Late Fee Fairness Act Provides Necessary Reforms
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On Monday, I testified before the D.C. Council’s Committee on Housing and Community Development in favor of the Late Fee Fairness Amendment Act of 2016 (“Late Fee Fairness Act”).  This bill would provide critical protections to District tenants and addresses many inequities that Legal Aid’s clients currently face.

Just recently Legal Aid represented a tenant who had been sued for nonpayment of rent who would have benefited greatly from the Late Fee Fairness Act. This tenant had tried to pay her monthly rent, in full and on time, but the landlord refused her rent because the landlord alleged she owed some late fees for a couple months that were paid late more than a year before. Eventually, the landlord accepted her rent but still sued her for eviction. The landlord said she was behind on her rent because the landlord credited her rent payment to the old alleged late fee balances instead of to her rent.

Legal Aid was able to represent this tenant, and the case against her was dismissed. The majority of tenants, however, have no lawyer. Without a lawyer in this situation, it is possible that our client could have faced eviction over late fees alone.

The Late Fee Fairness Act prohibits the accounting practice that was at the root of this tenant’s problem: landlords often credit rent payment to old late fees, rendering the tenant perpetually behind in rent and compounding late fees upon late fees even if only one month was ever paid late. This accounting practice is widespread, confusing to tenants, and unfair. The Late Fee Fairness Act eliminates this practice by prohibiting landlords from deducting late fees from future rent payments.

The Late Fee Fairness Act also limits late fees to five percent of any amount owed by the tenant. This is important because it protects tenants who pay the vast majority of their rent, but come up only a small amount short, from late fees imposed as a percentage of their complete monthly rent – most of which has already been paid. This protection is also critical for tenants who receive rental subsidies. Because the late fee is capped as a percentage of the amount owed by the tenant, the landlord will not be able to levy a late fee as a percentage of the full contract rent if the subsidy provider is late in paying its portion to the landlord.

In my testimony, I also urged the Council to make one more addition to the Late Fee Fairness Act: prohibit landlords from seeking non-redeemable judgments for possession for late payment of rent when the tenant has paid all rent and late fees due.  Non-redeemable judgments are permanent and final. There is no amount of money the tenant can pay to stay in the home. Under Legal Aid’s proposed addition, landlords would still be entitled to bring eviction cases against tenants for late payment of rent, but any judgment against the tenant would be redeemable by payment of all rent and late fees. This solution is fair to all parties: landlords would have no need to evict the tenant for late payments when the landlord has already been made whole by the payment of all rent and late fees then due.

The Late Fee Fairness Act would provide important protections for tenants in the District by prohibiting unfair accounting practices and regulating late fees imposed on residential tenants.

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