable). We do not recommend the inclusion of the unpaid ledger balance as periodic rent for a non-payment notice to pay or quit. Charges that are not proper for the pay or quit notice may be pursued through other means (e.g., notice to cure or quit or separate civil action).