The Renter Battle With Late Payment Fees
New research suggests that once someone incurs one late fee, another is even more likely, columnist Lew Sichelman writes.

Only about half of all renters who get behind on their rental payments catch up in the following month, according to new research by the Consumer Financial Protection Bureau. Worse, the new research found that those who do pay late fees often pay them several times over a year’s time.
Late charges have risen steadily in dollar amounts over the past few years, according to the Bureau’s report. Consequently, it says, they are becoming a particular hardship on the majority of renters.
Indeed, “a significant portion of renters who incur an initial late fee struggle to recover,” the report said, resulting in continuing financial stress.
The likelihood of repeat fees
On the positive side of things, the data shows that fewer renters are late with their monthly payments than in previous surveys. The number of renters who paid late fees within the previous 12-month period hit a high of 23 percent in February 2023. But by last November, the number slipped to less than 14 percent.
Better yet, half of those who do incur late charges are able to “immediately bounce back” to paying on time. However, almost 60 percent of those who are behind in any one month find themselves behind in one or more months after that. And about 42 percent incur their second late charge in the month immediately following their first fee.
Over the preceeding 12-month period, moreover, more than 20 percent with at least one late charge are nailed with five or more “lates” in total. And about 30 percent are still experiencing late fees five months later.
“If a renter experiences one late fee, there a good chance they experienced another within the 12-month period,” according to the report.
The same goes for charges to renters who bounce checks. While they are “not quite the repeat occurrence that late fees seem to be,” according to the report, more than 20 percent of renters with at least on fee for insufficient funds had at least two non-sufficient funds charges.
Increasing costs
While the average late fee has risen from just over $70 in September 2021 to $84 in November, the fee for NSFs has remained stable at about $42 on average, the report shows.
The CFPB also found that the value of landlord write-offs increased over the three-year sample period but tended to level off at the end of that timeframe. The median value of non-rent write-offs rose from about $1,000 in September 2021 to $1,850 in November, while the median value of rent-write-offs rose from about $1,000 to $1,650.
A number of renters left the sample after a late fee was observed, suggesting—but not necessarily proving—that the renter has moved on, the report says. When they do move elsewhere, there is no way of telling if they become delinquent again at their next rental home.
The data for the report is derived from the initial use of new rental housing payment information the CFPB purchased to augment its Consumer Credit Information Panel. It provides monthly information on renters’ rental housing payments, delinquency status, lease information including contractual rent, and rental housing inquiries sourced from the vendor’s database. As of November, the rental housing payment data had some 74,000 consumers with recent payment histories.