15

My landlord has a late fee clause in our lease, which says that if the lessee is late with the rent, the lessor must pay a (poorly defined) late fee.

What would be the effect of this clause?

  1. The lessor pays the late fee to themselves, making the clause inoperable?
  2. The lessor pays the late fee to the lessee, making me happy?
  3. The clause would be considered invalid?
  4. Something else?

Also, the lease contains no severability clause, so if it's option 3, would the whole lease be void? Or voidable?

  • 5
    As it turns out, the lease has a $95 check bouncing fee, which is illegal in California. – David Aug 17 at 16:34
  • 1
    @David Landlord-tenant law in CA is generally very tenant friendly. The exact rules and procedures vary from city to city, so you might google your city + landlord + tenant to see whether you can find out more about your options. – Just a guy Aug 17 at 17:20
  • 1
    Looks like a good argument for defining the terms "landlord" and "tenant" and using those in the contract instead ;) – Caius Jard Aug 17 at 19:49
42

Dale is right; here are the details from CA statutes:

Since 1872, CA law has told CA courts to assume the parties to contracts in CA are reasonable, not crazy. If the literal reading of the contract is crazy, the California Civil Code's rules for the Interpretation of Contracts tells its courts: ignore the crazy reading.

Here is what the statute says:

§ 1636 A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.

To win under this section, you would need to claim that both you and the landlord intended that the landlord would pay the late fee. No judge would believe this.

§ 1637 For the purpose of ascertaining the intention of the parties to a contract, if otherwise doubtful, the rules given in this Chapter are to be applied.

To win under this section, you would need to claim that there is no doubt that both you and the landlord intended that the landlord would pay the late fee. Again, no judge would believe this.

§ 1638 The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.

To win under this section, you would need to claim that it was reasonable that the landlord would pay the late fee. Again, no judge would believe this.

§ 1640 When, through fraud, mistake, or accident, a written contract fails to express the real intention of the parties, such intention is to be regarded, and the erroneous parts of the writing disregarded.

To win under this section, you would also need to claim that both you and the landlord really intended that the landlord would pay the late fee. Since no judge would believe this, any judge would rule that the wording was a mistake, and should be disregarded.

§ 1643 A contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties.

Ditto.

| improve this answer | |
  • 12
    "To win under this section" That language is a bit problematic. A person doesn't succeed, an action does. Your answer seems to be focused on whether the action of forcing the landlord to pay the fee would succeed, and is unclear as to whether you are asserting that you think the action of forcing the tenant to pay the fee would. – Acccumulation Aug 17 at 15:58
  • 4
    I find this answer very confusing, and I think Acccumulation's comment explains why. The OP never explains his goal; I assumed that his goal was for the tenant to get out of paying the late fee, but I now realize that this answer assumes that his goal is to force the landlord to pay the tenant the late fee. – ruakh Aug 17 at 20:24
  • 2
    @mustaccio: Could you post that as an answer, then? (Or edit this answer to add that information?) Currently, if I understand correctly, this answer aims to explain why the OP's possibility #2 won't happen. Your comment explains why the OP's other listed possibilities won't happen. Taken together, they explain what actually will happen. – ruakh Aug 17 at 21:37
  • 2
    @mustaccio: OK, fair enough. (Also, thanks for explaining this! Quite aside from the matter of improving the answer, I had no idea that that was the case. I had naively assumed that a court might "strike down" a problematic part of a contract, analogously to how it might strike down an unconstitutional part of a law.) – ruakh Aug 17 at 22:53
  • 2
    If you're going to interpret this under California law, you'd also want to consider Orozco v Casimiro. Short Summary: even without a typo, the late fee clause is probably unenforceable. In California you have to either charge for actual losses ("my check bounced, so he needs to pay the bounced check fees.") or show that computing those losses would be unreasonably difficult (which is rarely possible). Other than that, you're limited to charging interest at 10% APR. – Jerry Coffin Aug 18 at 15:22
16

The typo is corrected

If the context makes it clear that the correct party to pay the fee is the lessee not the lessor then that’s how it will be read.

It is not a requirement of contract interpretation that people check their brains at the door. If a clause makes no sense as written but makes perfect sense if a common typo is fixed then the typo will be fixed.

| improve this answer | |
  • 1
    Ambiguity is meant to operate in favour of those who didn't draft the contract though, right? – David Aug 17 at 4:22
  • 12
    @David but it’s not ambiguous- it’s clearly wrong; no ambiguity in that. – Dale M Aug 17 at 4:23
  • 5
    @David "operate in favour of those who didn't draft the contract though". You are referring to the doctrine of contra proferentem, but here it is unavailing because contract law is premised on possible interpretation(s) being reasonable. See Mey v. DirecTV, U.S. Court of App.4th Circuit (Aug.7, 2020) ("contracts "should never be interpreted so as to create an absurd result, but instead should receive a reasonable interpretation, consistent with the intent of the parties""). – Iñaki Viggers Aug 17 at 8:41
  • 5
    What would happen if, for some strange reason, the contract was intended to be interpreted the way it was written? – user253751 Aug 17 at 16:26
  • 5
    @user253751 Where a "sensible reading" law such as Just a guy describes is in effect, I would imagine the contract would have to explicitly acknowledge that law's existence with some kind of "Yes, we know this sounds silly, but this is what we really mean" clause. – TripeHound Aug 18 at 5:02
7

In addition to the existing answers, it seems you may be overlooking some basic matters.

  • As long as you pay in time, nothing happens.
  • If you pay late and the lessor doesn't do anything, nothing happens.
  • If you pay late, the lessor claims his late fee, and you pay, nothing happens.

The courts deal with conflicts. No conflict, no court case.

  • If you pay late and the landlord sues you, there will be a court case.

At this point you are being sued, so the lessor must put forward a claim. He'll claim that you must pay a late fee, and he'll need to provide evidence. Let's ignore evidence, the question is about the contract. The duty to show that a late fee is agreed upon lies with the landlord, since he is suing you and not the other way around.

The landlord will show the contract, and claim that the wording is an obvious, trivial error (see the other answers). You may attempt to refute the claim, since you're the defendant, but likely the judge will side with the landlord for aforementioned reasons.

| improve this answer | |
  • 1
    Or the landlord tries to evict based on not paying the late fee. Or OP pays late and takes the landlord to court to recover a late fee :) – Jason Goemaat Aug 19 at 17:11

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.