Note: an unfinished version of this note was presented to Cynthia (whose surname I’m still not sure of) at about 9:15 AM on April 7th 2015, along with money orders in the full regular amount of rent for my apartment for April ($1,250.00). I did not give her the additionally-demanded fifty dollars, and I received no receipts for the money orders, as had been given last month. (This fact does not worry me, as I have the serial numbers and proof of purchase.) Cynthia also received copies of California Civil Code Section 2-21 and a copy of the Court’s decision in Orozco v Casimiro, referenced here.
I have been informed that without the demanded $50.00, my rent is unpaid.
According to February 25th written instructions from Lagoon Bay Investments, payment is to be made by check or money order specifically not cash. For the first few months, evening collections are supposed to happen from the first to the fifth. This is awkward, out of the ordinary, and frankly just plain unprofessional. But I’m OK with letting them figure things out as they go along. Or I was, anyhow.
In-person collections have been attempted by Cynthia and Ozwaldo on Sunday, March 1st of 2015 and again on Sunday, April 5th of 2015. It should be noted that no attempt was made to collect the rent during customary hours of business or early evening on Wednesday, April 1st 2015, Thursday, April 2nd 2015, or Friday, April 3rd 2015. The first and only opportunity to make payment of rent was presented on Sunday, April 5th 2015.1
Civil code section 2-21, 7.1 (b) and (c):
Every Saturday and
Every Sunday are considered non-business days.2
On both the occasions of March 1st of 2015 and April 5th of 2015, I expressed polite dismay at being disturbed on a Sunday, a non-business day. On April the 5th, I informed Cynthia and Ozwaldo that it was unlikely that I would be able to obtain the necessary money orders before the end of the day, owing to the combination of being a Sunday, normally a non-business day, but additionally being Easter Sunday, a day when businesses which otherwise might be open on Sundays would be closed. I offered to present payment on April 6th, as was rightly my option.3 This offer was expressly refused. Cynthia informed me that the only option was to make payment prior to the end of the day on April 5th.
I told Cynthia and Ozwaldo that I would look for a place of business that would sell the necessary money orders, and telephone as soon as I had the money order in hand. However, as expected, my search for a business which would issue money orders on Easter Sunday was not successful.
Though I still believed that I was correct that it was my rightful option to present payment on the first business day following the non-business day on which payment was expected, I gave Cynthia the benefit of the doubt in this matter and considered myself to be late for most of April 6th. In the course of the day’s business, I procured money orders totaling the specified rent for April: $1,250.00. A few minutes later, I left a voicemail message stating that I would be on my way home and that I would be happy to make a detour to bring this payment directly to Cynthia and/or Ozwaldo.
There was no response to my phone call on the evening of April 6th, but when I arrived home there was a handwritten note from Cynthia which stated that a “Late Fee” of $50.00 was being added, and that the additional $50.00 would “need” to be paid.
Brief research online yields numerous examples of landlords refusing to accept payment of the normal rent if not accompanied by additional payments demanded, whether rightfully or wrongfully. It is against this possibility that I have documented these events, and printed out California Civil Code Section 2-21 and the 2004 judgment by the Appellate Division of the Superior Court of the relevent case known as Orozco v Casimiro.
In declining to pay the demanded $50.00, I assert the following:
- It was improper of Lagoon Bay Investments, LLC to provide no option for accepting payment other than to attempt collection at on non-business days.
- To pay on Monday April 6th in lieu of Sunday April 5th should not be considered late.
- Any additional penalty demand made on Monday, April 6th was improper, should not be considered valid, and can not be enforced.
- Proper payment was offered on Monday, April 6th, including an offer to deliver the payment rather than meet at the property.
- Payment of $1,250.00 on April 7th 2015 must be accepted by Lagoon Bay Investments, LLC or their representatives as the April 2015 rent for Apartment H, 838 Cedar Street in Alameda CA, and considered paid in full.
There are additional considerations.
There is no provision for any kind of late penalty in the existing lease. Were a new provision to be added it would be an alteration to the agreement-in-place. At the very least, 30 days warning of such a change would be required.
Furthermore, according to the document California Tenants, A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities published by the California Department of Consumer Affairs:
A rental agreement cannot include a pre-determined late fee. The exception to this rule is when it would be difficult to figure out the actual cost to the landlord caused by the late rent payment. Even then, the pre-determined late fee should not be more than a reasonable estimate of costs that the landlord will face as a result of the late payment. A late fee that is so high that it amounts to a penalty is not legally valid.4
Therefore, if Lagoon Bay Investments, LLC wishes to make some form of demand for additional payment in the event of a future incident, one of two things will have to happen:
- They and I will have to come to an agreement in writing about a reasonable amount to consider the default for “liquidated damages”.
- In the absence of such an agreement, receipts and possibly other evidence of specific and enumerable damages as the result of the claimed lateness in payment will have to accompany any such demand.
In turn, I must also insist on the following in my future dealings with Lagoon Bay Investments, LLC: first that ordinary business be conducted only on regular business days. Second, that I be permitted to make future payments by mail, like every other renter.
Finally, I presume no ill will on the part of Lagoon Bay Investments, LLC. In the absence of any evidence to the contrary, I assume that this situation is due solely to inexperience in the management of rental real estate, and to ignorance of California law in this matter. It is my genuine hope that these materials prove instructive and that this incident will not impede the establishment and development of a happy landlord/tenant relationship.
It will, however, be interesting to see whether their next move is to hand me a three day notice.
After the conversation the morning of the 7th, it’s clear that Cynthia expected us to go up to Ozwaldo to hand over the money. Ozwaldo is very nice, but there have been linguistic issues. He came by himself to hand out our rent increase notices. I chatted with him by the door for a few minutes. Then an hour later Cynthia came back because Ozwaldo had apparently been unsuccessfully trying to articulate that I had to sign the paper and return it to him. I did not assume that Ozwaldo carries the receipt book with him ↩︎
One might think that such an idea applied only to bank closures, except for 2-21, 11:
Whenever any act of a secular nature other than a work of necessity or mercy, is appointed by law or contract to be performed upon a particular day, which falls upon a holiday, it may be performed upon the next business day, with the same effect as if it had been performed upon the day appointed.` (Emphasis mine.)
It is very likely that I could have obtained cash before the end of the day of April 5th in order to satisfy the demand. However, Lagoon Bay Investments, LLC’s written communication on February the 13th of 2015 expressly states (possibly illegally) that cash payments would not be accepted. ↩︎
From http://www.dca.ca.gov/publications/landlordbook/catenant.pdf . On this point this document refers directly to Orozco v Casimiro. In that case, the amount of the fee in question was actually the same as here: $50.00. ↩︎