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Commercial Tenants: Charging NSF Fees

Posted by capital on March 30, 2018
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Non Sufficient Funds (NSF) Fees

If the rent check is not honored by the bank on which it is drawn, the landlord and commercial property manager incur additional administrative expenses and inconvenience.  As commercial property managers we advise landlords to ensure the lease clearly states the consequences to the commercial tenant if the rent check does not clear.  We recommend a one hundred dollar charge for checks that are returned by the bank due to non sufficient funds and the right to require future payments be made by certified funds. For example, such a lease could state, “If on more than one (1) occasion during the Term any check for Rent shall not be honored by the bank on which it is drawn, Landlord may thereafter require that all future payments from Tenant be made by certified check, cashiers’ check, or immediate funds.  In addition, Landlord may assess a One Hundred Dollar ($100.00) charge for any check from Tenant returned to Landlord for insufficient funds.”

Keep in mind, NSF fees are not the same as late payments and should be separately addressed in the lease with commercial tenants.