A Guide to Late Rent Fees and Grace Periods

FT Contributor  | 

Renters may sometimes make late rent payments. Mistakes happen, but landlords will typically charge a late fee if this occurs. This guide will help tenants better understand the rules and regulations concerning late fees when the rent is tardy — and how to pay them.

Late Rent Fees

Landlords may choose to charge late fees to encourage tenants to pay on time, to make up for the hassle of collecting the rent payment, or to cover any expenses that may happen when the rent payment is late. If the landlord is paying a home mortgage on the rental , a late rental payment may mean they don’t have the funds to cover the mortgage payment or other bills, which could result in bounced check fees on the landlord’s part.

The late fees your landlord charges may vary depending on the state’s laws and the method used. There are a variety of ways rental late fees can be calculated. Some landlords charge a percentage of the rent (usually 5% to 10%). Others will charge the set percentage and add a penalty charge for every day the rent is late. Other landlords keep it simple by charging a flat late fee.

If you’re wondering what happens when you pay your rent late and how much it will cost you, check your lease agreement. Standard rental contracts or leases will include the information you need, such as the amount of your rent and when it’s due, whether you have a rental payment grace period (how many days you have to pay your rent without late fees), the late rent fees your landlord will charge, and how they should be paid.

Are Rent Late Fees Legal?

Landlords can legally charge late rent fees — although there are restrictions. Late rent fees are only legal if they’re written into the lease. There are also limits to how much a landlord can charge in late fees. Each state has its own rules regarding these fees. For example, landlords in North Carolina must allow a grace period of five days and are limited to a fee of 5% of the rent amount.

When Do Late Fees Become Illegal?

Although late fees and rent grace periods can vary by state, it’s illegal for a landlord to charge rental late fees that are not mentioned in a late fee clause in the lease, regardless of the state.

Can I Dispute My Late Rent Fee?

If you feel you are being wrongfully charged a late fee, then yes, you can dispute it. It may be difficult to resolve, but it can be done, and documentation and communication are key.

Depending on your landlord-tenant relationship, you may call first and then submit a written dispute outlining why you think the late rent fee is incorrect. Provide your landlord with evidence that you paid the rent on time by showing the check was cashed within the grace period or by showing proof that you sent (and the landlord received) the rent payment on time.

To avoid the hassle of late rental fees, it’s best to schedule electronic bank payments that can be tracked or pay the rent in person and requesting a payment receipt.

Rent Grace Periods

A grace period is the period of time a landlord allows for rent to be paid without considering the payment to be late. Not all states have grace-period laws, but there are good reasons for rent grace periods — if your rent is due on the first of each month and the first is a Sunday, a grace period gives you extra time to pay your rent. If you believe you won’t be able to pay rent within the grace period, there are steps you can take to avoid late rent fees.

Keep Communication Open

If you foresee that you will be late on rent, communicate this to your landlord. Depending on whether you’re working with a rental agency or directly with a private renter, they might waive your late fee because of your circumstances.

Request a Grace Period

If your lease doesn’t include a grace period, consider asking your landlord to add one, especially if you plan on mailing your rental payments. Don’t rely on a verbal agreement, make sure the landlord adds it to your lease agreement as an addendum that’s signed by both parties.

What If I Don’t Pay My Late Fee?

If you’re wondering, “What happens if I pay my rent late?” don’t fear. You won’t go to jail if you don’t pay your rent within the grace period or if you don’t pay the late fees. However, there are consequences. Here is what happens if you make it a habit to not pay your rent on time or refuse to pay the late fees:

May Affect Your Credit Score

According to Equifax, “Landlords or leasing companies aren’t required to report to the three nationwide credit bureaus, but some do.” If your landlord reports your rental payment history to the credit bureaus, it can drop your credit score and affect your chances of qualifying for a credit card or your next apartment rental.

The Landlord May Deduct the Late Fees From Next Month’s Rent Payment

Some landlords have an “allocation of payments” clause in the lease. If this is the case, and you refuse to pay your rental late fees, your landlord could legally apply a portion of your next rent payment towards your unpaid late fees.

You Could Lose Your Security Deposit

If you refuse to pay your late fees, your landlord could deduct them from your security deposit. And depending on how your late fees are structured, you may owe interest on the late fees which could balloon to a larger amount than you expected when it’s time to move out.

You Could Be Evicted

If you don’t pay your rent or your late fees, your landlord can evict you. Each state has specific rules and regulations on evictions but all agree that unpaid rent and fees without a good reason are cause for eviction.

What Happens if You Pay Your Rent Late?

Paying your rent late can cost you late fees. But if you plan on paying your rent on time, a single rental late fee shouldn’t affect you too much. It’s best to avoid making it a habit to make late rent payments. And make sure you read your lease carefully and understand your rights and responsibilities as a tenant.


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