California law provides that the owner can serve a Three Day Notice to Pay Rent or Quit after the tenant defaults in the payment of rent. We think it is best to leave any late charge off of the Three Day Notice. Our reasoning is simple. We emphasize that the word “rent” because the law does not specifically state that other charges – such as late charges, interest, NSF charges, utility payments and damages – are rent. Since state law requires the Court to strictly apply the unlawful detainer law (i.e. if you make a small mistake on the Notice, you lose), it does not make sense to jeopardize your case by including a late charge on your Notice.
Occasionally, in residential rental agreements, the owner will give a discount if the rent is paid by the first. Let’s say the monthly rent is $1,000.00 a month, but the tenant is entitled to a $50.00 discount if he/she pays on or before the first, for a net of $950.00 per month. If rent is not paid by the first, the owner naturally serves a Three Day Notice to Pay Rent or Quit for the $1,000.00. The Court, however, may construe this as a “reverse” or hidden late charge, concluding that the net pay is really $950.00 a month and not $1,000.00. The Court would say this difference is a disguised late charge if not paid by the first. If you do discounts, it is better to serve a Three Day Notice to Pay Rent or Quit for the lower figure.