Montana Rent Late Fee Calculator
Calculate rent late fees and verify compliance with Montana state regulations. Free instant calculator with legal compliance verification.
Montana operates under a "reasonableness standard" for rent late fees, meaning there are no statutory caps on the maximum amount landlords can charge. Instead, Montana law requires that late fees must be reasonable and proportional to the actual damages incurred by the landlord due to late payment.(MCA § 70-24-201)
This approach gives landlords more flexibility than states with strict percentage or flat-fee caps, but also requires careful consideration to avoid charges that could be challenged as excessive or punitive. Late fees must represent a genuine pre-estimate of damages rather than a penalty.
Related Statutes
In Montana, "reasonable" late fees are determined by several factors including the landlord's actual administrative costs, lost investment opportunities, and the property management industry's standard practices.
Montana courts have consistently held that late fees cannot be punitive in nature—they must represent a genuine pre-estimate of damages rather than a penalty. The reasonableness determination considers both the percentage of rent and the actual dollar amount charged.
Factors Montana Courts Consider When Evaluating Reasonableness:
- Administrative costs of processing late payments (staff time, accounting, notices)
- Lost interest or investment income from delayed rent receipt
- Industry standards in the local rental market (typically 3-10% of monthly rent)
- Size and complexity of the property (multi-unit vs. single-family)
- Whether the late fee is fixed or percentage-based
- Comparison with other financial sectors' late payment penalties
- Total dollar amount of the fee relative to monthly rent
Missoula
While Missoula does not impose stricter late fee caps than state law, the city's Tenant-Landlord Handbook recommends landlords provide at least a 3-day grace period and limit late fees to 5% of monthly rent to maintain good tenant relations and avoid disputes.
Learn moreBillings
Billings follows state law without additional local regulations. However, the Yellowstone County Justice Court frequently sees late fee disputes and tends to favor fees of 5-7% when reasonableness is contested.
Bozeman
Given Bozeman's tight rental market and high rents (median $1,600+), landlords should be especially cautious about high dollar-amount late fees. A 10% late fee on a $2,000 apartment ($200) may be challenged even if the percentage seems reasonable.
Senate Bill 323 - Residential Rental Protections
While SB 323 did not create statutory late fee caps, it strengthened tenant rights regarding lease disclosures. Landlords must now clearly state late fee amounts and calculation methods in the written lease agreement, with fees specified in dollars or as a percentage of rent. Vague language like 'reasonable late fees may apply' is no longer acceptable.
Montana Supreme Court - Johnson v. Mountain Properties LLC
Clarified that late fees cannot exceed the landlord's reasonable estimate of actual damages. The court rejected a $150 flat fee (12.5% of $1,200 rent), stating that landlords must provide evidence of administrative costs if challenged.
Johnson v. Mountain Properties LLC
Montana Supreme Court ruled that a $150 late fee on $1,200 monthly rent was excessive. The court held that late fees must be based on a reasonable pre-estimate of actual damages, not arbitrary amounts. Landlord failed to provide evidence of $150 in administrative costs.
Doe v. Billings Rental Management
Yellowstone County District Court upheld a 5% late fee ($75 on $1,500 rent) as reasonable when landlord demonstrated costs including staff time ($20), bank fees ($5), and lost investment opportunity ($50).
Idaho
No statutory cap, similar reasonableness standard to Montana
Wyoming
No statutory cap, reasonableness standard applies
North Dakota
$25 flat fee or 5% of rent, whichever is greater
South Dakota
No statutory cap, must be 'reasonable'
For Landlords:
- •Limit late fees to 5-10% of monthly rent to ensure reasonableness
- •Provide a 3-5 day grace period even though not required by law (builds goodwill and reduces disputes)
- •Document your administrative costs (staff time, processing, notices) to justify fee amounts if challenged
- •Specify exact late fee amounts or calculation methods in the written lease
- •Apply late fees consistently across all tenants to avoid discrimination claims
- •Consider market conditions: high-rent properties should use percentage-based fees to avoid excessive dollar amounts
- •Keep records of when late fees are charged and payment history
For Tenants:
- •Review your lease agreement for late fee terms before signing
- •Challenge fees exceeding 10% of monthly rent as potentially unreasonable
- •Request written explanation of how late fees are calculated and what costs they cover
- •Keep records of all rent payments and communication about late fees
- •If disputing a late fee, file a complaint with Montana Legal Services Association or seek mediation
- •Request one-time fee waiver for first late payment if you have good payment history
- •Know your rights: fees must be in the written lease to be enforceable
Montana Residential Landlord and Tenant Act (MCA Title 70, Chapter 24)
Complete text of Montana's landlord-tenant laws
Montana Legal Services Association
Free legal aid for low-income tenants, including assistance with late fee disputes
Montana Department of Commerce - Housing Division
Official state guidance on residential rental laws and best practices
Frequently Asked Questions - Montana
No statutory limit. Reasonableness standard applies. Must be in written lease agreement.
View Official State Law →Updated October 2025