Starting September 1st, SB 1414, the bill signed by Greg Abbott to increase the flexibility of landlords to charge their renter fees for late payments, will go into effect.
In current statute, late fees charged by landlords must be proportionate to the landlord’s damages. However, SB 1414 alters the requirements landlords need to charge renters late fees. Advocates like David Mintz, lobbyist for Texas Apartment Association, see this as good business claiming a need for clarity.
After September 1st, landlords can charge up to 10% of the tenant’s monthly rent for apartments and 12% for single-family homes — with no justification for the amount of the fee as the new definition reads.
If a landlord wants to exceed the percent limitations for charges they need to prove the fee is reasonable to the increase.
Daniel Armendariz, housing advocate with Austin Tenants Council, said in a statement to Reform Austin, that fees and charges, of “uncertain damages”, are incapable of being precise and are consistently up to the discretion of the landlord.
Additionally, if tenants want to fight the fees and file a lawsuit, the landlord must collect the late fee before he or she becomes liable. Essentially, the tenant can’t challenge the fees until they have paid them.
Considering the current landscape of the Texas renter population, it’s easy to see why there may be cause for alarm. Low-income renters are already struggling with housing costs, according to the National Low Income Housing Coalition.
In 2017, approximately 843,060 Texan renters lived in extreme low-income households, with 89% of tenants facing significant cost burdens.
Finding a way to maintain the current system seems to be a recurring, glaring issue that continues to raise its head. Whether intentional or not, the current system benefits businesses over community and the statue appears to protect, or give an “out”, to the landlord.
Unfortunately, once rent payments are considered late, there’s not much renters can do to stop the cycle of late fees from piling on.