The typical late fee for rent is between 5% – 10% of the monthly rent price. This can vary based on each area, property, and situation.
Should Landlords Charge a Late Fee?
There is no requirement for landlords to charge a late fee. However, a late fee can be beneficial to ensure tenants pay on time. If you opt not to charge a late fee, tenants can take advantage and continuously make late payments.
Collecting a late fee can also help you during an eviction case. If a tenant “always” pays late and can show proof, a judge may rule that there isn’t a strict payment schedule and offer the tenant additional time to pay.
If a landlord determines that charging a late fee is in their best interest, be sure it is clearly stated in the lease agreement and that it abides by all state and local laws.
When Can Landlords Charge a Late Fee?
Rent is due on the date listed in the lease agreement. However, the date landlords can legally charge a late fee varies. The following states require a grace period before a late fee can be charged:
| State | Required Grace Period for Late Fees |
|---|---|
| Arizona | 5 days (mobile homes) None (other housing types) |
| Colorado | 7 days |
| Connecticut | 4 days (week-to-week lease agreements) 9 days (all other lease agreements) |
| Delaware | 5 days (or 8 days, where rent can’t be paid in person within the same county as the residence) |
| Maine | 15 days |
| Massachusetts | 30 days |
| Nevada | None (week-to-week lease agreements) 3 days (all other lease agreements) |
| New Jersey | 5 business days (certain senior tenants) None (other tenants) |
| New York | 5 days |
| North Carolina | 5 days |
| Oregon | 4 days |
| Tennessee | 5 days (if 6th day is a Sunday or holiday, due date is the next business day) |
| Texas | 2 days |
| Virginia | None (with written lease agreement) 5 days (if there is no written lease agreement) |
| Washington | 5 days |
| Washington D.C. | 5 days |
Some landlords also take day of the week into consideration when deciding how to count late payments.
A landlord doesn’t offer a grace period and rent is due on the first. The first of the month lands on a Sunday. The landlord may wait to charge a late fee until the end of the day on Monday as online payments or mailed payments may take longer to process as Sunday is not considered a business day.
How to Determine What to Charge for a Rental Late Fee
Here are a few things to consider when determining how much to charge for a late fee:
Check State and Local Law
Some states limit the amount landlords can charge if tenants are late on their rent payments:
| State | Maximum Late Rent Fee |
|---|---|
| Alabama | No maximum, must be reasonable |
| Alaska | No maximum, must be reasonable |
| Arizona | $5/day (mobile homes) None (other housing types) |
| Arkansas | No maximum, must be reasonable |
| California | No maximum, must be reasonable |
| Colorado | $50 or 5% of the rent due (whichever is greater) |
| Connecticut | $5/day up to a maximum $50, OR 5% of the rental payment |
| Delaware | 5% of the monthly rent |
| Florida | $20, OR 20% of the rental payment, which ever is greater (can also add reasonable fee for costs related to collections) |
| Georgia | No maximum, must be reasonable |
| Hawaii | 8% of the rent due |
| Idaho | No maximum, must be reasonable |
| Illinois | No maximum, must be reasonable |
| Indiana | No maximum, must be reasonable |
| Iowa | $12/day up to $60 (rent below $700) $20/day up to $100 (rent over $700) |
| Kansas | No maximum, must be reasonable |
| Kentucky | No maximum, must be reasonable |
| Louisiana | No maximum, must be reasonable |
| Maine | 4% of the monthly rent |
| Maryland | 5% of the rent due (monthly rent payments) $3/week up to $12 (weekly rent payments) |
| Massachusetts | No maximum, must be reasonable |
| Michigan | No maximum, must be reasonable |
| Minnesota | 8% of the rent due |
| Mississippi | No maximum, must be reasonable |
| Missouri | No maximum, must be reasonable |
| Montana | No maximum, must be reasonable |
| Nebraska | No maximum, must be reasonable |
| Nevada | 5% of the monthly rent |
| New Hampshire | No maximum, must be reasonable |
| New Jersey | No maximum, must be reasonable |
| New Mexico | 10% of the monthly rent |
| New York | $50 or 5% of the monthly rent (whichever is greater) |
| North Carolina | $15 or 5% of a monthly payment $4 or 5% of a weekly payment (whichever is greater) |
| North Dakota | No maximum, must be reasonable |
| Ohio | No maximum, must be reasonable |
| Oklahoma | No maximum, must be reasonable |
| Oregon | Flat fee: must be reasonable Per-day fee: 6% of the flat fee 5-day period late fee: 5% of the monthly rent |
| Pennsylvania | No maximum, must be reasonable |
| Rhode Island | No maximum, must be reasonable |
| South Carolina | No maximum, must be reasonable |
| South Dakota | No maximum, must be reasonable |
| Tennessee | 10% of the rent due |
| Texas | 10% of monthly rent (buildings < 5 units) 12% of monthly rent (buildings with 5+ units) (or actual cost to landlord if it is higher) |
| Utah | $75 or 10% of the monthly rent |
| Vermont | Reasonable projected costs |
| Virginia | 10% of the monthly rent or 10% of the rent due (whichever is less) |
| Washington | No maximum, must be reasonable |
| Washington D.C. | 5% of the rent due |
| West Virginia | No maximum, must be reasonable |
| Wisconsin | No maximum, must be reasonable |
| Wyoming | No maximum, must be reasonable |
Local laws may also have their own stipulations. For example, California state law does not regulate late rent fees, but the West Hollywood Municipal Code limits the fee to 1% of the monthly rent.
Consider the Market
The local rental market may play a role in whether you charge a late fee and if so, how much.
For example, in a competitive rental market, an applicant may be more willing to sign a lease with higher late fees.
However, if the rental market is relaxed in your area, higher late fees can be a reason an applicant chooses another property.
It is important to point out and remember that late fees are only charged if the rent payment is late. A high-quality tenant isn’t likely to be overly concerned about late fees unless they have a history of late payments.
Examine Tenant Behavior
If a tenant who consistently pays rent on time and in full suddenly misses a payment, it is important to talk with them directly. They could have simply forgotten or had a legitimate reason they didn’t pay. Automatically charging a late fee to a tenant isn’t always the best way to handle a situation.
On the other hand, if a tenant has paid late the last two months, charging a late fee may incentivize them to be more diligent with making their payment on time.
If several tenants are having issues paying rent on time, it may be time to look at your payment options. Requiring a check or only accepting one type of payment may be doing you a disservice. It’s a good idea to check out other ways to collect rent.
Select a Preferred Fee Method
Landlords use a few different methods to determine how much to charge.
Percentage Based Fees
The typical late charge for percentage-based fees is 5% – 10% of the monthly rent price. Be sure to check with your state and local laws before determining your percentage. It’s also a good idea to determine what is reasonable in your area.
If the rent price for your property is $1,200 a month and you charge an 8% late fee after a 3-day grace period, that comes out to $96. However, if rent is $2,500 changing an 8% fee would be $200, which may be a little steep.
Flat Fees
Some landlords opt to charge a flat fee for late rent. As soon as the rent is deemed late (or after the grace period) landlords can charge a specific amount such as $20 – $50, or as based on their legal restrictions.
While this method can be effective, it doesn’t entice a tenant to pay on the first day rent is late versus the 4th day if they will incur the same fee regardless.
Daily Fees
A daily fee charges tenants for each day the rent is late up to a certain maximum.
If a landlord charges a $10 late fee per day, a tenant who is 3 days late would pay $30 while a tenant who is 5 days late would pay $50.
This method incentivizes tenants to pay more quickly. $10 isn’t a huge penalty, but $50 might be.
How to Avoid Late Rent Payments
Landlords can help tenants avoid a late fee by establishing a consistent and clear policy for rental payments. There are also a few tools you can use to help keep tenants on track including:
- Send rent-due reminders – Many online payment portals offer automatic reminders or you can have an administrative assistant send texts a few days before the due date each month.
- Use automatic payment options – Offer tenants a rental payment service that charges rent automatically, ensuring you get paid on time.
- Offer a variety of payment options – Tenants may also be waiting for their paychecks to clear. Offering a variety of payment options, such as a credit card, can help ensure the rent gets paid on time.
- Charge consistent late fees – If tenants believe you have a relaxed payment policy, they may not feel any sense of urgency to pay on time. Charging late fees consistently sets a precedent that rent needs to be paid on time.
Sources
- 1 Ariz. Rev. Stat. § 33-1414
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A landlord [of a mobile home] may charge a penalty fee of not to exceed five dollars per day from the due date of the rent for late payment of rent if the payment is not remitted by the sixth day from the due date.
Source Link - 2 Colo. Rev. Stat. § 38-12-105(1)(a)
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A landlord shall not take any of the following actions or direct any agent to take any of the following actions on the landlord’s behalf:
(a) Charge a tenant or home owner a late fee unless a rent payment is late by at least seven calendar days.
Source Link - 3 Conn. Gen. Stat. § 47a-15a(a)
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If rent is unpaid when due and the tenant fails to pay rent within nine days thereafter or, in the case of a one-week tenancy, within four days thereafter, the landlord may terminate the rental agreement in accordance with the provisions of sections 47a-23 to 47a-23b, inclusive. For purposes of this section, “grace period” means the nine-day or four-day time periods identified in this subsection, as applicable.
Source Link - 4 Del. Code tit. 25 § 5501(a)
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Where the rental agreement provides for a late charge payable to the landlord for rent not paid at the agreed time, such late charge shall not exceed 5 percent of the monthly rent. A late charge is considered as additional rent for the purposes of this Code. The late charge shall not be imposed within 5 days of the agreed time for payment of rent. The landlord shall, in the county in which the rental unit is located, maintain an office or other permanent place for receipt of payments, where rent may be timely paid. Failure to maintain such an office, or other permanent place of payment where rent may be timely paid, shall extend the agreed on time for payment of rent by 3 days beyond the due date.
Source Link - 5 Me. Stat. tit. 14 § 6028(1)
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A payment of rent is late if it is not made within 15 days from the time the payment is due.
Source Link - 6 Mass. Gen. Laws ch. 186 § 15B(c)
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No lease or other rental agreement shall impose any interest or penalty for failure to pay rent until thirty days after such rent shall have been due.
Source Link - 7 Nev. Rev. Stat. § 118A.210(4)(a)
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In a tenancy that is longer than week to week, no late fee may be charged or imposed until at least 3 calendar days after the date that rent is due.
Source Link - 8 N.J. Stat. § 2A:42-6.1
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A person to whom rent is due and payable on the first of the month upon a lease or other agreement shall allow a period of five business days grace in which the rent due shall be paid. No delinquency or other late charge shall be made which includes the grace period of five business days. As used in this section, “business day” means any day other than a Saturday, Sunday or State or federal holiday.
Source Link - 9 N.Y. Real Prop. Law § 235-E(d)
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If a lessor, or an agent of a lessor authorized to receive rent, fails to receive payment for rent within five days of the date specified in a lease agreement, such lessor or agent shall send the lessee, by certified mail, a written notice stating the failure to receive such rent payment. The failure of a lessor, or any agent of the lessor authorized to receive rent, to provide a lessee with a written notice of the non-payment of rent may be used as an affirmative defense by such lessee in an eviction proceeding based on the non-payment of rent. Notwithstanding the provisions of this subdivision, a lessor which is a cooperative housing corporation, other than a cooperative housing corporation subject to the provisions of article two, article four, article five or article eleven of the private housing finance law, may provide for a method of sending notice by mail other than by certified mail, as long as such method of sending notice is provided for in the proprietary lease or occupancy agreement, and the lessee is a dwelling unit owner or shareholder of such cooperative housing corporation.
Source Link - 10 N.C. Gen. Stat. § 42-46(a)
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In all residential rental agreements in which a definite time for the payment of the rent is fixed, the parties may agree to a late fee not inconsistent with the provisions of this subsection, to be chargeable only if any rental payment is five calendar days or more late, with the first day being the day after the rent was due. If the rent:
(1) Is due in monthly installments, a landlord may charge a late fee not to exceed fifteen dollars ($15.00) or five percent (5%) of the monthly rent, whichever is greater.
(2) Is due in weekly installments, a landlord may charge a late fee not to exceed four dollars ($4.00) or five percent (5%) of the weekly rent, whichever is greater.
(3) Repealed by Session Laws 2009-279, s. 4, effective October 1, 2009, and applicable to leases entered into on or after that date.
Source Link - 11 ORS § 90.260(1)
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A landlord may impose a late charge or fee, however designated, only if:
(a) The rent payment is not received by the fourth day of the weekly or monthly rental period for which rent is payable; and
(b) There exists a written rental agreement that specifies:
(A) The tenant’s obligation to pay a late charge on delinquent rent payments;
(B) The type and amount of the late charge, as described in subsection (2) of this section; and
(C) The date on which rent payments are due and the date or day on which late charges become due.
Source Link - 12 Tenn. Code § 66-28-201(d)
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There shall be a five-day grace period beginning the day the rent was due to the day a fee for the late payment of rent may be charged. The date the rent was due shall be included in the calculation of the five-day grace period. If the last day of the five-day grace period occurs on a Sunday or legal holiday, as defined in § 15-1-101, the landlord shall not impose any charge or fee for the late payment of rent; provided, that the rent is paid on the next business day. Any charge or fee, however described, which is charged by the landlord for the late payment of rent, shall not exceed ten percent (10%) of the amount of rent past due.
Source Link - 13 Tex. Prop. Code § 92.019(a)
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A landlord may not collect from a tenant a late fee for failing to pay any portion of the tenant’s rent unless:
(1) notice of the fee is included in a written lease;
(2) the fee is reasonable; and
(3) any portion of the tenant’s rent has remained unpaid two full days after the date the rent was originally due.
Source Link - 14 Va. Code § 55.1-1204(C)
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If a landlord does not offer a written rental agreement, the tenancy shall exist by operation of law, consisting of the following terms and conditions:
1. The provision of this chapter shall be applicable to the dwelling unit that is being rented;
2. The duration of the rental agreement shall be for 12 months and shall not be subject to automatic renewal, except in the event of a month-to-month lease as otherwise provided for under subsection D of § 55.1-1253;
3. Rent shall be paid in 12 equal periodic installments in an amount agreed upon by the landlord and the tenant and if no amount is agreed upon, the installments shall be at fair market rent;
4. Rent payments shall be due on the first day of each month during the tenancy and shall be considered late if not paid by the fifth of the month;
5. If the rent is paid by the tenant after the fifth day of any given month, the landlord shall be entitled to charge a late charge as provided in this chapter;
6. The landlord may collect a security deposit in an amount that does not exceed a total amount equal to two months of rent; and
7. The parties may enter into a written rental agreement at any time during the 12-month tenancy created by this subsection.
Source Link - 15 Wash. Rev. Code § 59.18.170(2)
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The landlord may not charge a late fee for rent that is paid within five days following its due date. If rent is more than five days past due, the landlord may charge late fees commencing from the first day after the due date until paid. Nothing in this subsection prohibits a landlord from serving a notice to pay or vacate at any time after the rent becomes due.
Source Link - 16 D.C. Code § 42-3505.31(b)
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A housing provider may only charge a late fee:
(1) If the written lease agreement between the housing provider and the tenant informs the tenant of the maximum amount of the late fee that may be charged pursuant to this section; and
(2) If the tenant has not paid the full amount of rent within 5 days, or any longer grace period that may be provided in the lease, after the day the rent payment is due.
Source Link - 17 Colo. Rev. Stat. § 38-12-105(1)(b)
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A landlord shall not… Charge a tenant or home owner a late fee in an amount that exceeds the greater of:
(I) Fifty dollars; or
(II) Five percent of the amount of the past due rent payment.
Source Link - 18 Conn. Gen. Stat. § 47a-15a(b)
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If a rental agreement contains a valid written agreement to pay a late charge in accordance with subsection (a) of section 47a-4, a landlord may assess a tenant such a late charge on a rent payment made subsequent to the grace period in accordance with this section. Such late charge may not exceed the lesser of (1) five dollars per day, up to a maximum of fifty dollars, or (2) five per cent of the delinquent rent payment or, in the case of a rental agreement paid in whole or in part by a governmental or charitable entity, five per cent of the tenant’s share of the delinquent rent payment. The landlord may not assess more than one late charge upon a delinquent rent payment, regardless of how long the rent remains unpaid.
- 19 Del. Code tit. 25 § 5501
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Where the rental agreement provides for a late charge payable to the landlord for rent not paid at the agreed time, such late charge shall not exceed 5 percent of the monthly rent. A late charge is considered as additional rent for the purposes of this Code. The late charge shall not be imposed within 5 days of the agreed time for payment of rent. The landlord shall, in the county in which the rental unit is located, maintain an office or other permanent place for receipt of payments, where rent may be timely paid. Failure to maintain such an office, or other permanent place of payment where rent may be timely paid, shall extend the agreed on time for payment of rent by 3 days beyond the due date.
Source Link - 20 Fla. Stat. § 83.808(3)
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A facility or unit owner may charge a tenant a reasonable late fee for each period that he or she does not pay rent due under the rental agreement. The amount of the late fee and the conditions for imposing such fee must be stated in the rental agreement or in an addendum to such agreement. For purposes of this subsection, a late fee of $20, or 20 percent of the monthly rent, whichever is greater, is reasonable and does not constitute a penalty. In addition to late fees, a facility or unit owner may also charge a tenant a reasonable fee for any expenses incurred as a result of rent collection or lien enforcement.
- 21 Haw. Rev. Stat. § 521-21(f)
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Where the rental agreement provides for a late charge payable to the landlord for rent not paid when due, the late charge shall not exceed eight per cent of the amount of rent due.
Source Link - 22 Iowa Code § 562A.9
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For rental agreements in which the rent does not exceed seven hundred dollars per month, a rental agreement shall not provide for a late fee that exceeds twelve dollars per day or a total amount of sixty dollars per month. For rental agreements in which the rent is greater than seven hundred dollars per month, a rental agreement shall not provide for a late fee that exceeds twenty dollars per day or a total amount of one hundred dollars per month.
Source Link - 23 Me. Stat. tit. 14 § 6028(2)
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A landlord may not assess a penalty for the late payment of rent which exceeds 4% of the amount due for one month.
Source Link - 24 Md. Code, Real. Prop. § 8-208(d)(3)
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A landlord may not use a lease or form of lease containing any provision that: … (3) (i) Provides for a penalty for the late payment of rent in excess of 5% of the amount of rent due for the rental period for which the payment was delinquent; or (ii) In the case of leases under which the rent is paid in weekly rental installments, provides for a late penalty of more than $3 per week or a total of no more than $12 per month.
Source Link - 25 Minn. Stat. § 504B.177(a) & (b)
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(a) A landlord of a residential building may not charge a late fee if the rent is paid after the due date, unless the tenant and landlord have agreed in writing that a late fee may be imposed. The agreement must specify when the late fee will be imposed. In no case may the late fee exceed eight percent of the overdue rent payment. Any late fee charged or collected is not considered to be either interest or liquidated damages. For purposes of this paragraph, the “due date” does not include a date, earlier than the date contained in the written or oral lease by which, if the rent is paid, the tenant earns a discount.
(b) Notwithstanding paragraph (a), if a federal statute, regulation, or handbook permitting late fees for a tenancy subsidized under a federal program conflicts with paragraph (a), then the landlord may publish and implement a late payment fee schedule that complies with the federal statute, regulation, or handbook.
Source Link - 26 Nev. Rev. Stat. § 118A.210(4)
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A landlord may charge a reasonable late fee for the late payment of rent as set forth in the rental agreement, but:
(a) In a tenancy that is longer than week to week, no late fee may be charged or imposed until at least 3 calendar days after the date that rent is due;
(b) Such a late fee must not exceed 5 percent of the amount of the periodic rent; and
(c) The maximum amount of the late fee must not be increased based upon a late fee that was previously imposed.
Source Link - 27 N.M. Stat. § 47-8-15(D)
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If the rental agreement provides for the charging of a late fee, and if the resident does not pay rent in accordance with the rental agreement, the owner may charge the resident a late fee in an amount not to exceed ten percent of the total rent payment for each rental period that the resident is in default. To assess a late fee, the owner shall provide notice of the late fee charged no later than the last day of the next rental period immediately following the period in which the default occurred.
Source Link - 28 N.Y. Real Prop. Law § 238-A(2)
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No landlord, lessor, sub-lessor or grantor may demand any payment, fee, or charge for the late payment of rent unless the payment of rent has not been made within five days of the date it was due, and such payment, fee, or charge shall not exceed fifty dollars or five percent of the monthly rent, whichever is less; provided a cooperative housing corporation, other than a cooperative housing corporation subject to the provisions of article two, article four, article five or article eleven of the private housing finance law, shall be permitted to charge a tenant that is a dwelling unit owner or shareholder of such cooperative housing corporation a fee of up to eight percent of the monthly maintenance fee for the late payment of the monthly maintenance fee if the proprietary lease or occupancy agreement provides for such fee.
Source Link - 29 Tex. Prop. Code § 92.019(a-1) & (b)(a-1)
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For purposes of this section, a late fee is considered reasonable if:
(1) the late fee is not more than:
(A) 12 percent of the amount of rent for the rental period under the lease for a dwelling located in a structure that contains not more than four dwelling units; or
(B) 10 percent of the amount of rent for the rental period under the lease for a dwelling located in a structure that contains more than four dwelling units; or
(2) the late fee is more than the applicable amount under Subdivision (1), but not more than uncertain damages to the landlord related to the late payment of rent, including direct or indirect expenses, direct or indirect costs, or overhead associated with the collection of late payment.
(b) A late fee under this section may include an initial fee and a daily fee for each day any portion of the tenant’s rent continues to remain unpaid, and the combined fees are considered a single late fee for purposes of this section.
Source Link - 30 Utah Code § 57-22-4(5)
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An owner may not charge a renter:
(a) a late fee that exceeds the greater of:
(i) 10% of the rent agreed to in the rental agreement; or
(ii) $75; or
(b) a fee, fine, assessment, interest, or other cost:
(i) in an amount greater than the amount agreed to in the rental agreement; or
(ii) that is not included in the rental agreement, unless:
(A) the rental agreement is on a month-to-month basis; and
(B) the owner provides the renter a 15-day notice of the charge.
Source Link - 31 Highgate Associates, Ltd. v. Merryfield, 157 Vt. 313, 316 (Vt. 1991)
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[Three factors should be considered in determining whether a contract provision is a reasonable liquidated damages clause rather than an unlawful penalty:]
(1) because of the nature or subject matter of the agreement, damages arising from a breach would be difficult to calculate accurately;
(2) the sum fixed as liquidated damages must reflect a reasonable estimate of likely damages; and
(3) the provision must be intended solely to compensate the nonbreaching party and not as a penalty for breach or as an incentive to perform.
Source Link - 32 Va. Code § 55.1-1204
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A landlord shall not charge a tenant for late payment of rent unless such charge is provided for in the written rental agreement. No such late charge shall exceed the lesser of 10 percent of the periodic rent or 10 percent of the remaining balance due and owed by the tenant.
Source Link - 33 D.C. Code § 42-3505.31(a)
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Pursuant to subsection (b) of this section, a housing provider may charge a late fee of no more than 5% of the full amount of rent due by a tenant.
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