{"id":293,"date":"2018-06-15T07:49:19","date_gmt":"2018-06-15T07:49:19","guid":{"rendered":"https:\/\/1appmaker.com\/landlords-corner-apartment-lease-agreement-late-fees-in-ohio\/"},"modified":"2018-07-26T09:03:44","modified_gmt":"2018-07-26T09:03:44","slug":"landlords-corner-apartment-lease-agreement-late-fees-in-ohio","status":"publish","type":"post","link":"https:\/\/1appmaker.com\/landlords-corner-apartment-lease-agreement-late-fees-in-ohio\/","title":{"rendered":"Landlord’s Corner – Apartment lease agreement Late fees in Ohio"},"content":{"rendered":"
Landlord’s Corner – Apartment lease agreement Late fees in Ohio<\/p>\n
A. Limits As To Amounts<\/p>\n
There are two lines of cases in Ohio which deal with whether courts will enforce lease provisions allowing a landlord to charge tenants for late fees. These lines of cases come to slightly different conclusions, but the bottom line is that landlords need to be very careful in charging tenants for late fees.<\/p>\n
The first line of cases comes to us from the Eighth Appellate District. In the case of Siara Management v. Nedley, 1992 Ohio App. LEXIS 5265 (Oct. 15, 1992) Cuyahoga App. No. 61433, unreported, the lease called for the tenant to pay $30.00 in late fees if he was late five days, and $70.00 more if he were late ten days. The landlord tried to charge these amounts to the tenant and litigation ensued.<\/p>\n
The Eighth Appellate District held that there is distinction between liquidated damages (allowable) and penalty clauses (not allowable) and that the court would use a three part test to distinguish between the two. Late fees would be allowable as liquidated damages if they were designed to compensate the landlord for damages which were:<\/p>\n
(1) uncertain as to amount and difficult of proof, (2) the contract as a whole is not so manifestly unconscionable, unreasonable, and disproportionate in amount as to justify the conclusion that it does not express the true intention of the parties, and if (3) the contract is consistent with the conclusion that it was the intention of the parties that damages in the amount stated should follow the breach thereof.<\/p>\n
In Nedley, the landlord did not make it past the first hurdle of the test. All that the landlord argued in court was that the late payment by tenants led to late payment charges assessed to the landlord by his creditors. The Court reasoned that “Any party due money could claim that the resultant decrease in cash flow might result in late charges against it. That is unduly speculative.” Had the landlord come to the court with evidence that the tenant’s late payment had caused him to incur damages in specific amounts, then those specific amounts might have been recoverable.<\/p>\n