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Monday, June 27, 2022
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©2022 by the Self Storage Association (SSA). SSA and SSA Magazine are trademarks of the Self Storage Association, Inc. Opinions expressed by authors and other contributors do not necessarily reflect those of the SSA, publisher or editors, nor do they represent the policy or positions of the SSA. Information contained within articles should not be construed as the primary basis for legal or investment decisions.

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Your Late Fees May Not Be The Only Fees That Your State Regulates: Understanding Bank Charges Under State Law

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Your Late Fees May Not Be The Only Fees That Your State Regulates: Understanding Bank Charges Under State Law

A lot of attention has been generated recently regarding what “late fees” may be charged by self storage operators to their tenants based on state law requirements. In the last few months alone Florida has approved a late fee law which provides that the facility may charge a late fee of “$20, or 20-percent of the monthly rent, whichever is greater”. Similarly, New Jersey also recently passed a late fee law providing that storage operators may charge their tenants a late fee of “$20.00 or 18 percent of the monthly rent, whichever is greater.”

 

These late fee laws continue to grow throughout the United States, having already previously been enacted in over 20 states, with a number of states to consider such laws during their 2018 legislative sessions. The states to have some form of late fee laws already include California, North Carolina, Ohio, Illinois, Michigan, Washington, Missouri, Tennessee, Wisconsin, Louisiana, Arizona, Arkansas, Oregon, Kansas, Kentucky, Maryland, Massachusetts, Nevada, Montana, Nebraska, West Virginia, Maine, Delaware and Rhode Island.

 

But are late fees the only fees that are regulated by the states? Lien notice fees are not regulated, nor are lock cut fees, advertising fees or sale fees. But NSF fees are. The fees for a tenant having issued a check with “Non-Sufficient Funds” are regulated by your state banking laws.

 

So what is a NSF fee? If a tenant writes a check from a closed account or an account with insufficient funds to cover the payment, both the bank can charge the customer for issuing of bad check AND the recipient of the check (in this case the self storage facility) may ALSO charge a fee for the aggravation of dealing with the bounced check, including the bank fee that the facility itself may be charged for having presented the bad check (sometimes called a “return deposit fee”).

 

Just like with late fees, these NSF fees are different in every state. Some permit fees that are based on the value of the bounced check, some permit fees based on a percentage of the check amount, some permit both the reimbursement of the bank fee plus an additional fee and some just have standard maximum fees (most state range between $20.00 to $30.00). So, if you haven’t checked your state law recently as to what you can charge your tenant for their bounced check, it may be a good idea to verify the current status of the law and make sure that you are charging enough to cover your expenses if the rent check bounces!

| Categories: Legal, Legislative / Regulatory | Tags: Late Fees, State Laws, Fees | View Count: (12187) | Return
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