Late fees on Lonnie Notes - Posted by Marc Donovan FL

Real Estate Investing Mobile Homes & Mobile Home Parks
#1

Posted by Blane (MI) on February 03, 2001 at 19:02:56:

Mark,

I charge $25 plus $3/day late fees on any delinquent interest and/or principal until it’s paid in full. Buyers know when the payment is due, and if it’s late, it’s their problem. If it gets quite large, whose fault is that?

I cut someone slack once, they tried to slide again, so had to put the hammer down. Fixed the problem. Plus, any late fees/charges are a nice kick to your yield. Why give it up? Some may handle it differently, but I don’t give it up unless absolutely necessary. My purchase agreement AND promissory are very clear about the charges. Hope this helps.

Blane

#2

Late fees on Lonnie Notes - Posted by Marc Donovan FL

Posted by Marc Donovan FL on February 03, 2001 at 14:19:59:

If they are late for thirty days, and then they make a payment, do you folks keep charging the late fees until thye are fully paid up? That could get quite large since it is a daily penalty.

Most of my buyers never get caught up if they get 30 days behind, so I have just been charging them for the 30 days penalty and then calling it even. Is this being too lenient? What is standard procedure for a commercial note? I have never seen a note that has a daily penalty, so I don’t know how to handle this, and the note itself is not clear about this. I know that a regular note charges a penalty every month until you are fully paid up, but how about the daily penalties?