In New Brunswick, it is strictly illegal for a landlord to charge a tenant a late fee, penalty, or interest for overdue rent. Even if your lease explicitly states there is a $50 late charge, that clause is legally void under the Residential Tenancies Act. You may only pass on exact bank charges for bounced cheques (NSF fees).
When a tenant fails to pay rent on the first of the month, it disrupts your cash flow and creates unnecessary stress. Many landlords in cities like Saint John and Bathurst instinctively want to penalize the tenant by tacking on a late fee, hoping it will encourage timely payments in the future. In many jurisdictions, this is common practice.
However, New Brunswick enforces strict consumer protection laws when it comes to housing. 🔍 The province outright forbids landlords from profiting off a tenant’s inability to pay on time. If you attempt to collect illegal late fees, you risk facing severe pushback from the Residential Tenancies Tribunal (RTT). In this guide, we will explain the legal restrictions surrounding late rent and what actions you can legally take instead.
Step-by-Step Guide to Handling Late Rent in New Brunswick
Since you cannot rely on late fees to deter late payments, you must use the legal eviction framework to protect your income. Training your tenants to pay on time requires swift, consistent administrative action rather than financial penalties.
Step 1: Verify the Payment Date
First, confirm exactly when rent is due according to your lease agreement. 📅 In New Brunswick, if rent is due on the 1st of the month, it is officially considered late the very next day (the 2nd). There is no mandatory statutory “grace period” before you can take legal action, unless explicitly written into your lease.
Step 2: Serve a Notice to Vacate for Non-Payment
Because you cannot charge a late fee, your strongest tool is a formal eviction notice. As soon as the rent is late, you can issue a Notice to Vacate. This document informs the tenant that they have 15 days to move out because they breached the payment terms of the contract (Note: do not use Form 4, which is a Notice to Quit used for other termination reasons).
Step 3: The Tenant’s 7-Day Window to Pay
Once the tenant receives the Notice to Vacate, the law grants them a 7-day window to catch up. 💰 If the tenant pays the full outstanding rent within 7 days of receiving the notice, the eviction is immediately cancelled. They do not owe any extra penalties or late charges-just the exact base rent that was due.
Step 4: Repeated Late Payments
If a tenant repeatedly pays late (forcing you to issue a Notice to Vacate multiple times), you have additional rights. Even if they pay within the 7-day window each time, a documented history of chronic late payments is grounds to apply to the RTT to terminate the tenancy for a consistent breach of lease obligations.
What Fees Can You Legally Charge?
While arbitrary late fees are banned, you are not entirely unprotected against actual financial losses caused by the tenant. 💵 Here is a breakdown of what you can and cannot charge.
| Type of Charge | Legality in New Brunswick | Estimated Amount (CAD) |
|---|---|---|
| Daily/Monthly Late Rent Fee | Illegal | $0.00 |
| Interest on Unpaid Rent | Illegal | $0.00 |
| NSF Fee (Bounced Cheque) | Legal (If in lease) | $25 – $45 (Exact bank cost) |
| Lease Administration Fee | Illegal | $0.00 |
If a tenant’s rent cheque bounces, causing your bank to charge you an NSF (Non-Sufficient Funds) fee, you are legally permitted to pass that exact cost onto the tenant. However, you must only charge what the bank charged you, and this right should be clearly outlined in your standard lease agreement.
How Long Does the Process Take?
Acting on late rent should be immediate. ⏳ You can serve the Notice to Vacate on the 2nd day of the month. The tenant then has exactly 7 days to pay the rent to cancel the notice. If they do not pay, the total timeframe before the eviction date takes effect is 15 days from the date the notice was served. If they still refuse to leave, applying to the RTT for an Eviction Order takes an additional 1 to 3 weeks.
Frequently Asked Questions (FAQ)
What if my lease explicitly says I can charge a $50 late fee?
Under the New Brunswick Residential Tenancies Act, any lease clause that contradicts the law is considered void and unenforceable. You cannot legally enforce the $50 late fee, even if the tenant signed the document agreeing to it.
Can I offer a discount for early rent payment instead?
Generally, offering a prompt-payment discount is an acceptable workaround in Canada, provided the “base rent” is clearly established. For example, setting rent at $1,200 but offering a $50 discount if paid by the 1st. However, you should consult a local real estate lawyer to ensure the wording does not mimic an illegal penalty.
Can I hold back the tenant’s security deposit for late fees?
No. Security deposits (held by Service New Brunswick) can only be claimed for unpaid base rent, physical damage to the property, or unpaid utility bills. You cannot claim deposit funds for illegal late penalties.
Is there a grace period for rent in New Brunswick?
Legally, there is no automatic grace period. Rent is officially late at midnight on the day after it is due. However, many landlords offer an informal 1 to 3-day grace period to maintain good tenant relations before serving an eviction notice.
What should I do if the tenant ignores the Notice to Vacate?
If the 15-day notice period expires and the tenant has neither paid the rent nor moved out, you must immediately file an Application for Assistance with the RTT to obtain an official Eviction Order to force their removal.
Leave a Reply