Late Rent Fees

Sometimes late fees are legit—but other times, such as when they're excessive or you haven't been notified about them, a court might not uphold them.

Updated by , Attorney · UC Berkeley School of Law

Landlords often impose a late fee when rent is even a few days late. But the size of the late fee is subject to legal limits, and in some situations it's not legal to impose one at all.

Are Late Rent Fees Legal?

If your lease or rental agreement says nothing about late fees, your landlord may not impose one, no matter how reasonable it is. For example, if you send in your rent check two days late and the landlord tells you they'll accept it only if you pay an additional $10, you may refuse unless your lease or rental agreement includes a late fee clause.

Keep in mind, however, that being too hasty to assert your rights over a relatively modest sum of money might not be worth the bad feelings that could come back to haunt you in the future.

Limits on Late Rent Fees

Laws in a few states restrict how much landlords can charge for late fees, along with whether landlords have to wait a certain period of time before imposing them. And if you live in an area with rent control, you'll need to check those laws as well.

Most states, however, don't put dollar limits on late fees. This doesn't mean that landlords can charge whatever they want, though. Under general legal prin­ciples, your landlord may not charge an unreasonably high late rent fee.

Here are some guidelines for judging what's unreasonable:

  • The fee shouldn't begin immediately. Normally, a late fee should not apply until at least three days after the rent due date. If your state law requires landlords to give you a grace period for paying rent (or if the lease gives you one), it's likely that the late fee can't be assessed, either, until the grace period has passed.
  • The fee shouldn't exceed a certain percentage of your rent. Late fees that exceed 5% of the rent are likely unreasonable. That's $50 on a $1,000 per month rental. A few states set lower limits. Even in the majority of states with no statutory limits, a higher late charge, such as 10%, might not be upheld in court, unless the rent was extremely late—at least 10 days.
  • The fee shouldn't increase without limit. Late charges that increase quickly and without limits are likely to be considered unreasonable. Courts are more likely to uphold late fees that increase each day the rent is late only when the increase is moderate and the total charge has an upper limit.

For example, $5 per day for the first four days the rent is late, and $10 each subsequent day up to a $50 limit on a rent of $1,000 would amount to a maximum fee of 5% and would probably be accepted by a court.

What to Do About Excessive or Questionable Late Rent Fees

Obviously, the surest way to avoid a late fee is to pay your rent on time. But if you can't do this, don't automatically assume that there's nothing you can do about the penalty.

When There's No Provision on Late Fees

Your landlord may not impose a late fee unless the lease or rental agree­ment has a late fee clause (or, if you have an oral agreement, you must have been told there would be a late fee). However, this rule of law won't stop some landlords.

If you refuse to pay the fee, be prepared to be asked to move at the first legal opportunity—with proper notice if you rent with a rental agreement, or by the landlord refusing to renew your lease when it expires. Remember, in most states a landlord can terminate a month-to-month tenant, or decide not to renew a lease, without having to give a reason.

To avoid the risk of eviction, it might make more sense to pay the fee and challenge it in small claims court, where the worst-case scenario is losing your time, the court filing fee, and an offer of renewal when the lease is up.

When You've Agreed to an Outrageously High Fee

If you've signed a lease or rental agreement that contains an outlandish late fee policy, you can still refuse to pay it and challenge it in court when the landlord seeks to evict you for breaking a lease provision. Why? Most courts consider the imposition of enormous late fees, like outrageous high-interest loans, to raise an important public policy issue. They will listen to your defense (though not necessarily rule in your favor) in spite of the landlord's claim that you "waived" the right to protest when you signed the lease or agreement.

It's usually better, however, to not risk the threat of an eviction lawsuit (which always includes the possibility that you'll lose). Instead, pay the fee if possible and file your own lawsuit in small claims court, asking that the judge order the landlord to return it. That way, the only thing at stake is your time and the small filing fee, not your home. But it goes without saying that once you've sued your landlord you can expect a termination notice at the first legal opportunity, and would do well to begin checking Craigslist for a new rental.

Avoiding Late Fees

If you can't pay your rent on time, don't automatically assume that you'll have to pay the late fee—try negotiating with your landlord.

Handle the late fee in the same way you handle the late rent payment itself: if you know that you won't be able to make the rend due date, notify your landlord in advance, explain the situation, suggest a payment schedule, and get it in writing. As part of your negotiations, ask for a waiver or reduction of any late penalty—many landlords will appreciate your advance notice and forgive the rent fee at least once.

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