Adding late fee policies makes it easy to handle delinquent residents. You can automatically charge a late fee when a resident is past due and notify them by email.
Buildium can calculate late fees at a global level, by property or association, and by lease. The most specific policy always takes precedence. You need to set up a global policy first, then enter the more specific policies when necessary.
To set up a global late fee policy
Navigate to Settings, Application Settings, click Late fees, and turn on Automatic late fees at the top. You can then:
- Select which accounts are eligible for late fees
- Set late fee rules
- Apply limits and which account handles late fees
- Set your communication preferences
Select accounts eligible for late fees
Under Income accounts, click Edit to select specific income accounts on which you want to charge late fees and then Save accounts. You can choose for all late fee payments to go to Late fee income, or split the late fee payments between different general ledger accounts. This is helpful if you split the late fee income with the property owner.
By default, Income accounts are set to All current and future accounts, which means that you will charge late fees on any outstanding balance for a resident.
Set late fee rules
You can set up to 2 late fee rules. Click Add rule to then choose a Grace period and Frequency and amount of the fee you want to charge.
A grace period tells Buildium how many days you want between when the payment is due and when the late fee charge posts. The day the payment is due does NOT count as a grace period day. For example, if a payment is due on the first of the month and you want the late fee charge to post on the fifth, you need to enter the grace period as 3 days. The second, third, and fourth of the month are the grace period days, and the late fee charges on the 5th.
Once you've set the grace period, choose whether you want the fee to be charged one-time or daily under Frequency and amount. Then select from the following fee types -- Fixed amount, % of outstanding balance, or % of recurring charge(s) -- specify the amount to be charged or the percentage to be applied, and click Save rule.
Apply limits and fee handling
Next, click Edit under Limits and fee handling to set limits for when you would like to start charging late fees.
For example, if you only charge a late fee when the balance is over $100, check Apply late fees over a certain amount under Limits and enter in $100. Or if you want to set a cap on how much a resident is charged, select Set maximum monthly charge (per month) and enter in the amount.
Next, under Fee handling, set how you want the fee to show up on the ledger when it posts. By default, this is set to Late Fee Income, which means that when a tenant logs into their Resident Center account and a late fee is posted, they will see a late fee charge on their ledger so they know exactly why they owe the additional amount.
Click Save once you've set the limits and fee handling account.
Set communication preferences
If you want a past due notice email to be sent to residents when a late fee charge posts, check the box to Email residents once late fees are applied and click Save settings. If you're just getting started with Buildium, it's recommended to keep this option turned off until you've fully entered all of your data and are ready to go live.
To set up specific late fee policies
- Click here to learn how to set up a property late fee policy
- Click here to learn how to set up an association specific late fee policy
- Click here to learn how to set up a lease specific late fee policy