The landlord and tenant agreement policies differ from province to province.
Some provinces are very specific when it comes to how much can be charged in late fees. Some have a maximum dollar amount, some have a maximum percentage.
Alberta laws on this matter are a little more open and vague.
Can a landlord charge late fees in Alberta?
Yes, a landlord can charge late fees for rent in Alberta.
They can charge a fair amount that represents an ”estimate of damages”.
For example: if a late rental payment leads to a landlord missing a mortgage payment, the landlord may experience extra interest or late payment fees.
They can charge late fees to the renter for every day that the rent is late. As long as this amount is considered reasonable. If it’s way too high, it could be considered a ”penalty” which is illegal.
All of this can seem very loose and subjective. These matters are debated and settled through the court system and the RTDRS.
Here is the exact phrasing from the government of Alberta.
LATE PAYMENT OF RENT FEES
Some residential tenancy agreements allow for a late payment of rent fee.
The charge is usually a daily amount for each day the rent remains unpaid. The courts or RTDRS do allow for an estimate of damages.
For example, a bank may charge additional interest if a landlord is unable to make a mortgage payment because the tenant did not pay the rent on time.
A late payment of rent fee that would cover the interest charged by the bank could be a valid estimate of liquidated damages, if they exist.
If however, the late payment of rent fee is far more than the amount the landlord is being charged, then it may be found by a court to be a penalty – and penalties are illegal.
