The Five W’s –
What You Need to Know About Fines and Fees in the South Carolina Residential Lease

By: Morgan Dunn – North Carolina, South Carolina Licensed Attorney with Brownlee Whitlow & Praet, PLLC

Who?

      Housing Providers can (and often do) charge residents fees for a variety of reasons. The fees most commonly found
in a lease are late fees for late payment of rent, rental payment being returned due to insufficient funds in their account, breach and termination of the lease. As a housing provider, the rule of thumb for charging a resident a fee or fine is to look to the lease. If the fine or fee is authorized in the lease, you may apply it to the resident’s account so long as the
fine or fee is reasonable. 

What?

• • Late Fees: In South Carolina, there are no statutory limits on late fees. Although there are no statutory limits, you should consider two things when setting late fees in South Carolina: 1) whether the late fees are “reasonable”, and 2) be sure
    the late fees are clearly stated in the lease agreement. An example of a reasonable late fee could be $100, or 5% of the base rental amount. In the alternative, a court would likely find a late fee of $750, or 60% of the base rental amount to
    be unreasonable, even if they are clearly stated in the lease agreement.
    
    • Please note that other states can and do set statutory limits on late fees. For example, North Carolina General Statute Section 42-46 limits late fees to $15.00 or 5% of the base rental amount, whichever is greater.
  • Insufficient Funds / Bounced Check Fee (NSF): Another very common fee associated with a resident’s monthly rental payment is a fee for “NSF”. South Carolina Code Section 34-11-70(a) does set a maximum fee of $30 for a bounced or returned check. This fee may be charged for each occurrence, which means that each time a rental payment is returned due to NSF, the landlord may charge $30.
    • Like with late fees, other states can and have set their own limitations on NSF fees.
  • Reletting Fees: In South Carolina, there are no statutory limits on fees associated with the resident’s early termination
    of a lease or the reletting costs associated with same. Like the fees above, reletting fees should be both reasonable and clearly stated in the lease.
  • Fines: Fines are a way for housing providers to offset costs associated with a resident’s breach of the lease.
    South Carolina law does not specifically address fines, but we recommend you keep two things in mind: 1) the fine must be authorized by the lease, and 2) the fine must be reasonable. For example, a court would likely strike down a resident fined $250 for leaving a bag of trash in the common area as unreasonable. Before you fine a resident for their breach,
    it is best to issue a warning to notify them that a fine will be issued. Once you issue the fine, you should also give the resident the opportunity to dispute it.
    

    When?

          In summary, housing providers may charge residents fines and fees for many reasons which include, but are not limited to, late fees, insufficient funds, breach of the lease, and reletting fees associated with termination of the lease. These fines and fees are permissible when they are authorized in the lease, the resident receives notice of the fine or
    fee, and the fine or fee is reasonable.

    Where?

          The general rule is that all fines and fees should be included in the lease agreement. Most leases include provisions
    wherein residents consent (or at least acknowledge) to incur charges related to late fees, insufficient funds, breach of
    the lease, termination of the lease, and more. Further, most leases also provide that residents may be responsible for
    legal fees if an eviction must be filed as a result of their conduct, and the housing provider is successful in that eviction. Housing providers may also add other fines and fees to the lease for things such as parking violations, violating the community rules, leaving trash and/or debris outside of the unit, and more. These and other specific fines and fees must be provided for in the lease. The best place to provide for these fines and fees would be in the terms of the lease, a specific addendum related to the fine (e.g. parking), or in a “Special Provisions” paragraph.
    
    

    Why?

          The premise behind fines and fees in the lease agreement is to provide housing providers with a mechanism to
    offset the costs associated with residents’ breach of the lease. For example, if a resident breaches the lease agreement
    by allowing its dog to urinate in the hallway and not cleaning it, the housing provider must incur costs associated with carpet cleaning. The housing provider is entitled to recover for unexpected costs caused by the breach. The same is
    true for the many different forms of fines and fees discussed throughout this article.
    
    

    If you have any questions or concerns about the fines or fees in your lease agreement or would like to add the same to your lease agreement, our firm of highly skilled attorneys are licensed in a variety of different states
    and can help you navigate these situations including state-specific nuances.

     
*The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information in this article is for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information. Viewers of this material should contact their attorney to obtain advice with respect to any particular legal matter. No viewer of this material should act or refrain from acting on the basis of information in this presentation without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.  Use of, and access to, this article does not create an attorney-client relationship between the reader and Brownlee Whitlow & Praet, PLLC or any contributing law firms. All liability with respect to actions taken or not taken based on the contents of this article are hereby expressly disclaimed.