Many landlords looking for help with property management in Salt Lake City ask the same two questions. They want to know how much they can charge for late fees, and they want to know how much of a security deposit they should charge. We’re going to address those questions today.
Charging Late Fees
When you’re charging a tenant late fees because rent isn’t paid on time, you typically don’t want to charge more than 10 percent of the monthly rent. Courts in Utah don’t like to see late fees climb any higher, and they don’t like to see daily fees on top of the late fee. So, take a look at how your lease is structured. If rent is due on the first, you might consider it late on the second, but sometimes landlords won’t charge a late fee until the fifth. You can structure it in different ways; just make sure you’re consistent. So if your monthly rent is $1,000 per month, a 10 percent late fee is $100. Sometimes, landlords try to charge an additional fee every day that late is rent after that late fee goes into effect. There might be an additional $5 per day charged until the rent is paid. However, the courts in Utah don’t like those daily fees. They want a one-time fee not exceeding 10 percent.
Choosing a Security Deposit Amount
The amount of your security deposit is typically determined by the market. Take a look at what other landlords are charging for houses that are similar in size, location, and condition. You can either be more competitive by charging a little less or provide more protection for yourself by getting as much as you can. The range in Utah is typically between 75 percent and 150 percent of the rent. That’s a wide range, but that’s where it is. Usually, we see the equivalent of one month. We have done videos and blogs in the past on security deposits and how to educate your tenants. Sometimes, people will want to use their security deposit to pay for their last month’s rent. Don’t ever allow that. Your tenants need to pay rent, and the security deposit needs to be left to protect your property and take care of any damages that occur.