Late Fees On Invoices

[OllieGarchy]

I have two questions. This is in regard to a VA appraisal:

1. On the invoices you prepare, what is the wording you use for possible penalties or interest charges for late payments? This, of course, would pertain to the lender and not the VA.

2. I'm here in California. I think the maximum late fees charges are 1.5%/monthly if your fee isn't paid within a reasonable time. Is this correct?

Thanks in advance.

 

[The Warrior Monk]

Late fees have to be agreed to by you and the client beforehand. In fact, many clients include penalties in engagement letters to the appraiser if the appraiser doesn't deliver the report on time, as well as for other matters. Noting a late fee on the invoice that the client did not agree to is not enforceable, and they don't have to pay it.

 

[Stantheman]

We had to implement late fees, mostly on VA appraisals where the point of contact wouldn't respond. These are not our typical clients and 20% of the time we had to chase after them for things like $100 re-inspection fees.

"Late fee of $15 per month will apply after 30 days of the date of invoice."

VA allows late fees and we have other clients paying them also. If they are a new client we inform them of the late fee in the engagement letter, nobody nowadays seems to mind.

 

[OllieGarchy]

This is specifically for a VA appraisal. Per the VA: "If a payment has not been made within 30 days of billing, a reasonable late charge not to exceed State usury statutes is authorized." Since the appraisal orders come via the VA, I'm guessing I don't have to make late payment arrangements with the lender since they should be fully aware of VA regulations.

 

[glenn walker]

Pursuant to California law, non-exempt lenders (the average individual) can charge a maximum of: (i) 10% interest per year (.8333% per month) for money, goods or things used primarily for personal, family or household purposes and (ii) for other types of loans (home improvement, home purchase, business purposes, etc.) *** Late fees have to be agreed to by you and the client beforehand and normally that would be a flat fee and not a monthly interest rate because your appraisal is not a loan even though you may feel like it is : ) LOL

 

[Don Clark]

This is specifically for a VA appraisal. Per the VA: "If a payment has not been made within 30 days of billing, a reasonable late charge not to exceed State usury statutes is authorized." Since the appraisal orders come via the VA, I'm guessing I don't have to make late payment arrangements with the lender since they should be fully aware of VA regulations.

Where in the VA Handbook is that quoted? Not saying it isn't there.

 

[OllieGarchy]

Where in the VA Handbook is that quoted? Not saying it isn't there.

Hi Don,

Here it is:
http://www.benefits.VA.gov/HOMELOANS/documents/docs/phoenix_fee.pdf (under Late Charges)