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A residential tenant has an arrangement by which the tenant's bank automatically issues and mails a rent check to the landlord by US mail 3 days before the rent is due. This arrangement has been in place for several years, by agreement, with no problems. One month the check does not arrive. The landlord, after waiting for more than a week after the sue date, telephones the tenant to ask for the rent. The landlord also demands a 5% late fee.

The bank says that the check was duly mailed (first class, not certified or insured) on the usual date, and sends (by fax) a written notice to this effect to the landlord, at the tenant's request. It may be that the check was mis-delivered or not delivered by the USPS. The landlord's address has not changed. The check has not been presented for payment.

Obviously the tenant must pay the proper rent to the landlord. A replacement check would seem proper, along with a stop-payment on the original. But is the landlord entitled to t he late fee? If the matter were brought to a small claims court, would the fee be awarded to the landlord?

The tenant was originally under a written lease, but it lapsed and a month-to-month tenancy is in effect by verbal agreement and demonstrable practice over several years. There was no specific agreement on who is liable for errors by the postal service.

The tenant is in Maryland, the landlord is in Georgia. The landlord is a private individual, owning fewer than 10 rental properties.

An answer citing a state law, court decision, or relevant UCC section would be preferred.

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It’s the tenant’s responsibility to pay the rent

Not doing so, even for reasons beyond the tenant’s (but not the landlord’s) control is a breach of contract. It’s not enough that the tenant made reasonable effort - they have to succeed.

Breach of contract entitles the landlord to damages - it does not entitle them to a penalty. Damages are the reasonable costs and losses that the landlord suffered - e.g. anything reasonably charged by the managing agent and lost interest at bank rates. A penalty is a charge in a contract intended to punish the wrongdoer beyond damages - these are illegal in all contracts at common law.

  • Leases may include a damages clause for late rent that's above the landlord's true cost (foregone interest these days pretty much zero). It may be capped by state law. – Andrew Lazarus Sep 25 at 19:31

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