Bounced Check and Fees Charged

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Question:

I recently bounced a check and my landlord charged me a $30 service fee. Is that legal?

Answer:

It’s legal for landlords to charge tenants an extra fee if a rent check bounces—but only if you knew if advance (in the lease or rental agreement, orally, or by means of an obvious sign in the rental office where you bring your monthly rent) that the fee would be charged. But returned check charges (like late rent fees) must be reasonable. (Whatever the bank charges for a returned check, such as $10-20, plus a little extra for the landlord’s trouble, would probably be considered reasonable.) And some state rent rules set a limit on returned check fees. Landlords in California, for example, may charge $25 for the first bounced check, and $35 for each additional check.  State rules on bounced check fees are not always in the landlord-tenant statutes, so if you don’t see any information for your state on the Nolo’s chart of state rent rules, contact your state consumer protection agency.

Keep in mind that if you regularly bounce your rent check, you may face the unpleasant surprise of a tenancy termination notice, or a demand from the landlord that you pay the rent by money order or another cash equivalent.

For more advice on rent-related issues and other topics of concern to renters, see the Nolo book Every Tenant’s Legal Guide, by Janet Portman and Marcia Stewart. If you’re in California, see California Tenants’ Rights, by Janet Portman and David Brown.

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