Landlord Late Fee Calculator: Verify Legal Compliance (2025)

Common Questions

What is the maximum late fee I can legally charge?

Maximum late fees vary by state. Texas allows 12% for 1-4 unit properties (Tex. Prop. Code §92.019), Colorado caps fees at $50 or 5% whichever is less (C.R.S. §38-12-105), and Maryland limits fees to 5% (HB 853, effective Oct 2024). States without statutory caps require fees to be 'reasonable'—typically 5-10% of rent. Use our calculator to find your state's specific limit.

Do I need to provide a grace period before charging late fees?

Many states mandate grace periods: Massachusetts (30 days), Maine (15 days), Colorado (7 days), and Texas, New York, Virginia, Tennessee, North Carolina (5 days). Approximately 30 states don't require grace periods by law. Even if not legally required, offering 3-5 days is considered best practice to avoid disputes. Our calculator shows your state's requirements.

Can I charge daily late fees that accumulate?

Some states allow cumulative daily fees (Texas explicitly permits initial fee plus daily charges under Tex. Prop. Code §92.019). However, total accumulated fees must remain reasonable. Courts have struck down excessive cumulative fees. Best practice: If using daily fees, cap the total at your state's maximum percentage. For example, $5/day with a $75 cap on $1,500 rent (5%).

What must be included in my lease regarding late fees?

Your lease should clearly state: (1) The exact late fee amount or percentage, (2) When the fee is triggered (days after due date), (3) Any grace period provided, (4) How fees are applied to the account, (5) Maximum total fees if using daily charges. Vague terms like 'reasonable fee' can lead to disputes. Specificity protects both landlord and tenant.

Can I charge late fees to Section 8 tenants?

Yes, but only on the tenant's portion of rent, not the housing subsidy. Fees must comply with HUD regulations AND state law. If the late payment was caused by delayed subsidy processing (not the tenant's fault), you typically cannot charge late fees. Review your Housing Assistance Payments (HAP) contract for specific requirements.

What happens if I charge more than the legal maximum?

Charging excessive fees exposes you to legal liability. Tenants can: (1) Refuse to pay the excess, (2) Deduct excess fees from rent (in some states), (3) File complaints with the state Attorney General, (4) Sue in small claims court for refunds, and (5) In some jurisdictions, collect statutory damages. Example: Chicago's RLTO allows tenants to recover damages plus attorney fees for violations.

Can I evict a tenant for unpaid late fees?

In most states, eviction proceedings are for unpaid rent, not late fees. However, you can: (1) Include late fees in a pay-or-quit notice (check state law), (2) Deduct from security deposit at move-out, (3) Sue in small claims court for the fees separately, (4) Send to collections, (5) Decline to renew the lease. Evicting solely for late fees is typically not permitted.

How do I handle military tenants under the SCRA?

The Servicemembers Civil Relief Act (50 U.S.C. §3901) limits late fees on obligations incurred before active duty to 6% annually. For active-duty military tenants: (1) Verify service status via SCRA website, (2) Apply the lower rate if applicable, (3) Document compliance, (4) Be aware of additional state military protections. Violations can result in federal penalties.

Should I charge the maximum allowed or a lower amount?

Consider charging less than the maximum for several reasons: (1) Lower fees reduce disputes, (2) Many landlords use 5% even in states allowing 10%, (3) Reasonable fees are easier to collect, (4) Courts may scrutinize maximum fees more closely. A $50 flat fee or 5% is widely accepted industry standard and rarely challenged.

What records should I keep regarding late fees?

Maintain records for at least 3-7 years (varies by state): (1) Copy of signed lease with late fee clause, (2) Rent payment ledger with dates received, (3) Late fee invoices sent to tenants, (4) Any correspondence about fees, (5) Payment receipts for all transactions. Good documentation protects you if disputes arise.