New York State commercial real estate lease question
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New York State commercial real estate lease question
I am a commercial real estate owner and I would like to know what New York State law says regarding how much of a late fee I can contractually impose on my tenants if they fail to pay their rent on time. I am in the process of drafting a new lease and I don’t want to put a clause in regarding late payment fees that could later be found to be too much. Thank you
Asked on June 22, 2009 under Real Estate Law, New York
Answers:
S.J.H., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
Technically, you can contract in your lease for whatever amount in lease fees that you wish. However, Normally with a commercial lease, late fees are usually capped at about 5% of the monthly rent or about $50 whichever is higher. So if the rent is $1,000, the late fee should be about $50. If the rent is over this it can be 5%. This is the standard theory for a commercial lease but again, it is not mandatory. However, in order for late fees and attorneys fees to be enforceable there must be a specific paragraph for each and each must be deemed as additional rent. If the words additional rent are not contained within the paragraph for late fees or attorney fees, they are not enforceable and will not be granted.
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