Late fees have been treated by the Court of Justice, and the Residential Tenancies Dispute Resolution Service as punitive, and as a result, unenforceable. Most often RTDRS Tenancy Dispute Officers will refer to the Court of Justice Decisions in Cracknell v Jeffrey 2001 ABPC 11, and 416566 Alberta Ltd. v Fothergill 2017 ABPC 96 which both go into great detail about why in terrorem penalty clauses in residential tenancy agreements are unenforceable due to their gross disconnection between actual damages to the landlord, and reality.
Now lets deal briefly with what I mean by In Terrorem. In Terrorem loosely translated means "in fear of" if the clause is intended, as it is in many cases, as a threat to be used to keep a tenant in line by paying rent on time, it is in fact a penalty, and not a genuine pre-estimate of liquidated damages, it is in my view a predatory practice that landlords use to keep their tenants in line, one that is well settled as an unconscionable, and therefore unenforceable.
The risk of course of not paying late fees is that your landlord may bring a claim to the RTDRS to enforce the Late Fee, or take the more drastic measure of issuing a notice to evict based on unpaid late fees, this is a common approach, and one that is dealt with by the Courts and the RTDRS on a regular basis. Should this happen reach out to a professional with experience in these matters.
None of the information above should be considered legal advice, this is merely exposure to legal information and each case will be fact specific.
Comments