The brilliance of our Texas Legislature is on display again as a new law, HB 3101 which will go into effect Jan 2008, has been passed that will produce greater late fee income for landlords by ensuring that more renters pay their rent late. Undoubtedly, this is not the outcome hoped for by State Representative Rafael Anchia from Dallas, who boasted in this press release of his “ground-breaking tenant rights bill”, but in fact, the outcome will be more tenants paying more late fees. Of that I am sure.
The bill imposes a mandatory grace period for the payment of rents in Texas such that a landlord may not charge a late fee to a tenant unless the rent is more than two days late. This is in fact supported by the Texas Apartment Association as well as tenant rights groups, so what the heck am I talking about when I say it will result in tenants paying more late fee? Will it not benefit tenants to have a couple of extra days to get the rents paid? No, it won’t.
A grace period causes tenants to pay rent with less diligence than when no grace period exists. In other words, without a grace period, more renters will pay on time on the 1st and avoid late fees. With the grace period, tenants get confused about the actual due date because it’s a fuzzy date instead of the clear, hard line in the sand that the 1st represents. Let me further explain how I came to discover this.