Setting Up Auto-Pay and Late Fees That Tenants Actually Follow

Rent collection has two moving parts that tenants care about deeply: how they can pay, and what happens if they pay late. Landlords who leave either one vague end up negotiating case by case, which invites disputes and makes enforcement feel arbitrary even when it is not.

A written, automated policy solves this because it removes judgment calls from the monthly routine. When auto-pay is available and late fees post the same way for everyone, tenants stop asking “will you actually charge me?” and start treating the due date as real.

Tenantivo separates the two concerns cleanly: Allow auto-pay controls whether tenants can enroll in recurring rent, and a set of late fee rules on Payment & Stripe control what happens when a payment is missing after the grace period. Both live in the same place your team already visits to manage tenant charges.

Auto-pay is opt-in and tenant-initiated. From their portal, a tenant with a saved payment method can enroll in recurring rent themselves — you are not setting up a recurring charge on their behalf every month.

• Allow auto-pay is a master switch on your organization’s Payment & Stripe settings. If it is off, tenants will not see an enrollment option at all, no matter what payment method they have saved.
• Tenants enroll using a saved card or a linked US bank account (ACH). A bank account has to finish verification before it can be used for recurring charges — an unverified account cannot be enrolled.
• Enrollment sets the amount, what the recurring charge is for (rent, utility, or another category), how often it runs, and—for monthly rent—which day of the month it charges.
• Once enrolled, the recurring rent line disappears from the tenant’s manual pay grid so they are not tempted to pay twice, and your team can see the enrollment status from the tenant’s payment history.

Open Account portal → Configuration, select the Payment & Stripe tab, and set your organization’s default rent and late fee structure. These defaults are the starting point you will apply consistently across your portfolio:

• Rent due day of month — any day from 1 to 28, so the setting works cleanly in every month regardless of length.
• Grace period (days) — how many days after the due date a tenant has before a late fee can apply, from 0 to 30 days.
• One-time late fee — a flat dollar amount charged once a payment is late past the grace period.
• Daily late fee — an additional per-day amount that accumulates for as long as the balance stays unpaid.
• Maximum total late fee — a cap on how high the combined one-time and daily fees can climb for a single late payment, so a forgotten balance does not snowball indefinitely.

These fields live alongside Accept payments, Allow partial payments, and the fee-absorption toggles you already use to control who pays processing costs — one screen for all the rules that shape a tenant’s monthly charge.

Late fee amounts are set on each tenant record — giving you room to honor a lease that specifies different terms without changing your organization-wide defaults. Once those amounts are in place, the math is straightforward and consistent:

1. Start from the earliest pending rent charge on the tenant’s ledger.
2. Add your configured grace period to find the date a fee is first allowed.
3. If the balance is still unpaid past that date, apply the one-time fee.
4. Add the daily fee for every day the balance remains outstanding.
5. Cap the total at the maximum late fee amount, if one is set.

The result posts to the tenant’s ledger as a Late Fee charge with a Pending status, ready to be paid the same way as rent — by the tenant online or as a manual entry from your team. A tenant who is not Active or whose account is locked will not accrue new late fees, so the rule only runs against tenants it should apply to.

The numbers matter, but a handful of surrounding choices determine how much friction late fees actually create with tenants:

• Grace period length — a short grace window (2–3 days) protects predictable cash flow; a longer one (5–10 days) reduces disputes from tenants paid on a biweekly schedule that does not line up with your due day.
• Flat fee vs. daily accrual — a one-time fee alone is simple to explain; adding a daily fee on top creates a real incentive to pay sooner rather than let a balance sit.
• A meaningful cap — without a maximum, a daily fee on a long-unpaid balance can grow into a number that looks punitive on a ledger and is difficult to collect in practice.
• Payment failure notification email — set this so your team hears about a declined card or failed ACH debit immediately, before a missed auto-pay quietly turns into a late fee.

None of these are one-size-fits-all. What matters is that whatever you choose is applied the same way to every tenant, every month, which is exactly what automated enforcement gives you.

The two features reinforce each other. Auto-pay reduces the number of tenants who are ever eligible for a late fee in the first place, because a verified card or bank account charges automatically on the day you configured — no one has to remember to log in and pay. Late fees then act as a consistent backstop for the tenants who pay manually or whose auto-pay attempt failed.

Everything — auto-pay enrollment status, pending charges, and any late fee that posts — shows up in the same Tenants → Payments workspace your team already reconciles against. See the full walkthrough on Payments training, and configure the org-wide switches themselves on Configuration training.

Set the rules once, apply them everywhere, and both auto-pay and late fees become background infrastructure — not a monthly chore.