Late Rent and NSF Fees in PEI

Section 20(2) of the Residential Tenancy Act lists fees a landlord may charge. For a returned tenant cheque, there are two parts: the service fee that the financial institution charged you, and an administration fee of not more than $25. The total is the bank's fee plus up to $25.

The Act says "cheque". It does not mention e-transfer, pre-authorised debit or other payment types in section 20, and the official sources reviewed do not say whether the $25 fee applies to them. They also do not say whether the NSF fee must be written into the lease. If you accept payment by pre-authorised debit or e-transfer, ask the Rental Office before you charge.

The Act also lists fees you may not charge, including a guest fee, a key fee after you changed the locks, a fee for repaying the deposit, and a service prescribed in the regulations. The Residential Tenancy Regulations have ten sections and none sets a fee. Section 20 is part of the terms deemed to be in every tenancy agreement. A lease term that is inconsistent with those terms has no effect, and a tenant cannot waive them.

The Act has no section that creates or sets a late-rent fee. The list of fees you may charge in section 20(2) has no late-payment item, and the list of fees you may not charge in section 20(1) does not name one either. The regulations do not mention it. The official sources reviewed also set no cap, percentage or amount.

So this guide does not say that a late-fee clause in a PEI lease is valid, and it does not say that it is invalid. That question is open on the sources reviewed. If you are considering a clause, or have one in your lease, ask the Rental Office how it treats a late-fee clause before you charge it. Whatever you decide, the NSF fee above is separate, and the notice rules below do not depend on a late fee.

For help with the written terms of a lease, see our PEI forms and required wording guide.

A tenant must pay rent when it is due under the tenancy agreement, whether or not you have complied with the Act, unless the Act expressly lets the tenant withhold. The Rental Office FAQ says there is no grace period for late rent. You may serve the notice the day after rent was due.

1. Serve Form 4(A), reason (a). The notice for non-payment must be in the approved form. It takes effect not earlier than 20 days after the tenant receives it.
2. Tenant's 10 days. The tenant has 10 days to pay all rent due, in which case the notice has no effect, or to dispute it with an application to the Director.
3. If the tenant does neither. The tenant is deemed to accept the end date and must vacate.
4. To recover money. You can apply to the Director for an order directing the tenant to pay outstanding rent (Form 2(B), option (a)).

Utility charges the lease requires the tenant to pay you can be treated as unpaid rent if they remain unpaid more than one month after a written demand. See our PEI landlord guide on unpaid rent and what to do if a tenant does not pay rent. The forms are on the Rental Office forms page.

Repeated late payment is its own ground for a notice for cause. The two routes compare as follows.

Item	Non-payment (Form 4(A), reason (a))	Repeatedly late (Form 4(A), reason (c))
Earliest end date	20 days after the tenant receives it	One month after receipt, and the day before rent is payable
Tenant's response	10 days to pay or apply to the Director	10 days to apply to the Director to dispute

The Act does not define "repeatedly" and sets no number of late payments. Neither do the regulations or the forms. If you are counting late payments, keep dated records of each one, and ask the Rental Office whether your pattern fits. See also our PEI notice to end tenancy guide.

The Director of Residential Tenancy, through the Rental Office, decides first. IRAC hears appeals only. A tenant who wants to appeal an order to vacate for non-payment or cause must serve a notice of appeal on the Commission within seven days after the order is given, and serving it stays the order. See the IRAC rental page. Do not move to enforce an order until the appeal period has run.

The same Act gives the tenant tools too, such as the tenant-side PEI ending tenancy notice guide. Read it so you know what the tenant will be told.

This guide explains the rules in general terms; for a specific case, ask the tribunal or a licensed legal professional.