Maximum Late Fees by State: The Ultimate Guide

As a landlord, however reliable your tenants may seem, you will likely deal with late rent payments from time to time. If your tenant has not paid their rent by the date specified in the lease, you are usually within your rights to charge a late fee. The idea is that this offsets the inconvenience of the late payment and also encourages on-time payments in the future.

However, this does not mean that property owners can charge unreasonable late fee payments whenever they want and for however much they want. Landlords may not charge an unreasonably high late rent fee. Generally, late rent fees are equal to around 5% of the monthly rent.

Depending on where your rental properties are located, there will be varying legislation regarding late fees. In this article, we break down the typical late fee for rent by state.

When can landlords charge late fees?

Before we dive into the maximum late fees by state, we need to first establish when rent can be considered late. If a tenant misses a rent payment, you will have to wait until the grace period is over before you can request a fee. If the state landlord-tenant law does not specify a grace period, a landlord can technically charge a late fee the day after the rent is due. Mandatory grace periods vary by state and range from 1 day to 30 days.

Even if your rental properties are located in a state that has no specified grace period, it is a good idea to outline one in the lease anyway. This will provide clear expectations for your tenants and help to avoid any confusion.

Related: What Landlords Need To Know About Late Rent Fees And Grace Periods

What are the maximum late fees by state?

The maximum late fees by state and their guidelines on grace periods are as follows:

Alabama

Maximum late fee: No limit

Grace period: 7 days

Alaska

Maximum late fee: No limit

Grace period: 7 days

Arizona

Maximum late fee: No limit (except for mobile homes which are limited to $5 per day)

Grace period: 5 days

Arkansas

Maximum late fee: No limit

Grace period: None specified

California

Maximum late fee: No limit

Grace period: None specified

Colorado

Maximum late fee: No limit

Grace period: None specified

Connecticut

Maximum late fee: No limit

Grace period: 9 days

Delaware

Maximum late fee: 5% of the monthly rent

Grace period: 5 days

D.C.

Maximum late fee: 5% of the monthly rent

Grace period: 5 days

Florida

Maximum late fee: No limit

Grace period: None specified

Georgia

Maximum late fee: No limit

Grace period: None specified

Hawaii

Maximum late fee: 8% of the monthly rent

Grace period: None specified

Idaho

Maximum late fee: No limit

Grace period: None specified

Illinois

Maximum late fee: $20 or 20% of the monthly rent, whichever is greater

Grace period: None specified

Indiana

Maximum late fee: No limit

Grace period: None specified

Iowa

Maximum late fee: $12 per day or $60 per month if the rent is less than $700. If the rent is over $700, the limit is $20 per day or $100 per month.

Grace period: None specified

Kansas

Maximum late fee: No limit

Grace period: None specified

Kentucky

Maximum late fee: No limit

Grace period: None specified

Louisiana

Maximum late fee: No limit

Grace period: None specified

Maine

Maximum late fee: 4% of the monthly rent

Grace period: 15 days

Maryland

Maximum late fee: 5% of the monthly rent

Grace period: None specified

Massachusetts

Maximum late fee: No limit

Grace period: 30 days

Michigan

Maximum late fee: No limit

Grace period: None specified

Minnesota

Maximum late fee: 8% of the monthly rent

Grace period: None specified

Mississippi

Maximum late fee: No limit

Grace period: None specified

Missouri

Maximum late fee: No limit

Grace period: None specified

Montana

Maximum late fee: No limit

Grace period: None specified

Nebraska

Maximum late fee: No limit

Grace period: None specified

Nevada

Maximum late fee: 5% of the monthly rent

Grace period: None specified

New Hampshire

Maximum late fee: Limited to the amount of rent

Grace period: None specified

New Jersey

Maximum late fee: No limit

Grace period: 5 days for senior citizens, no grace period for others

New Mexico

Maximum late fee: 10% of the monthly rent

Grace period:  None specified

New York

Maximum late fee: 5% of the monthly rent or $50, whichever is less (rent-controlled property may have different rules)

Grace period: 5 days

North Carolina

Maximum late fee: 5% or $4 for week-to-week leases, whichever is greater, or 5% or $15 for monthly leases, whichever is greater

Grace period: None specified

North Dakota

Maximum late fee: No limit

Grace period: None specified

Ohio

Maximum late fee: No limit

Grace period: None specified

Oklahoma

Maximum late fee: No limit

Grace period: None specified

Oregon

Maximum late fee: 5% of the monthly rent

Grace period: 4 days

Pennsylvania

Maximum late fee: No limit

Grace period: None specified

Rhode Island

Maximum late fee: No limit

Grace period: None specified

South Carolina

Maximum late fee: No limit

Grace period: None specified

South Dakota

Maximum late fee: No limit

Grace period: None specified

Tennessee

Maximum late fee: 10% of the monthly rent or $30, whichever is greater

Grace period: 5 business days

Texas

Maximum late fee: $12 of the monthly rent for properties with less than 4 rental units and $10 of the monthly rent for structures with 4 or more rental units.

Grace period: 1 day

Utah

Maximum late fee: No limit

Grace period: None specified

Vermont

Maximum late fee: Limited to the costs incurred to the landlord by the rent being late

Grace period: None specified

Virginia

Maximum late fee: No limit

Grace period: 5 days

Washington

Maximum late fee: No limit

Grace period: None specified

West Virginia

Maximum late fee: No limit

Grace period: None specified

Wisconsin

Maximum late fee: $20 or 20% of the monthly rent, whichever is greater

Grace period: 5 business days

Wyoming

Maximum late fee: No limit

Grace period: None specified

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

In states there is no landlord-tenant law regarding maximum late fees, the expectation is that the fee should remain reasonable. As a landlord, this means not taking advantage of your tenants by only charging them however much you need to, to offset the downsides of unpaid rent.

It should also be noted that each state has varying rules regarding when a landlord can begin eviction proceedings against a tenant who has not paid their rent. This is different from the grace period for late rent payments, so you should check with your local landlord-tenant law for further clarification.

Minimizing late rent with Landlord Studio

While late fees may seem like a passive way for a landlord to increase their rental returns, it is a hassle to deal with unpaid rent. It’s generally better for all parties involved if the rent is paid in full and on time every month.

Taking advantage of purpose-built property management software like Landlord Studio will enable your tenants to automate rent payments. They will no longer have to worry about remembering to pay rent and you will have peace of mind that it will be directly transferred to your bank account on the right day of the month.

Another advantage of using property management software is that you can also automate rent reminder emails. You can send your tenants an email before their rent is due to remind them of the upcoming date or send an email after the due date has passed to remind them of the grace period.

Should the rent remain unpaid when the grace period comes to an end, Landlord Studio enables you to automate the late fee and easily collect your owed rent. This makes it easier for you to manage your rental property but also sets a clear expectation for the tenant. It removes any confusion about what money is owed and when, as the process is fully automated and recorded.

Final words

Before renting out your next property (or even if you’re already managing existing tenants), it pays to brush up on the legislation regarding late rent payments in your state. This way, you can be sure that you are charging a fair and reasonable amount, enabling you to minimize future late rent payments and keep your cash flow consistent.

Disclaimer

We hope you found this blog interesting! However, do note that the information in this article does not constitute advice. This blog is for general informational and educational purposes only and should not be used as a substitute for competent legal and/or other advice from a licensed professional.

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