PDF Version: Are Landlords’ Late Payment Fees Enforceable?
Case Commented On: 19007636 (Re), 2020 ABRTDRS 1 (CanLII)
Are the late payment charges that some leases provide for and some landlords demand from tenants who are late with the rent enforceable? Do they have to be paid? Like many questions about the law, the answer is “it depends.” Are the late payment charges a penalty? If they are, then they are not enforceable. Are the late payment charges a genuine pre-estimate of the landlord’s liquidated damages? If they are, then they are enforceable. I wrote about the distinction between penalties and pre-estimates of liquidated damages in 2017: see When are Late Payment of Rent Charges in Residential Tenancies Unenforceable? Nevertheless, now seems a good time to bring the issue up again for two reasons. First and most importantly, in the last week in January, Alberta’s UCP government changed the payment dates of the Assured Income for the Severely Handicapped (AISH) program and the Income Support program from four business days before a new month to the first day of that new month (or the last business day of the previous month if the first of the month is a holiday or weekend); see AISH and Income Support payment date change. The change takes effect March 1, 2020 although, because March 1 is a Sunday, payments will be mailed or directly deposited on Friday, February 28. With rent due the first of the month for many people, a lot of worry has been expressed about whether landlords will charge for late rent payments. Second, the Residential Tenancies Dispute Resolution Board (RTDRS), which hears the vast majority of the residential landlord and tenant disputes in this province, just published 19007636 (Re), a written decision that briefly discusses late rent payment charges. The RTDRS has just started making some of its decisions publicly available, and although the ABRTDRS CanLII database only contained 39 decisions as of February 3, it includes a relevant 2020 decision.