Can Texas landlords charge any amount in late fees? Here’s what the law says
You pay your rent a few days late and notice an extra charge has been added to your balance.
At first glance, it may seem like there’s not much you can do. After all, you paid late.
But does paying rent late automatically mean a landlord can charge any amount they want in fees?
Here’s what to know.
How much can Texas landlords legally charge in late fees?
Under Texas law, landlords can only charge late fees that are considered “reasonable.”
That means a late fee of no more than 12% of the monthly rent for properties with four or fewer units, or 10% of the monthly rent for properties with more than four units, according to the Texas Property Code.
“For example, the total late fee (initial fee plus any additional daily fees) on a single-unit property will be deemed reasonable if it is less than 12% of the monthly rent, but a landlord may impose a higher fee if its actual costs resulting from the late payment are more than that amount,” the State Bar of Texas’ Tenants’ Rights Handbook states. “If its actual costs are not higher, 12% is the maximum total fee that may be legally charged.”
Those thresholds are often described as “safe harbors,” meaning landlords don’t have to justify a fee that falls within them.
When can Texas landlords charge a late fee?
According to the Texas Property Code, a landlord can’t charge a late fee unless a portion of the rent remains unpaid for at least two full days after the due date.
The lease must also include a late fee policy. Otherwise, a landlord can’t charge one.
“If you do not pay your rent on the due date (or within the grace period if one is provided in the lease), the landlord usually has the discretion to either terminate the lease agreement or accept the rent and the appropriate late fee,” the Tenants’ Rights Handbook states. “If you offer to pay the rent and appropriate late fee and the landlord refuses to accept it, you may still have a chance in court if your lease provides for notice and time within which to cure a violation of your lease”
A court may consider rent paid on time if a landlord has established a clear and undisputed pattern of accepting late payments, the handbook states.
What happens if a landlord charges an unlawful late fee?
According to the Texas Property Code, tenants may be entitled to damages if a landlord collects a late fee that violates state law.
The law allows tenants to recover $100, three times the amount of the unlawful fee collected, and attorney’s fees.
“Additionally, a landlord may be in violation of the Deceptive Trade Practices-Consumer Protection Act if the landlord charges extremely excessive late fees,” the handbook states. “A court may also refuse to evict a tenant if the only alleged violation is that the tenant refused to pay an unreasonable late fee.”
The handbook also notes that tenants can request a written statement explaining the late fees charged by a landlord, though a landlord’s failure to provide that statement doesn’t automatically excuse a tenant from paying reasonable late fees owed under the lease.
