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Last month, I moved into an apartment in Chicago, IL. This month, I was a day late with my rent check, so the landlord charged me a late fee. I asked if they could waive it and I was told they were unable to do so because if they waive this fee for one resident they are legally obligated to waive every late fee for every resident.

Is that true? I have never heard of such a law. In the past, I have waived late fees for my customers and I have had late fees waived for me. Do special laws exist just for the rental business?

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Well, there may be a statute in Chicago that makes this the law but at common law this is not true.

A party to a contract has discretion to act or not act on a condition or breach of a condition by the other party. They can do this once or a dozen times without necessarily waiving their future entitlements. An exception is where they choose not to act all of the time; in such a case unless there is evidence to the contract a court will usually find that the condition has been permanently waived.

Notwithstanding, exercising such discretion would have no impact on other contracts unless the exercise of discretion was done in an unlawfully discriminatory way (e.g. always waiving the fee for African Americans but never for other races).

Under common law, this would be a liquidated damages clause i.e. a payment for their costs in dealing with your breach. Such clauses must be a genuine pre-estimate of the actual costs incurred; if they are not then this is a penalty clause and unlawful - you may want to ask then to justify how the fee is a reflection of their costs in your being 1 day late.

I can't speak for Illinois but in Australia, the making of the statement would be misleading and deceptive conduct, a strict liability offence (i.e. it doesn't matter if they were trying to mislead or not) with significant ($1 million+) fines.

  • If a landlord were to selectively forgive late fees, they might open themselves up to charges of illegal discrimination on the basis of race, age, or other protected categories. That doesn't make the forgiving of a late fee illegal of itself, of course, but it might be a factor leading a landlord's lawyer, on legal grounds, to recommend against any ad hoc fee waivers. – phoog Mar 7 '16 at 23:56
  • Any links would be appreciated. – dgiard Mar 8 '16 at 1:33
  • If you and your landlord want to do this legally, he may create a rule that applies to everyone saying that if the renter is late for only 1 day and didn't do that for the last x months the fee is waived. Otherwise I think that he is just trying to excuse himself from waiving you this fee. – Gabriel Diego Mar 8 '16 at 1:42
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There is a mild indication that this is untrue in Illinois, here, which is from a Chicago law firm. They mention numerous legal restrictions on landlords including limits on late fees and the damages for illegal late fees. Given the level of detail included in their handbook, it is hard to imagine them forgetting to mention such a rule, if there were such a rule.

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