A San Diego Landlord’s Guide to Late Rent Notices

Whether your tenant innocently misses a rent payment or their rent check is delayed in the mail, the odds are that as a rental property owner, you’ll have a tenant who pays the rent late.

Regardless of why a rental payment is late, landlords need to understand the next steps to help enforce the terms and conditions of the lease agreement. We will walk you through the ins and outs of late rent notices when to send them, what to include, and a free template to help ensure your tenants stay on top of their rent payments.

What is a Late Rent Notice?

A late rent notice is a written notice sent by a landlord to inform their tenant that the rent is past due. This ensures that the tenant knows they’re behind on their rent and the landlord has official documentation of the notification.

The rent notice also notifies the tenant of the total amount of past due rent, if there is a grace period, the length of the grace period, and the late fees that will be incurred outside of the grace period.

Why Do Landlords Use Late Rent Notices?

The obvious answer as to why a landlord would use a late rent notice is that they want to inform their tenants that their rent is overdue so they can recover the rent as soon as possible. But there are other reasons why sending a late rent notice is essential when your tenants do not pay on time.

A late rent notice serves the tenant with a formal, official notice that they have violated the lease agreement by not paying rent on time.
A late rent notice gives tenants the exact date that the rent must be paid to rectify the lease agreement violation.
A late rent notice documents that the tenant has paid the rent late. It can be used as evidence in the future to terminate the lease if late payments become a habitual occurrence.
Sending a late rent notice is the first step in the eviction process. While that may not be the original intention, the notice serves as proof that the landlord used a good faith effort to work with the tenant to remedy the situation.

What is a Grace Period?

A grace period is the time between the date the rent is due and the date a late fee is applied. California landlords are not required by law to give tenants a grace period. But if a landlord chooses to give a grace period and it is set out in the lease agreement, they are required to honor it.

For example, if rent is due on the 1st of the month and your lease outlines a 3-day grace period, a late fee for past due rent wouldn’t be charged unless the rent had still not been paid by the 4th of the month.

While it is not required in California, there are several reasons why landlords should consider offering a grace period of three to five days to their tenants.

Mistakes happen

We’re all human, and because of that, we sometimes make mistakes. People can get busy and forget to pay a bill or overlook the fact that rent is even due. If your tenant has a good track record of paying on time but has one slip-up, having a reasonable grace period can help increase the chance that good tenants will renew their leases.

Your payment system may cause delays

Depending on how you accept payment from your tenants, your payment system may cause a delay of a few days. While most landlords have moved to an online payment system, some tenants still prefer to send checks in the mail—giving a grace period can help cover any time that it may take for the check to arrive on your doorstep.

Account for banking slow-downs

Even with online payment systems, a tenant’s payment may not show up in your bank automatically. It can take until the following business day, especially if the 1st of the month falls on a weekend. The grace period ensures you aren’t jumping the gun when a payment has actually already been made.

How to Write a Late Rent Notice

Regardless of your grace period, a late rent notice should be sent out the business day following the rent due date. So, if the rent is due on the 1st, the notice should be sent on the 2nd. This ensures tenants are aware that they did not pay their rent—remember it may have been an honest mistake and not even on their radar.

Sending the notice immediately also reminds tenants of the grace period and of the consequences that come with not paying the rent within the grace period.

If you wait to send your late rent notice, tenants may miss the grace period without ever having realized that they missed their payment. That’s why it’s essential to send the letter the day after rent is due.

What to include in a late rent notice

A proper late rent notice should include all of the following information:

Date of the late rent notice.
Name of all tenants on the lease.
Name of the landlord or property manager.
Property address.
Amount of rent past due.
Grace period (if any).
Late fee amount if the rent is not paid in full by the grace period.
Total amount of rent due to become current.
Date rent must be paid before eviction proceedings begin.
Acceptable form of payment for the total rent amount due.
Consequences if the rent is not paid in full and for recurring late rent payments, such as a 3-day Notice to Pay Rent or Quit.

The late rent notice should be sent to the tenant in a way that ensures the landlord has proof the notice was received. A helpful option is a certified mail return receipt as proof of delivery may be needed by the court if you ever need to go to court for an eviction.

Should You Charge a Late Fee?

Establishing a late fee for rent payments is well within your rights as a California landlord. In California, landlords are allowed to charge a late fee that is a reasonable estimate of the cost that the landlord would incur because the rent is late and the lease agreement must include information about late fees.

Some of the reasons why landlords choose to charge a late fee to a tenant include:

Compensating you or your property manager for the additional effort it takes to send a late rent notice to get the tenant to pay their rent on time.
Using the late fee as an incentive to get tenants to pay their rent by the due date each month to avoid financial penalties.
Preventing tenants from falling into a pattern of late payments because there are no repercussions for their actions.

When tenants consistently pay late, it can affect your rental business. It can impact cash flow and result in a situation where your own payments, like your mortgage and operating expenses, are paid late.

How to calculate a late rent payment fee

Late rent payment fees are typically calculated as a percentage of the rent due or a flat fee equal to the same approximate amount.

So, if you charge $2,200 rent per month, the late fee would be calculated in one of two ways:

$2,200 x 5% late fee = $110
$2,200 flat fee = $100-$130

In California, landlords are expected to charge an amount that reasonably penalizes the tenant for paying the rent late. Because of this, percentage late fees tend to be harder to justify as a San Diego landlord since it can be argued that the same amount of admin work is needed for following up on late rent, regardless of how much the tenants are paying in rent. Flat fee is the safer and more defensible option based on California regulations.

As a benefit, a reasonable fee gives tenants a good reason to pay the rent on time going forward whereas a large fee can deter good tenants from renewing their lease.

Your Free Late Rent Notice Template

If you find yourself needing a late rent notice, this free template can be customized to remind tenants that the rent is overdue. This notice should be delivered as soon as possible after the rent due date is missed.

Download your free late rent notice template

Stay on Top of Rent Payments

Avoid late payments by enlisting a professional property management company to ensure all aspects of your rental run smoothly, including rent payments.

At Good Life Property Management, we believe life should be enjoyed, not spent sweating the small stuff. That’s why we set out to make property management easy. We care about you, your property, and your tenant. And we do it all so you can Live the Good Life.

Schedule a call to speak with one of our Good Life experts.

Late Rent Notice FAQs

How do you write a letter for late rent?

A letter for late rent or overdue rent should be sent the day after the rent due date. A good written late rent notice should include the date of the late rent notice, tenants’ names, property address, amount of rent past due, late fee, the grace period, and consequences if the rent is not paid within the allotted period.

How many days can you be late on rent in California?

The number of days a person can be late on their rent in California is determined by the lease signed. Leases should outline a grace period which is usually between one to three to five days. The grace period is used to give tenants the benefit of the doubt but should not be abused on a regular basis.

What is the 3-day notice in California?

A 3-day Notice to Pay Rent or Quit is used by landlords when they think their tenants are behind on their rent. This notice gives tenants three days to pay their back rent or be forced to move out (quit). The notice must be delivered in writing and is different from a late rent notice.

What can you charge for late rent payments in San Diego?

In San Diego, there is no law placing a limit on late rent payment fees. California law does state that landlords may only charge a reasonable estimate on what the late payment costs the landlord. Generally, 5% to 10% of the total rent is seen as a reasonable late fee.

If you found this article helpful, follow us on social media. We post daily tips to help you manage your own rental property:

Steve Welty

Steve Welty is the founder and CEO of Good Life Property Management. Since its establishment in 2013, Steve and his team have made owning rental property easy for over 1,000 San Diego homeowners.Their purpose is Life Improved–creating opportunity, enjoyment, and impact for their community is what matters most. DRE #01744610

Subscribe to our Weekly Newsletter

Join the 5k+ homeowners receiving Local Law Updates and Landlord Tips. Delivered to your inbox every Saturday at 6am PST.

Get in touch with us:

We make owning rental property easy.

Choose Your Next Step

We’ve helped over 1,000 San Diego landlords live the good life and we’re ready to help you too. Whatever you choose, you’re heading in the right direction. You will live the good life!