Earlier this week, Councilmember Anita Bonds introduced the Rental Housing Late Fee Fairness Amendment Act. Legal Aid is delighted to support this Bill, which provides critical protections for tenants in the District of Columbia and addresses many situations with which our clients frequently struggle.
Legal Aid’s housing attorneys frequently represent clients facing significant difficulties, including the risk of eviction, because of unfair late fee practices by landlords in the District. For example, tenants receiving rent subsidies are sometimes assessed late fees based on the subsidy provider’s failure to pay its portion of the rent. This means that a tenant with extremely low income, whose own tenant portion of the rent could be zero, could be assessed a $50 late fee for the subsidy provider’s failure to pay its portion of the rent. Furthermore, a tenant whose own portion of the rent is only $25 could, by being just one day late in paying that rent, face a $50 late fee. Tenants who do not receive subsidies also often face unfair late fees. For example, a tenant whose rent is $1000 who comes up short one month and pays only $990 could face a late fee of $50 – a sum disproportionate to the $10 that are actually late.
In addition, many landlords abuse an accounting practice in which they apply all payments to the last outstanding payment in order to charge late fees upon late fees. For example, if a tenant pays his January rent in full, but two days late, he may be assessed a $50 late fee. If he then pays February on time and in full, but does not pay the $50 late fee imposed in January, the landlord will often then charge another $50 late fee in February, and so on moving forward. This puts the tenant perpetually in debt and at risk of eviction. It also creates unnecessary confusion for tenants who are paying their rent and yet still are getting further and further behind each month.
The Bill introduced by Councilmember Bonds would address each of the injustices described above. First, the Bill will limit late fees to a maximum of 5% of any amount due and unpaid from the tenant. This means that the tenant who comes up $10 short in rent one month will be charged only fifty cents in late fees – an amount proportionate to the actual late payment. In addition, this provision would prevent the landlord from charging the tenant a late fee when a subsidy provider – through no fault of the tenant – fails to make its payments to the landlord.
In addition, the Bill limits landlords to charging the late fee only in the month in which the payment is actually late. This provision provides tenants with protection from the currently common vicious cycle of late fees upon late fees, burdening tenants with unfair debts for a simple inability to pay one month of rent on time.
Finally, the Bill provides important remedies that we hope will encourage compliance with the law even in cases in which a tenant is unable to connect with an attorney and enforce their rights in court. By providing for treble damages (to be paid to the tenant) when a landlord violates the late fee laws in bad faith, this Bill communicates to landlords that the city expects, and demands, full compliance with the law. This provision should also deter landlords from bringing eviction cases based on unlawful late fees, protecting tenants from unnecessary litigation and stains on their rental histories.
In our December 2015 testimony regarding the Residential Lease Amendment Act of 2015, Legal Aid described many of the problems with the current late fee practices of many District landlords. Legal Aid is grateful that the Council heard this testimony and took action to address these problems. We look forward to a hearing on the Rental Housing Late Fee Fairness Amendment Act and to supporting the Bill as it moves through the Council process and hope that its crucial tenant protections will become District law.