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Perspectives

Cooperative’s Late Fee Equivalent to 30% of Monthly Maintenance Held Excessive

A landlord, including a cooperative, may charge a reasonable late fee where it is authorized by the lease or other governing documents.  However, the amount of the late fee may not be disproportionate to the principal amount due.  In one recent case, the occupancy agreement for a cooperative apartment imposed a fee of $150 for paying the $494 monthly maintenance more than five days late.  The court held that “the provision in the House Rules charging [the tenant-shareholders] late fees of thirty percent of the monthly maintenance is unenforceable as a penalty, since it is clearly disproportionate to any loss that [the cooperative] may incur.”  Vernon Manor Coop Apts. Sec. II Inc. v. Brisport, 2019 N.Y. Misc. LEXIS 157, 2019 N.Y. Slip Op. 50035(U) (Mount Vernon City Court Jan. 16, 2019).