A grace period is the provision in most loan contracts that allows payment to be received for a certain period of time after the actual due date. During this period, no late fees are charged, and the late payment does not result in default or cancellation of the loan.
This period will differ depending on what the payment is for.
When it comes to rental properties, property managers in some states of Australia allow a grace period for late rent payments. This allows tenants some leeway in getting their rent together before they face late fees. Despite this, collection and even eviction process can be put in place before this period ends.
In many circumstances, the property manager may be entitled to demand payment by a deadline date, which could be before the end of the grace period. It is important to read all the contracts and documentation that highlight these time frames and agreements so you understand your rights (whether you’re a tenant or a landlord).« Back to Glossary Index