California late fee rules for rent

No cap in the statute, but a test every late fee has to pass

A late fee is a sum the lease fixes in advance for a breach, in this case paying rent late. California calls that liquidated damages, and Civil Code § 1671 decides when such a clause holds up.

For most contracts the clause is valid unless the other side shows it was unreasonable. A lease of a home is treated differently. There the clause “is void” unless the parties agreed on the amount and, “from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.”

The statute gives no dollar figure and no percent of rent, so there is nothing to look up. A $75 fee on $2,500 rent works out to 3% of the rent, and a $75 fee on $1,200 rent works out to 6.25%, but neither percentage appears in the law as a limit or as a safe amount.

Home leases

The stricter test in subdivision (d) applies to a lease of real property used as a dwelling by the tenant or the tenant’s dependents. Cal. Civ. Code § 1671(c)(2)

The test

The clause is void unless the parties agreed on an amount and the actual damage would be impracticable or extremely difficult to fix. When the test is met, the agreed amount is presumed to be the damage from the breach. Cal. Civ. Code § 1671(d)

Dollar or percent limit

The statute sets no limit. Cal. Civ. Code § 1671

No state grace period: the lease sets the dates

The chapter of the Civil Code on renting homes has no section that makes a landlord wait a set number of days before charging a late fee. The one mention of fees for late payment we found there is a rule about COVID-19 rental debt.

The due date comes from the lease. If the lease says nothing, the Civil Code’s default is that rent is payable at the end of each period, which for a monthly rental means the end of the month. Most leases change that to the start of the month.

So a lease that says rent is due on the 1st and late after the 5th has a grace period because the lease gives one, not because a statute does.

Grace period

The statute sets none. Any grace days come from the lease. Cal. Civ. Code §§ 1940 to 1954.071

When rent is due

At the end of each rental period, unless the lease or usage says otherwise. Cal. Civ. Code § 1947

COVID-19 rental debt

No late fees on COVID-19 rental debt when the tenant submitted a declaration of COVID-19-related financial distress. Cal. Civ. Code § 1942.9(a)(1)

Fees the Civil Code rules out

Two fees that often sit next to a late fee on a tenant’s bill are barred by amendments that took effect in the Civil Code on January 1, 2025. A landlord or agent can’t charge a fee for paying rent or a deposit by check, and can’t charge a fee for serving, posting or delivering a notice.

The notice rule appears in the sections on ending a tenancy and in the unlawful detainer statute, so a charge for serving a three-day notice is covered.

A landlord also has to accept at least one way of paying that is neither cash nor electronic funds transfer, with a three-month exception after a bounced check or a stop payment.

Fee for paying by check

Not allowed for rent or a security deposit. Cal. Civ. Code § 1947.3(b)

Fee for a notice

No fee for serving, posting or otherwise delivering a notice. Cal. Civ. Code §§ 1946(b), 1946.1(i); Cal. Code Civ. Proc. § 1161(6)

Ways to pay

At least one form of payment that is neither cash nor electronic funds transfer. Cash can be required for up to three months after a check bounces or the tenant stops payment, with written notice and a copy of the dishonored check. Cal. Civ. Code § 1947.3(a)

Late fees and the three-day notice to pay rent or quit

A late fee and an eviction notice are separate steps. When rent stays unpaid, the notice that comes before an unlawful detainer case gives the tenant three days to pay or move out, and Saturdays, Sundays and judicial holidays don’t count toward the three.

The day of service isn’t counted. A notice served on a Thursday runs Friday, Monday and Tuesday, as long as none of those is a judicial holiday.

The statute describes a notice after “default in the payment of rent” that requires “its payment, stating the amount that is due.” It speaks of rent and doesn’t mention late fees. With $2,000 of rent unpaid and a $75 late fee on the ledger, the rent in default is $2,000.

Notice period

Three days in writing, not counting Saturdays, Sundays and other judicial holidays. Cal. Code Civ. Proc. § 1161(2)

What the notice states

The amount of rent due; the name, telephone number and address of the person to pay; and the usual days and hours for paying in person, or bank account or electronic transfer details. Cal. Code Civ. Proc. § 1161(2)

Time limit

The notice may be served at any time within one year after the rent becomes due. Cal. Code Civ. Proc. § 1161(2)

Counting the days

The day of service is left out and the last day is included. Cal. Code Civ. Proc. § 12

Rentals this page doesn’t cover

Spaces in mobile home parks follow the Mobilehome Residency Law. There, a homeowner can’t be charged a fee for anything other than rent, utilities and incidental reasonable charges for services actually rendered, and a three-day notice for nonpayment has to wait until the amount has been unpaid at least five days from its due date.

Commercial leases fall under the general test in § 1671(b), not the home lease test. Subsidized housing programs can add their own late fee rules, and cities and counties can add rules on top of state law, so check the local code and any rent board where the unit sits.

Mobile home park fees

No fee for other than rent, utilities and incidental reasonable charges for services actually rendered. Cal. Civ. Code § 798.31

Mobile home park nonpayment

Unpaid at least five days from the due date, then a three-day written notice. The five days don’t include the date the payment is due. Cal. Civ. Code § 798.56(a)(5)(A)