For a California (Santa Clara County) commercial lease of a $750/mo office:
Is $250 plus interest an unreasonable late fee?
Is $500 an unreasonable returned check fee?
2 Answers from Attorneys
The $250 and $500 figures seem high, but I didn't know you could rent an office in Santa Clara County for as little as $750 a month.
If the landlord is asking, I'd say the charges sound unreasonable.
If the tenant is asking, I'd say we need to look at the overall picture before deciding. Maybe you were given a below-market rent on the premise that you'd never, never be late or bounce a check.
With respect to a late fee, a landlord cannot charge a late fee unless the lease or rental agreement contains a late fee provision. Late fees must be reasonable related to the costs that the landlord faces as a result of you paying rent late. A late fee that is so high that is amounts to a penalty is not legally valid. (Harbor Island Holdings, LLC v. Kim (4th Dist. 2003) 107 Cal.App.4th 790.)
With respect to the fee for the dishonored check, I suggest that you look at Civil Code section 1719, which limits what can be charged.
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