Maximum Late Fees by State: A Landlord’s Guide

Even the most reliable tenants may be late on rent from time to time. If a tenant hasn’t paid their rent by the due date specified in their lease, property owners are allowed to charge a late fee. The purpose of a late fee is to offset the inconvenience of receiving a late payment and to discourage this behavior in the future. 

Although rental owners are within their right to charge late rental fees, they can't charge fees indiscriminately, and the fees they do charge cannot be unreasonably high. Most states cap late rental fees at 5% of the monthly rent. 

In this article, we’ll discuss everything you need to know about late rental payment fees, including why and when to charge them, as well as how to calculate and enforce them. We’ll also provide an overview of how late rent payment fees are regulated by all 50 states.

Why should landlords charge a late fee?

As a property owner, you must ensure your tenants pay their rent in full and on time. Rent payments that are consistently late can negatively impact your cash flow, forcing you to use your funds to maintain mortgage payments. 

The longer a tenant remains late on payment, the harder it usually is for them to become current. This could compromise the profitability of your investment property. Charging a late fee allows you to protect your investment and have peace of mind.

When can property owners charge late fees?

In addition to regulating how much property owners can charge in late fees, states also regulate when late fees can be applied. Some states have a designated grace period of 1-30 days, while others have no grace period at all. 

A grace period is the time immediately after rent is due during which a tenant cannot be charged a late fee.  Property owners need to hold off on charging a late fee until the grace period is over. If your state doesn’t specify a grace period, you can technically charge a late fee the day after rent is due. 

However, it’s worth considering whether this will improve or hurt your landlord-tenant relationships.

Even if your rental property is located in a state where there is no grace period, it’s smart to include one in the lease or rental agreement, anyway. This promotes transparency between you and your tenant and provides clear expectations regarding when and how rental fees will be charged. 

What are the maximum late fees by state?

As mentioned above, rent regulations and trends differ from state to state. Here is an overview of state laws regulating maximum late fees and required grace periods:

Alabama

There is no maximum late fee in Alabama. Property owners in this state do not need to observe a grace period after rent is due before applying late fees, unless otherwise stated in the rental agreement. 

Alaska

There is no maximum late fee in Alaska. Alaska property owners also do not need to provide a grace period before charging late fees, however it is common practice to provide 5-7 days. 

Arizona

There is no maximum late fee in Arizona. Arizona property owners also do not need to observe a grace period before charging late fees.  However, landlord must give tenants at least 5 days to pay rent BEFORE filing an eviction notice of non-payment.  

For those renting manufactured or mobile homes in Arizona, a five-day grace period is required before charging a fee, as per Arizona Revised Statutes §33-1414(A4). Late fees must also be reasonable and disclosed in the lease agreement.

Arkansas

Arkansas does not have a statewide law specifying grace periods or maximum late fees for rental payments. Landlords can charge late fees as soon as rent is late, as long as the fees and terms are clearly stated in the lease agreement.

California

Late fees must be ‘reasonable’ but there is no defined limit and they must be specified in the lease agreement.  There is also no state-mandated grace period before late fees can be charaged, but if a grace period is listed in the lease, the landlord must abide by it. 

Colorado

Section 38-12-105 prohibits landlords from charging late fees unless rent is over seven days late and caps fees at $50 or 5% of the overdue rent. Late fees must be disclosed in the rental agreement, and landlords cannot evict tenants or terminate leases for unpaid late fees. 

Violations incur a $50 penalty per occurrence, with a seven-day period to rectify. Tenants can seek damages and use violations as a defense in eviction cases. Late fees are distinct from rent and cannot be classified as such.

Connecticut

In connecticut, late fees cannot be charged during a grace period of 4 days for weekly rent or 9 days for monthly rent, must be reasonable and specified in the lease, and rent payments postmarked before the end of the grace period are exempt from late fees even if received afterward.

Delaware

Late fees, capped at 5% of monthly rent, cannot be imposed within five days of the due date, and If the landlord does not maintain a permanent place for rent payments within the property's county, the grace period extends by an additional three days.

Washington D.C.

In Washington DC, DC Code § 42–3505.31 mandates a minimum 5-day grace period after the rent due date before a late fee can be charged. Late fees are limited to 5% of the rent and must be communicated in writing within 30 days. 

Lease agreements must detail the late fee or how it's calculated. A late fee can only be charged once per late payment, and tenant payments must first cover rent before late fees. 

Florida

Florida law does not mandate a specific grace period for rent payments. There is no statutory requirement for landlords to provide a grace period before charging late fees. For residential rentals, there is no specific statutory limit on late fees, but they must be reasonable and specified in the lease agreement.

Georgia

Georgia property owners are not limited in terms of how much of a late fee they can charge. Late fees can be charged immediately after rent is overdue, as there is no grace period required in Georgia.

Hawaii

In Hawaii, the maximum late fee a tenant can be charged is 8% of the monthly rent. Hawaiian property owners do not need to observe a grace period.

Idaho

Idaho law does not specify a maximum late fee amount or prohibit late fees. However, any late fee policy should be clearly stated in the lease agreement. There is no statutorily required grace period in Idaho before a landlord can charge late fees.

Illinois

There is no maximum late fee or mandated grace periods in Illinois. 

Indiana

There are no statutory limited on late fees in Indiana– landlords can charge fees, but they should be reasonable and specified in the lease agreement.  It's important to note that while Indiana law doesn't specify limits on late fees or grace periods, any fees should be reasonable. Courts may scrutinize excessive late fees. 

Iowa

Iowa has a unique method for determining late fee:

• If the monthly rent is less than $700: $12 per day, with a maximum of $60 per month.
• If monthly rent is more than $700: $20 per day, with a maximum of $100 per month.

Iowa property owners do not need to observe a grace period before applying late fees.

Kansas

There is no specific statute that sets limits on late fees or mandates grace periods. This means that these terms are generally left to be agreed upon in the rental agreement between the landlord and tenant.

Kentucky

There is no maximum late fee in the state of Kentucky. Property owners in Kentucky do not need to observe a grace period before applying late fees.

Louisiana

There is no maximum late fee in Louisiana. Property owners in Louisiana do not need to observe a grace period before charging rental fees.

Maine

As per the Maine Revised Statutes Title 14, §6028: The maximum amount of late fees a property owner in Maine can charge is 4% of the monthly rent due. Maine property owners must observe a grace period of 15 days before applying, and all late fees must be communicated via written notice.

Maryland

The maximum late fee that can be charged in Maryland is 5% of the total monthly rent due. Maryland property owners do not need to allow a grace period.

HOUSE BILL 853, introduced by Maryland Delegates, proposes limiting late rent fees to a maximum of 5% of the UNPAID rent, rather than the total amount due. For weekly rental payments, late fees are capped at $3 per week, with a monthly limit of $12. 

This bill ensures fair and proportional penalties for late payments, and any lease provision violating these limits is unenforceable, allowing tenants to recover damages and attorney’s fees. The Act takes effect on October 1, 2024.

Massachusetts

According to mas.gov ( an official website of the commonwealth of Massachusetts) ‘A landlord cannot charge interest or a penalty on late rent until 30 days after the due date. However, the landlord can begin the eviction process immediately, even if the rent is only one day overdue. 

The landlord also cannot use a reverse penalty clause to encourage you to pay early. For example, it is illegal for a landlord to reduce the rent by 10% if the rent is paid within the first five days of the month.’

This is the longest grace period required in all 50 states.

Michigan

There is no maximum late fee in Michigan. Property owners in Michigan do not need to observe a grace period before charging tenants late rental fees. 

Minnesota

According to Minnesota Statutes § 504B.177 : (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.

Minnesota property owners are not required to observe a grace period.

Mississippi

There is no maximum late fee in Mississippi. Property owners in Mississippi do not need to provide tenants with a grace period before charging late fees.

Missouri

There is no maximum late fee in Missouri. Property owners in Missouri do not need to provide tenants with a grace period before charging late fees.

Montana

There is no specific statute in Montana that governs late fees or grace periods for residential rentals. The code does not mandate a grace period or set limits on late fees. Any late fees or grace periods would need to be specified in the lease agreement between the landlord and tenant. 

While not codified in law, any late fees should be reasonable. Courts may scrutinize excessive late fees even if they are included in a lease agreement.

Nebraska

There is no maximum late fee in Nebraska. Property owners in Nebraska do not need to observe a grace period before charging late fees.

Nevada

According to (NRS § 118A.210(4)(a))

  4.  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.

Nevada property owners do not need to provide tenants with a grace period. 

New Hampshire 

New Hampshire law doesn't set specific limits on late fees or mandate grace periods, however, any fees should be reasonable and clearly stated in the lease agreement. 

New Jersey

There is no maximum late fee or grace period  in New Jersey, however, an amendment to New Jersey's P.L.1976, c.100 ensures that certain renters are granted a five-business-day grace period to pay their rent without incurring late charges. Under the revised C.2A:42-6.1, rent due on the first of the month must be paid within this grace period, defined as any day other than a Saturday, Sunday, or state or federal holiday. 

This legislation specifically applies to senior citizens receiving Social Security, Railroad Retirement Pensions, or other similar pensions, as well as recipients of Social Security Disability Benefits, Supplemental Security Income, or Work First New Jersey benefits.

New Mexico

According to Justia.com: “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.”   

New York

According to New York Real Property Law § 238-a New York property owners are allowed to charge either a late fee of $50 or 5% of the monthly rent, whichever is lower. This is different than most other state laws, given that property owners are usually allowed to choose whichever value is higher. After rent becomes overdue, New York property owners must allow a grace period of five days.

North Carolina

The maximum late fee in North Carolina is $15 or 5% of the monthly rent, whichever is greater, or for weekly rentals, $4 or 5% of the weekly rent, whichever is greater. North Carolina property owners are obliged to observe a 5 grace period before applying late fees.

The specific language from NCGS § 42-46(a) states:

"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 days or more late."

North Dakota

North Dakota has no limits in regards to how much property owners can charge in late fees. Property owners in North Dakota do not need to observe a grace period before charging late fees.

Ohio

There is no maximum late fee for overdue rent in Ohio. After rent becomes overdue, Ohio property owners do not need to provide tenants with a grace period before applying fees. 

Oklahoma

There is no maximum late fee for overdue rent in Oklahoma. After rent becomes overdue, Oklahoma property owners do not need to provide tenants with a grace period before applying late fees. 

Oregon

Under ORS 90.302, Oregon landlords can charge tenants specific fees, including for late rent payments.. The maximum late fee a landlord can charge is capped at 5% of the unpaid rent. Additionally, landlords must allow a grace period of four business days before assessing any late fees, providing tenants with a fair opportunity to make their rent payments without immediate penalties. 

Pennsylvania

Pennsylvania law doesn’t specify a maximum late fee. Property owners in Pennsylvania are not obliged to observe a grace period before charging a late fee.

Rhode Island

There is no maximum late fee in Rhode Island. Property owners in Rhode Island can apply late fees after a 15 day grace period for overdue rent.

South Carolina

There is no maximum late fee in South Carolina. Rental businesses in South Carolina do not need to observe a grace period before charging late fees.

South Dakota

There is no maximum late fee in South Dakota. Rental businesses in South Dakota do not need to observe a grace period before charging late fees.  

Tennessee

In Tennessee, the maximum late fee a property owner can charge a tenant is $30 or 10% of the monthly rent, whichever is greater. Rental property owners in Tennessee must observe a five-day grace period before applying late fees. 

Texas

In Texas, under Sec. 92.019 of the Texas Property Code, landlords are permitted to charge late fees for unpaid rent, provided certain conditions are met. A late fee can only be collected if it is specified in a written lease, is deemed reasonable, and if any portion of the tenant's rent remains unpaid two full days after the due date. 

A late fee is considered reasonable if it does not exceed 12% of the rent for properties with up to four units, or 10% for properties with more than four units. The fee may include an initial charge and a daily fee, which together are treated as a single late fee. If a landlord violates these provisions, they are liable to the tenant for $100, three times the amount of the improper late fee, and the tenant's attorney's fees. Additionally, any lease clause attempting to waive these rights or exempt liability is void.

Utah

According to Utah state legislation:

(5) 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.

Vermont

Vermont property owners are not limited in terms of how much they can charge tenants for overdue rent. They also aren’t required to observe a grace period before applying late fees. 

Virginia

Accoring to Va. Code Ann. § 55.1-1204 “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” Rental property owners in Virginia must provide tenants with a five-day grace period before applying a late fee. 

Washington

There is no maximum late fee in Washington although it is noted that twenty dollars or twenty percent of the monthly rental amount is deemed ‘reasonable’. Rental businesses in Washington are required to provide a 5 day grace period before applying a late fee.

West Virginia

In West Virginia, there is no law governing maximum late fees. Rental businesses in West Virginia are not required to observe a grace period before charging a late fee. 

Wisconsin

There is no maximum late fee for overdue rent in Wisconsin. Wyoming rental businesses do not need to provide their tenants with a grace period.

Wyoming

There is no maximum late fee for overdue rent in Wyoming. Wyoming property owners do not need to provide their tenants with a grace period.

What if my state does not have a maximum late rent fee?

If your rental property is located in a state with no maximum late fees, the expectation is that tenants are charged a reasonable late fee. It’s a good idea to charge a similar late fee to neighboring states and provide a grace period of at least seven days as a gesture of goodwill. 

If neighboring states don’t have a maximum late fee, use your judgment to determine a reasonable flat fee for late payment.

How to calculate a late fee

Property owners can calculate late fees in several ways. As long as it doesn’t go against your state’s regulations, you can use any of the following methods to determine late rent fees:

• A flat fee, such as $50 or $100.
• A percentage fee based on the monthly rent, such as 5% or 10%.
• A daily fee of $5 or $10 for each day a tenant fails to pay rent following the rent due date, or the end of the grace period. 
• A combination late fee which includes a one-time late fee, plus a late fee for each day the tenant fails to pay rent.

How to enforce a late fee

Ideally, a late fee won’t have to be enforced. However, certain tenants may require more reminders than others. If a tenant is late on rent, wait for the designated grace period to pass and then provide them with a written notice requesting a late fee. 

Reference your lease agreement when writing the notice to make sure both you and your tenant are on the same page. This also helps document official communication between you and your tenant, which can be useful in court if late rent payments escalate to an eviction. 

It'll be easier to request a late fee from your tenant if you include it in the lease or rental agreement.

How Azibo can help 

Managing late fees can be complex, especially with varying regulations across different states. Azibo simplifies this process for property owners by offering customizable late fee settings.

With Azibo, you can easily set and enforce late fees that are reasonable and legally compliant. Our platform allows you to specify fee structures, grace periods, and maximum caps, ensuring transparency and fairness for tenants. 

Additionally, Azibo provides state-specific lease agreements with the ability to set grace periods and late fees, helping you stay compliant with local regulations while efficiently managing your rental properties. Streamline your rent collection process and ensure legal compliance with Azibo’s comprehensive property management tools.

Get started with Azibo today!

Ensuring fairness and compliance with late fees

Charging a late fee is a common practice among property owners that ensures rents are paid on time and your investment is protected. Tenants who owe late fees are often more motivated to pay their rent on time in the future.

Although property owners are limited in terms of how much they can charge and when, they’re well within their rights to charge a late fee for the inconvenience of receiving late rental payments. Every state has its regulations regarding late rent fees, so make sure to check local legislation before including a late fee clause in a written lease or enforcing late fees on your tenants.