What to Do When Your Tenant Won’t Pay Late Fees

When it comes to property management, handling late payments and enforcing late fee policies is a challenge. Late rent payments can disrupt your cash flow, making it harder to cover mortgage payments, maintenance costs, and other property expenses. While no one likes paying extra fees, a clear late fee policy encourages on-time payments and helps protect your rental business.

If a tenant pays rent late but refuses to pay the associated late fee, your next steps depend on your lease agreement and applicable state law. In many cases, you can resolve the issue through clear communication and proper documentation without escalating the situation.

Here’s what landlords can and can’t do when a tenant won’t pay late fees.

Key Takeaways

• Include a clear late fee policy in every lease agreement.
• Verify that your late fee complies with state and local laws.
• Communicate professionally and document all late payments.
• Consider including an Allocation of Payments clause in your lease.
• Understand unpaid late fees may be deducted from a security deposit, if permitted by law.
• Know that unpaid late fees alone generally are not grounds for eviction.
• Consult a qualified attorney if you’re unsure how your state’s laws apply.

Best Practices for Preventing Late Rent Payments

While you can’t completely eliminate the possibility of late payments, you can reduce the risk by following consistent procedures.

Write a late fee policy into your lease

First and foremost, you’ll want to write a tenant late fee policy into your lease to establish expectations before a tenant moves in.

Your lease should clearly explain:

• When rent is due
• Whether a grace period applies
• How much the late fee is
• When the late fee is assessed
• How unpaid late fees will be handled
• Any payment allocation provisions included in the lease

States with late fee laws

Check your state laws before you add a late fee provision, as some jurisdictions restrict the amount you may charge for a late fee and how long of a grace period you must allow before charging a late fee.

State	Grace period	Late fee limits
Alaska	No statute	Automatic late fees are only legally enforceable if they have been agreed upon beforehand
Arizona	Five days	$5 per day from rent due date
California	No statute	Lease must have a provision for late fees, and late fees must be a reasonable estimate of loss
Colorado	Seven days	$50 or 5% of past due rent, whichever is greater
Connecticut	Nine days for standard and month-to-month leases, four days for week-to-week leases	$5 per day up to $50 or 5% of total rent due, whichever is smaller
Delaware	Five days, eight days if landlord doesn’t have an office in the same county as the rental	5% of monthly rent
Florida	No statute	$20 or 20% of monthly rent, whichever is greater
Hawaii	No statute	8% of monthly rent
Iowa	No statute	$12 per day or $60 per month for monthly rents $700 or less, $20 per day or $100 per month for monthly rents over $700
Maine	15 days	4% of monthly rent
Maryland	No statute	5% of rent due for standard and month-to-month leases, $3 per week up to $12 per month for week-to-week leases
Massachusetts	30 days	No statute
Minnesota	No statute	8% of overdue rent
Nevada	Three days	5% of rent
New Jersey	Five days	No statute
New Mexico	No statute	10% of rent, and landlord must give tenant notice
New York	Five days	$50 or 5% of monthly rent, whichever is less
North Carolina	Five days	Standard or month-to-month leases: $15 or 5% of monthly rent, whichever is greater Week-to-week leases: $4 or 5% of weekly rent, whichever is greater
Ohio	Three days	No statute
Oregon	Four days	Late fees must either be a reasonable flat rate, a reasonable daily accrual rate, or a maximum of 5% of rent
Tennessee	Five days	10% of overdue rent
Texas	Two days	12% of rent for a unit in a building with four units or less and 10% of rent for a unit in a building with more than four units, or no more than the direct and indirect costs of late payments
Utah	No statute	$75 or 10% of rent, whichever is greater
Virginia	Five days	10% of rent or 10% of outstanding balance, whichever is smaller
Washington	Five days	No statute
Washington, D.C.	Five days	5% of total rent due

 

Offer online rent payments

Making it easy for tenants to pay rent can help reduce late payments. Online rent collection gives tenants the flexibility to pay from anywhere, set up recurring payments, and receive confirmation when a payment is submitted.

Apartments.com Rental Tools makes it easier to collect rent online, keep a record of rental income, set up automatic late fees for overdue rent, and get all the documents for filing taxes, all while offering your tenants a convenient payment option that removes common barriers contributing to missed due dates.

Send payment reminders before rent is due

A simple reminder can go a long way in preventing late payments. Consider sending a friendly email or text message a few days before rent is due. Payment reminders help tenants stay organized, especially if they’re managing multiple bills each month.

If you collect rent through Apartments.com, your renter will receive automatic rent payment reminders, helping you mitigate the risk of late payments without adding another thing to your to-do list.

Keep written records of every payment and communication

Maintaining detailed records is one of the best ways to protect your rental business. Save copies of payment confirmations, late fee notices, emails, text messages, and any written correspondence related to rent payments. If a disagreement arises over an unpaid balance or late fee, accurate documentation can help demonstrate that you’ve consistently enforced your lease terms and communicated with the tenant in a professional manner.

What to Do When a Tenant Refuses to Pay Late Fees

If a tenant refuses to pay a late fee, don’t assume they’re acting in bad faith. They may have overlooked the charge or misunderstood their balance.

Send a reminder

Start by sending a polite written reminder that includes:

• The date rent was due
• The date payment was received
• The amount of the late fee
• The lease provision authorizing the fee
• The remaining balance owed

Keep your communication professional and factual. Many payment disputes can be resolved with a simple reminder.

If the tenant continues refusing to pay despite the lease clearly requiring the fee, you’ll need to decide how to enforce your lease while remaining compliant with the state law.

Document every late payment

Good documentation can protect you if a dispute arises later.

Maintain records of:

• Rent due dates
• Payment dates
• Late fee assessments
• Written notices
• Email or text communications
• Payment history
• Outstanding balances

Accurate documentation demonstrates consistent enforcement of your lease and can be valuable if legal action becomes necessary.

Use an Allocation of Payments clause

One of the most effective lease provisions for handling unpaid late fees is an Allocation of Payments clause. This clause specifies how payments are applied when a tenant owes multiple charges.

For example:

• Monthly rent: $1,500
• Outstanding late fee: $60
• Total amount due: $1, 560

If the tenant only submits $1,500, the payment may first be applied to the outstanding late fee, with the remaining balance applied toward rent.

In this example:

• $60 satisfies the unpaid late fee.
• The remaining $1,440 is applied to rent.
• The tenant still owes $60 in unpaid rent.

This approach allows you to enforce the lease consistently while maintaining accurate accounting records. Because state laws differ, confirm that this practice is permitted where your property is located.

Can You Deduct Unpaid Late Fees from the Security Deposit?

Depending on your lease agreement and state law, unpaid late fees may be deductible from a tenant’s security deposit at move-out.

Before doing so, review your state’s security deposit laws, confirm your lease allows the deduction, provide any required written notices or itemized statements, and keep documentation supporting the deduction. Some jurisdictions restrict what landlords may deduct from a security deposit, so always verify applicable requirements before withholding funds.

Can You Evict a Tenant for Unpaid Late Fees?

In many situations, late fees alone are not sufficient grounds for eviction. However, if your lease includes an Allocation of Payments clause, unpaid late fees may eventually result in an unpaid rent balance. Whether that balance can support eviction depends on your lease and applicable state law.

Remember that eviction is often costly and time-consuming. If the tenant otherwise pays rent consistently, resolving the dispute through communication may be the more practical option.

Late fees encourage timely rent payments and help protect your rental income, but enforcing them requires a combination of clear lease language, consistent documentation, and compliance with state law. By creating a legally compliant late fee policy, communicating professionally with tenants, and documenting every payment, you’ll be better prepared to handle situations when a tenant doesn’t pay late fees while maintaining a positive landlord-tenant relationship.

This article was originally published on September 13, 2019, by Megan Bullock and has been updated.

FAQs

Can a tenant refuse to pay late fees?

A tenant may refuse to pay a late fee, but whether they’re legally responsible depends on the lease agreement and applicable state or local law. Review your lease carefully before deciding how to proceed.

Can unpaid late fees become unpaid rent?

If your lease contains an Allocation of Payments clause, payments may first be applied to outstanding fees, leaving part of the monthly rent unpaid. Whether this approach is permitted depends on your state’s laws.

Should landlords waive late fees?

Some landlords choose to waive a late fee as a one-time courtesy for otherwise reliable tenants. If you do, document the decision and explain that future late payments will be handled according to the lease.

Can landlords charge any amount as a late fee?

No. Many states limit the amount landlords can charge and may require grace periods before assessing a fee. Always verify state and local regulations before adding a late fee provision.