Class Action Plaintiffs Continue Attack On Residential Rent Late Fees

Plaintiffs' lawyers have recently taken aim at REITS and other owners and managers of multi-family property portfolios - filing class action lawsuits seeking damages and to invalidate late fee charges imposed under residential leases. In September 2014, Equity Residential was sued by tenants in East Palo Alto claiming that a $50 late fee was an illegal penalty. Last week, on May 11, Equity Residential was hit again with a second class action asserting similar claims in federal court in San Diego.  Plaintiffs in these cases attack the standard residential late fee on the theory that the fee exceeds the marginal interest that might have accrued during the time the tenant failed to pay his rent in a timely manner.  Plaintiffs also challenge an alleged "failure to timely advise tenants" that a late fee has been charged and the "practice of charging tenants additional fees for the late payment of fees, rather than rent," contending both are unfair business practices