getting raped by landlord?

Signed a new lease a year ago with our new landlord,anyways we used to pay around $3700 a year and a half ago,then negotiated a new lease for $4300 4-years for 1900sq.ft. Been paying rent on time over a year only to find out that i missed a payment on june 2007.I was never notified til last week and have tallied $10,000 in late fees.The company that handles the account said they sent dozens of letters which were sent back by post office but recently decided to certify mail a letter to our store address which is clearly marked on the top of every freakin check i’ve mailed for the past 5 years.

O.K. heres the kicker,now I also owe money for a "revised cost of operations"for 2007?

If you think the LL is going to try to charge you things they are not entitled to, hire an attorney that SPECIALIZES in leasing and property. Do it today. Have a read through your lease first though.

Your rights and obligations in this matter are established in your lease. In the absence of the topic being covered in the lease they are defined by state law.

Your address for notices under the lease will be included in the lease as will the time for giving and responding to them. The address on your checks is not relevant.

The amount of penalties and how they can be collected as well as intrest charges etc should also be in the lease.

Assuming the 10K includes the lease payment missed of $4300 and a late fee of maybe 10%, plus interest at 18%, a charge of a little over 6K is the most I would expect in a matter like this. It sounds to me like they are hitting you with a new late charge every month. If your lease says they can, then it is your own fault for signing it. If it does not say that then you need to read the section on late payments carefully. Whatever it says is what you are obligated to do.

On the other hand, sometimes a direct conversation with the LL can get a compromise solution worked out.

With regard to the 2007 costs, a common area expense reconcilliation is a normal and fair part of a lease. Again, this should be defined in the lease and the LL should be able to document the expenses. The nature of allowable expenses should also be defined in the lease, but if you did a sloppy job on the lease to begin with, I would expect this area to be a problem too.

All of this is why you should have excperienced professional help when it comes to signing a lease. The penalties, interest rates, fees etc are all negotiable. LL’s have a legitimate interest in getting paid on time, but they often try to stack up the costs in this area. Building operating expenses in a 3-net lease are passed to the tenants and subject to reconcilliation but LL’s will often add things to this area that should not be there. Again, if these items are allowed by the lease and you signed it, you are stuck with it.

Regardless of what your lease says, a judge may not agree with a landlord if the late fees are excessive. I am not sure about your state, but if a landlord tried to collect over five grand worth of late fees and interest on a $4300 rent payment that was missed in Florida they would not win in court. If I was you, I would pay the actual rent that you owe and include a note that you feel the late fees are excessive.

If you didn’t know you’ve missed a payment, I strongly urge you to review your payment account’s ledger and make sure you really DID miss a payment.

It seems suspect that they knew where to find you via certified mail, which should have been done within MONTHS of the payment not being there…not over a year.

I mean, people KNOW if they miss a payment and make payment arrangements if they have to miss.

Your whole accounting would be out of whack if you had $4300 extra in it, would it not?

My Landlord 2 years ago tried to pull this on me. I found the cancelled check and faxed it over to him. Possibly could be a clerical error.

I’ll be making some phone calls to see if we can resolve this.thanks for the info and motivation.

If you were running behind a month, didn’t your bill for the next month have the previous balance with all the late charges, etc…

Check your records.

“Never first ascribe to malice what can be explained by ignorance” (or mistake)

The guys are right, please do go back a review whether or not you actually missed the payment. You may well have made the payment or perhaps you sent the check but it was never cashed.

The comments about judges are misplaced though. Judges do act that way on residential leases. They are much more reluctant to mess around with commercial leases. The assumption is that a business lease (contract) is entered into on a more equal basis and the agreement made was made with eyes open. Not always the case, but it is the general practive to uphold leases rather than require change. You are also very unlikely to ever get in front of a judge over a 5K dispute. The legal fees will exceed that before you get to court. Most likely, your lease requires mediation or some other approach to dispute resolution in any case. Also, very likely, your lease will require the loosing party to cover the prevailing party’s expenses in the dispute.

My advice (remember, it is worth what you paid for it) is:

First, confirm whether or not the rent was paid or a check mailed etc. If the check was mailed and cashed, get documentation, if mailed but never cashed, ask for a compromise.

Second, if the rent was not paid, check your lease for several things: Clause regarding late rent and penalties, interest etc, clause regarding notice for address, dates, required time for response. Try to determine what the lease actually requires. Certainly you can ask for a compromise, but in the end, paying what the lease requires is going to be a LOT better than trying to fight it over such a small amount of money.

If the LL did not follow proper proceedure for notifying you they will need to back off on the interest cost. Very likely, the notice requirement says that they need to send the letter by certified mail. If so, the certified letter they sent was the actual notice under the lease and you have a chance to say that the interest needs to be adjusted. Bottom line CHECK THE LEASE.

On another topic, guys, I can tell you from several years of SCORE counseling activity, that MANY businesses are more than capable of missing a 4K payment and not noticing it in the cash flow. Far too many businesses simply look at total sales and the balance of available cash and not much else. This goes right along with the posts we see here all the time from pizza store owners that do not know how to figure out food costs or labor costs.