Tip #53

Charge a Hefty, but Legal, Late Fee

Written on June 18, 2015 by

Late Fees By StateI believe that late fees provide the only real motivation for tenants to pay rent on time.

While some landlords mess around with early payment rewards to entice tenants to pay on time, I believe nothing works as well as a hefty (but legal) late fee.

Be Reasonable

My state doesn’t have a statute on late fees, therefore I’m only responsible for ensuring they are “reasonable” – which is completely subjective.

As such, I charge different one-time late fees, depending on the rent amount:

  • 10% if the rent amount is less than a $1,000,
  • 7.5% if the rent is between $1,000-$2500, and
  • 5% if the rent is over $2,500.

Some lawyers will tell you that anything over 5% will get thrown out in court, but I would argue that a $30 late fee on $600 in rent, does not motivate even the poorest of tenants. They will still pay you whenever they feel like it.

Related: Daily Late Fees Provide Motivation to Pay Rent Quickly

You Won’t Get Rich

My goal is not to actually collect late fees – but rather to motivate my tenants to pay on time.

The cost of receiving rent late is far greater than the few hundred dollars you’ll make by trying to collect small late fees.

Whatever amount you choose, make sure that it’s written and agreed to in the lease.

You can’t assign a late fee, no matter how small, if it’s not in the lease.

Late Fees & Grace Periods by State

State regulations vary greatly on this topic, so it’s imperative that you learn and abide by your state laws.

According to my research (though I’m not a lawyer), only 15 states regulate grace periods and/or late fees. Please click on the links to the actual statutes, to ensure accuracy of the data.

StateGrace PeriodLate FeesReference
Arkansas5 Days-A.C.A. § 18-17-701(b)
California-Must be in a written lease and be reasonable.CA Landlord/Tenant Handbook
Connecticut9 Days-CT Gen Stat § 47a-15a (2013)
Iowa-Agreements less than $700/mo, a max $12 per day or $60 per month. For agreements more than $700/mo, a max $20 per day or $100 per month.Iowa Code Ann. 562A.9(4)
Maine15 DaysMaximum 4% of rentMe. Rev. Stat. Ann. tit. 14 §6028
Maryland-Maximum 5% of rentMd. REAL PROPERTY Code Ann. § 8-208 (2014)
Massachusetts30 Days-MGL c.186 § 15B(1)(c))
Nevada-Must be in a written leaseNRS 118A.200
New Jersey5 Days for protected classes (senior citizens)-N.J.S.A. 2A:42-6.1
New Mexico-Maximum 10% of rent and be in a written leaseN.M. Stat. Ann. § 47-8-15(D)
North Carolina5 DaysMaximum $15 or 5%, whichever is greaterNCGS § 42-46(a)(1)
Oregon4 DaysMust be in a written lease and be reasonable, and may be a flat fee, a daily fee of no more than 6% of the flat fee, or no more than 5% of the total rent for each succeeding 5-day period or portion thereof of the rental period, until rent is paid in full.Or. Rev. Stat. § 90.260(1)(2)
Tennessee5 DaysMaximum 10% of the past due amountTenn. Code Ann. § 66-28-201(d)
Texas1 DayMust be in a written lease and be reasonableTex. Prop. Code Ann. §§ 92.019(3)
All Other States--No Statutes
Get our free newsletter

Join 200,000+ landlords

  • ​Tips to increase income
  • Time-saving techniques
  • ​Powerful tools & resources

36 CommentsLeave a Comment

  • Ron

    What do you think about a fixed late fee when the rent is one day late, and then an additional fee for each day the rent payment is late? This assumes that the total late fee stays within the legal limits. Without the adjustable part, a tenant will not be in a hurry to pay rent after they have incurred the fixed late fee.

    • Lucas Hall

      Hi Ron

      That’s exactly what I do – for the exact reason that you mention. Without daily fees, the tenant has no motivation to pay if they are already considered late. Daily late fees ensure that a tenant chooses to pay on the 3rd, rather than the 30th.

      I have a one-time fixed late fee on the first day that rent is officially late (the 2nd of the month). Then, I have a $20 daily late fee every day thereafter.

      I wrote a tip on daily fees: https://www.landlordology.com/daily-late-fees/

      The tricky part is staying within the legal limits (if any) and keeping it reasonable.


      • Ron

        Wow. $20 per day is a strong incentive. Mine is not that high, but the concept is a good one.

        • Lucas Hall

          You’re right, but most of my rents are above $3K/mo. If the rent is less than $1,000, a $5-$10 daily late fee would be more appropriate.

          Plus, if I ever had to go to court over unpaid rent, I would just drop the daily late fees, to show the Judge that I’m not out for blood, but rather, I just want my rent money.

          • Keith a mccollough

            I pay 1250 for rent after the 3rd it’s 120 and 40 per day after that.

          • Jennie

            I been Lord charges me $10 per day that I’m late. That $70 a week. If I’m still having trouble paying, I’ll NEVER be able to get out of late fees & become current! I pay $220 a week, how are daily limits within 5% of the overall monthly rent??

        • Steve Whiteley

          What happened if you on state disability and you get paid on the second wenday of the month. Can they charge you late free

          • Chris

            It depends on the contract you signed and local laws, however if you signed a contract stating you agree to the prescribed late fee schedule, then yes, you should be held accountable for your commitments. The days on which you receive income are unrelated to paying rent on time. If its difficult to hold the money that will be used to pay rent two weeks later, you can always send it in immediately after you receive it mid month and not worry about it.

      • Naomi Brown

        whoa buddy, sounds like you are a renter who habitually pays rent late and resents the fees you have to pay because of it. I routinely waive late fees, even for habitually late renters, so long as they call me and let me know what is going on and then follow through with what we agree upon. We pay the insurance, lawn care, taxes and repair bills on time. Charging late fees is a way we have to enforce getting our rent on time to pay those bills with. I charge $50 if not paid by the 5th, giving my tenants an extra day beyond what the law in my state says. Then $10 a day after that until rent is paid with a cap of $150 per month. My family owns 3 rentals that I manage and rents are between 885-1200. I’ve written it into every lease for the past ten yrs but have yet to collect more than a handful of $50 fees and have never enforced a single day fee. I had one renter who only paid the rent on time once in 3 years and I think he paid me 2 or 3 $50 late fees even with rent routinely being 3 weeks late. I definitely should have tightened up on him and perhaps he would have started paying on time. about the time I decided to crack down on him, he put in his notice because he bought a home…

        • Renter in spokane, Wa

          I have had to pay $50 late fee because I switched jobs due to them not paying paychecks on time…As soon as this company couldn’t pay me on time I left and found a new job because it affected my payment with landlord. With this new job my paycheck isn’t received by the due date of my rent therefore landlord is getting an extra $50 per month on a $650 a month agreement. I stay in communication with the landlord and haven’t discussed the problem with him but he refuses to give me leeway. Is $50 late fee too high for this amount of rent?

        • Brenda

          What if on disability and get check on a certain day?

      • Thad

        You guys are what makes the world the bad poverty place it is.you paid 695 for rent and want to charge somebody $150 for being 15 days late.
        My daughter had her in it emergency C-section her babies in the ICU for the next six weeks and they still charge $10 a day no matter what don’t want to hear the circumstance just money hungry haven’t fixed a damn thing in the house she has been there in 11 months and they have promised to fix it and now that her lease expires next month they called and told her to fix it herself so I called the city and when she moves out they’re going to tag the door repairs have to be done before anybody can move in. She has paid on time for 10 months and her first time being late no exceptions. So is that reasonable

  • Terri

    If you have a month to month agreement that does not include a late fee clause and the tenant is late, would you have to give a 30 day notice for future late fees to go into effect? Would he have to sign it?

  • Joe

    Hi All,

    I now charge a $50 one time late fee. I’ll tell you why below…

    I used to charge a $10 per day late fee, it was enough to collect the rent on time.

    Here’s the problem,
    Renters that do not intend to pay, know it will go to Court, the Judge will dismiss the late fee;
    this was in Michigan, with my high cost Attorney at my side.

    A while back, I had a $25 discount for rents paid on time.
    I never allow a grace period in any case – 1 day is late.
    The problem with that was, $25 was okay for the renter wanting a week or two to be late…

    … Of course I advised about the 7-day notice to evict, so it never went past that,
    except for the professional rent scammers – I screen much closer now.

    So, Why now a $50 late fee?

    I now accept payments on-line. They can pay by check or credit card.
    With credit cards there is a 2.9% convenience fee.
    $1,000 rent @ 2.9% is $29 charged to their credit card.

    That’s cheaper than a $50 late fee, then they can have about 30-days to pay their card

    • Lucas Hall

      Hi Joe,

      Thanks for sharing!

      Another tool I use is automatic rent payments. I mandate in the lease that my tenants setup automatic online rent payments. That way, they can’t ever “forget” to pay the rent.

  • Brandi

    I rent and my landlord wants to charge $20 a day for being late even when I tell him what’s going on and why I’m late. As for the 5 day Grace period do they count the 1st? Logic tells me if due on 1st with a five day Grace then it would start on the 6th with the late fees.

  • Michelle Jiong

    I had late charges of 150 dollars at 50 dollars a month flat fee. I had gotten behind 2 months(payed but not full rent of 635/month. This was after 18 months of no late payments that I had financial challenges. Long story short with paying a month behind with @150 in late fees I was taken to court and with lawyer fees I owed @$5660 dollars. I agreed to pay my regular rent and my late fee on time until paid off. After 2 1/2 years of never being late again as well as paying my fees my landlord kept charging me $50 dollars a month AFTER our court date and agreement. Now my balance is @2300 just for paying on my original balance. I am in Missouri. Is this legal?

  • Foalabama

    I stay in Alabama, i have been in this house since 2009 i have signed one lease since i have been here havnt gotten any reciepts for payment (55O) now 600 LONG STORY SHORT this landlord charges me five dollars a day when im late after the 10th of each month…i had to have surgery which required me to be off so i end up being more late…got my income tax paid him 2600 to play catch up well i thought i caught up mind u this is all hear say from the L.L now he tells me that i am 5,104 in late fees!! And i am 2mths behind in my rent!!!! Tld me i had 175 on the books and he didnt no wat to do wit it..that was 2 go the the late fee &he jus let it sit thr and accumulate i say to that amt 5104.. thr were NO RECIEPTS EXCHANGED…CAN HE DO THIS..

    • James Goodman

      I paid rent a month and 2 weeks behind at 6 weeks paid 900 dollars the 2 more weeks paid rent on time of450 after I thought I was good landlord said I was still 2000 dollars in money or late fees of ×20 after all waspaidbon rent he told me about the late fees and gave me a 3 day eviction is this legal

  • Vince

    I am a tenant in Florida, living in the same place for 2 years now. One of my rent checks was bounced last month, and I was charged $50 for the NSF, $60 for the initial late fee, and $10 thereafter. My landlord did not tell me the check bounced and I had no idea that the late fees were adding up, equaling to over $200 in fees. Do I have any case against these tenants? The agreement states “Daily late charges will not exceed 15 days for any single month’s rent.” After a month and a half, I was finally sent an email saying I had a balance of $800, and they claimed because they are changing management they did not hire a property manager during that time so there was noone to tell me of any late fees.

  • Larry

    I allowed my tenant to choose his own due date, He Chose the 10th stating he got paid on the 5th and could send the payment and it would be here by the 10th, I agreed even though it was allowing him 12 free days of rent to time it perfectly, I have a 3 day Grace period written into the contract, so on the 13th the late fee is 5% which comes to 32.50 , 10 days later on the 23rd 10% @ 65.00

    The tenant has now slipped far behind. nearly 3 months. My question is , to catch up for one month does he pay his rent 625.00 + 32.50 and 65.00 for to days later ( for both late dates) or is he @ just 10% total?

    also, if he has not paid in full and is paying little by little his present rent month is late until caught up right?

  • Yolanda

    Can the landlord charge me twenty dollars a day for late fees. Shouldn’t I have a grace period before being consider late?

  • Rose Eason

    Hello, Sir.

    Isn’t the Landlord supposed to deduct any repairs from my Security Deposit, and not bill me? I had to get a new window blind, and she is charging me extra for this. If the Landlord doesn’t have to take it out if my Security Deposit, then what is it for?

  • James Goodman

    I paid rent a month and 2 weeks behind at 6 weeks paid 900 dollars the 2 more weeks paid rent on time of450 after I thought I was good landlord said I was still 2000 dollars in money or late fees of ×20 after all waspaidbon rent he told me about the late fees and gave me a 3 day eviction is this legal

  • Carrie

    Concerned tenant,
    Since we moved in we have advised the rental company of “issues”. The leaks have cause mold to spread, we haven’t been able to use the dishwasher and it’s been over 120 days. Now my family has 2 separate resperitory problems that have popped up. A plumber came out and said we have a huge problem and need it fixed especially with children in the home. Still nothing.we are withholding rent and they are sending us eviction letters and charging late fees even! Please help what is our legal rights?
    Thank you

  • Brachelle

    I’m on section 8, my rent was late last year and I made arrangements to pay it in 2 installments. Now I’m being told that I owe money for late fees…50 dollars a month since last year, how is that legal?

  • Fabian Rivera

    People like you tsmwo guys are why the world sucks. You forget that not everyone OWNS fukn property ya jerkoffs!!!! So you get your rent a day late. Your mortgage company gives you a 15 day grace period and you take that and profit off of it. Neither of you are paying in squat.. omg! Gas to the bank. Then let a few days go buy. If you get 15 wtf cant you give them more than 3. Ill admit that 20 bucks isnt bad though. My landlords rental management company wamts to charge me 5% of 1250 plus 10 bucks a day and on the 5th day it jumps to 25. This lazy woman wouldn’t even accept the fact that 2 years ago 31 1 2 and 3 of dec to jan fell on thursday friday ssturday and Sunday.

  • Lisa

    What about when you pay a late fee with your rent and then the land lord send you another paper saying you have to pay more late fees after you already paid late fees the landlord saying you have to pay them back for filing fees etc I thought is is supposed to be already included when you get the yellow notice not pay extra late fees

  • Maec

    I charge my tenant $100 late fees, agreement states 4 percent max, it is within the max.
    Can I add additional late fee for everyday delayed beyond the grave period? E.g., $20 perday. His cheques clear towards 20th of the month every time. So, can I charge this additional amount? Or should the total late fees be within 4 percent. If the rent is delayed, the tenant thinks anyways he is paying late fees so delay as much as possible.
    Pls. Advise. Should I add an addendum to changing the late fee fixed plus daily additional? Is it ok if tenant agrees by email instead of going through signing process?

  • Dave

    I pay 860$ in rent and on the 4th day of the month,they start charging late fees,starting with $100,then 10$ per day until paid. When I finally do pay the rent,it must include the late fees as well. I’ve lived at this property for 7 years and was only late once,when I first moved into the apartment. After that,I was always on time until recently,when I missed some days at work due to the death of someone in my family. I was unable to come up with the rent on the 4th and had to wait until the 7th to pay it,so I ended up paying $860 plus $140 in late fees. Not every tenant pays their rent late out of laziness. Some people have just run into some bad luck. Just imagine what landlords would charge if there were no laws to limit late fees.

  • Shnnon

    I live in the state of Indiana I’m unable to work I’ve been fighting disability for over 2 years so my rent gets paid by donations friends and family and trustees so my rent gets paid different times of the month I’m charged $5 a day after the first I’ve been charged up to $150 in one month and late fees and when I make my new rent payments he takes all old fees out of the new rent so as of right now I will my landlord $1,085 that’s 575 for January’s rent and the rest is late fees whatever money I give him he pays the late fees first and then the total is threatening to evict me by the 20th if half of it isn’t paid is this legal


    I work late and pay my rent after 5pm on the first of the month how are they charging me late fees but my receipt say the correct time and date but the email I get says I paid it on the 2nd

  • Johnson and Johnson

    “Some lawyers will tell you that anything over 5% will get thrown out in court, but I would argue that a $30 late fee on $600 in rent, does not motivate even the poorest of tenants. They will still pay you whenever they feel like it.”


    “Does not motivate even the poorest of tenants. They will still pay you whenever they feel like it ”

    Feel like? Motivate? …poorest of tenants?

    The poorest of tenants pay when they can with what they can. There’s no motivation other than not being homeless on the streets.

    And to be clear we’re talking about “even the poorest of tenants.” Not your thousand dollar tenants with their thousands more in assets who could afford ridiculous late fees. Jackass.

  • Cape cod dreamer

    What date is late fee charged if the wording is “if the rent has not been paid by the 10 th of each month”. Ct has 9 day grade period.

Join the Discussion

Your email address will not be published. Required fields are marked *

 characters available. Be short, sweet and to the point.