Rent & Late Fees
Late Fees That Will Actually Stand Up in Court
Grace periods, percentage caps, and the 'liquidated damages' rule courts use to strike down excessive fees.
Updated February 27, 2026 · 5 min read
Courts treat late fees as liquidated damages: they have to bear a reasonable relationship to the harm caused by late rent. A fee that looks like a penalty tends to get thrown out.
As a rough guide, 5% of monthly rent after a 3–5 day grace period is broadly enforceable. Anything approaching 10% is aggressive and, in states like Maryland and Massachusetts, illegal.