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A Landlord's Guide to Late Fees

As a landlord or property owner, you may find yourself charging tenants late rent fees at one point or another. But what are late rent fees? If your tenant does not pay rent on time, it is standard to charge them a fee for their late payment. Typically, there will be a grace period stated in the lease, usually between three to five days after the rent due date each month. During this period, tenants have the opportunity to get their rent payment to the landlord or property manager without facing any consequences. After the grace period is up, the tenant will then be charged a fee for their late rent payment. The late fees are usually calculated on a reasonable percentage of the monthly rental rate (5-10%). Make sure this percentage and date days in your lease contract. State and local laws dictate how much of a fee a landlord is allowed to charge for late rent payments.

State and local laws dictate how much of a fee a landlord is allowed to charge for late rent payments. Whether you charge a percentage of the rent for the late fee or a flat fee for each day rent is late, there is usually a maximum amount a landlord can charge per month in late fees. Most courts believe a landlord should only charge a “reasonable” amount for a late fee, which sounds subjective, but is typically less than 10% a month.

Late fee laws also say when the late fee will be implemented. For example, some states allow a landlord to charge a late fee the first-day rent is late, while other state laws require that landlords allow a grace period after the official rent payment due date, and only allow late fees to be implemented after the grace period.

Despite an approved Grace Period, it is important to remember that rent is due on or before the due date. If paid after the due date, but before the end of the grace period, a late fee may not accrue, but the payment is still considered legally delinquent.


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 hand your rent check to the landlord two days late and he tells you he will accept it only if you pay an additional $10, you may refuse unless your lease or rental agreement includes a late fee clause. So as a property manager, you want to make sure you include the following in your lease…

  • How much rent is due

  • What day rent is due (and what happens if the due date falls on a weekend or holiday)

  • Where rent should be paid (mailed, dropped off, paid online)

  • What day rent is considered late (ie is there a grace period)

  • What happens if rent is paid late (how much the late fee is and how the renter will be charged)

  • What happens if rent is unpaid (including details on termination of tenancy)

You should reference any state statutes that apply to your rent payment terms and late fee policies. It is also wise to have an attorney familiar with landlord-tenant laws in your state review your lease agreement before you or your tenants sign it.


The best way to avoid late rent payments is to communicate clearly and effectively with your tenants. To this end, be sure to carefully review the terms of the lease before your tenants sign their names. They should be fully informed about the date on which rent is due, how to calculate late fees on rent, and the grace period. You should also clearly state other consequences which may be faced if rent is paid late consistently, such as the risk of eviction. Furthermore, you should consider sending reminders about rent payments when necessary. A scheduled mass email to all of your tenants wouldn’t be very time-consuming; but may, in fact, have a positive impact on their punctuality. As a tenant, you should always be upfront with your landlord or property management company if you expect to make a late rent payment. By communicating with your landlord he might still charge you a late fee but he may hold off on the eviction process.


To make sure you following late fee rental laws correctly, you need to check your state and local landlord-tenant laws. If you own a rental property that is part of rent control, additional laws will apply to your property and how you structure your late fee policy.

Managing late rent payments can be overwhelming for a lot of landlords. However, a good landlord always knows what to do. By equipping yourself with some precautionary measures and a proactive approach, you’re sure to find a great system for managing late rent payments and late rent fees.

Overland Management can sort this all out and handle it for our property owners. Do You Need Help Management Your Properties? Contact us today!

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