One-Time Fees and Penalty Payments

A landlord may ask for payments in the lease that are one-time, non-refundable payments. The lease should make it very clear that such payments are not part of the security deposit and are non-refundable. Any payment which is refundable becomes part of the security deposit and subject to detailed rules.

The lease may also include terms that impose financial penalties on a tenant if certain events take place. The most common example would be the late payment of rent. Penalty terms are legal, but they cannot impose a penalty that is much higher than the degree of loss suffered by the landlord.

As a tenant it is up to you whether or not you want to accept terms in your lease involving extra fees and penalty payments. You could choose to try to negotiate different terms with the landlord, accept the terms, or, find other accommodation. You should obtain a receipt from your landlord for any fees that you pay.

May 2005