Unregulated late charges lead directly to their unlawful use by landlords as penalty amounts, windfalls unrelated to the cost of collection or loss of use of the late payment. Case law so dictates, but is ignored or gamed by discounting rent if paid before it’s delinquent. Late-charge legislation controlling mortgage lender late charges and the grace period for delinquencies has kept lender conduct in line with the best interests of society, limited to the lender’s actual costs — no profit permitted for collection efforts.
Related article:
Real Estate Property Management, 5th Edition, Chapter 22, “Other amounts due under three-day notices,” 2010, Renaud 177
