North Carolina late fee rules for rent

When a North Carolina late fee is allowed

Section 42-46 covers residential rental agreements that fix a definite time for paying rent. The landlord and tenant can agree to a late fee, and the fee has to fit inside the limits of the section.

The fee is chargeable when a rent payment is five calendar days or more late. The count starts the day after the rent was due. With rent due on the 1st, the 2nd is day one and the 6th is day five.

Agreed by both sides

The parties may agree to a late fee that fits the section. The section applies where the rental agreement sets a definite time for paying rent. N.C. Gen. Stat. § 42-46(a)

Five calendar days

No late fee until a rent payment is five calendar days or more late. Day one is the day after the rent was due. Weekends and holidays count, since the statute says calendar days. N.C. Gen. Stat. § 42-46(a)

Once per payment

A late fee may be charged one time for each late rent payment. N.C. Gen. Stat. § 42-46(b)

How much: $15 or 5%, whichever is greater

For rent due in monthly installments, the late fee can’t be more than $15 or 5% of the monthly rent, whichever is greater. The two numbers meet at $300 of rent. Above that, 5% is the limit.

On $1,200 rent the limit is $60. On $1,500 it is $75. On $250 rent, 5% is $12.50, so the limit is $15.

For rent due in weekly installments, the limit is $4 or 5% of the weekly rent, whichever is greater. On $300 a week that is $15. On $60 a week, 5% is $3, so the limit is $4.

Rent due monthly

$15 or 5% of the monthly rent, whichever is greater. N.C. Gen. Stat. § 42-46(a)(1)

Rent due weekly

$4 or 5% of the weekly rent, whichever is greater. N.C. Gen. Stat. § 42-46(a)(2)

Subsidized rent

The fee is figured on the tenant’s share of the contract rent. The subsidy is left out. This applies when the rent is subsidized by HUD, the USDA, a State agency, a public housing authority or a local government. With a $1,200 contract rent and a $400 tenant share, 5% is $20. N.C. Gen. Stat. § 42-46(h)(5)

What a late fee can’t do

A late fee for one late payment may not be taken out of a later rent payment in a way that puts the later payment in default. Example: June rent is late and a $60 fee is owed. When the tenant pays July rent in full and on time, the statute doesn’t let the landlord apply $60 of it to the June fee and then treat July as short.

The section names no dollar penalty for charging too much. It says any term of a residential rental agreement that goes against the section is against public policy, void and unenforceable.

Later rent payments

A late fee may not be deducted from a later rent payment so that the later payment is in default. N.C. Gen. Stat. § 42-46(b)

Water and sewer

No late fee under this section for a tenant’s failure to pay for water or sewer service billed under G.S. 62-110(g). N.C. Gen. Stat. § 42-46(d)

Contrary lease terms

Void and unenforceable. The statute sets no fine or multiplier in this section. N.C. Gen. Stat. § 42-46(h)(4)

Fees tied to an eviction filing are separate

The same section allows three administrative fees when a landlord files for summary ejectment or money owed. Each needs a written lease, and a landlord may charge and keep one of the three for a complaint, not all of them.

On $1,200 monthly rent, the complaint-filing fee tops out at $60, the court-appearance fee is $120 and the second trial fee tops out at $144. For subsidized rent, these are figured on the tenant’s share too.

Like a late fee, an administrative fee may not be taken out of a later rent payment, and not paying it can’t be called a default for a later summary ejectment case. A lease can’t add other administrative fees for filing a complaint.

Complaint-filing fee

Up to $15 or 5% of the monthly rent, whichever is greater. Allowed when the tenant was in default, the landlord filed and served a complaint, the tenant cured the default, and the landlord dismissed the complaint before judgment. It can be included in the amount needed to cure. N.C. Gen. Stat. § 42-46(e)

Court-appearance fee

10% of the monthly rent. Allowed when the tenant was in default and the landlord filed, served and won the case in small claims court. If the tenant appeals and the magistrate’s judgment is vacated, the fee is vacated too. N.C. Gen. Stat. § 42-46(f)

Second trial fee

Up to 12% of the monthly rent in the lease. For a new trial after an appeal from the magistrate’s judgment. The landlord has to prove the tenant was in default and has to prevail. N.C. Gen. Stat. § 42-46(g)

One of the three

A landlord may charge and keep one of these fees for a complaint. N.C. Gen. Stat. § 42-46(h)(1) to (h)(3)

Out-of-pocket costs

Court filing fees, costs for service of process, and reasonable attorneys’ fees under a written lease. Attorneys’ fees are limited to 15% of the amount the tenant owes, or 15% of the monthly rent when the eviction is for a default other than nonpayment. These costs can be included in the amount needed to cure a default. N.C. Gen. Stat. § 42-46(i), (j)

If the rent still isn’t paid

A late fee and an eviction are separate steps. Section 42-3 says that in a lease with a definite time for paying rent, the tenant forfeits the term if the rent isn’t paid within 10 days after the landlord or the landlord’s agent demands all past-due rent.

If the tenant pays or tenders the rent due and the costs of the action before judgment, section 42-33 says the proceedings stop. A residential tenant can be removed solely through the court procedure in Chapter 42.

Demand for rent

Forfeiture is implied when rent isn’t paid within 10 days after a demand for all past-due rent. N.C. Gen. Stat. § 42-3

Court process

A residential tenant is removed through the procedure in Article 3 or Article 7 of Chapter 42, not by self-help. N.C. Gen. Stat. § 42-25.6

Paying before judgment

If the tenant pays or tenders the rent due and the costs of the action before judgment, the case stops. N.C. Gen. Stat. § 42-33

Rentals and charges this page doesn’t cover

Section 42-46 is written for residential rental agreements, so commercial leases are outside this page. Subsidized housing programs can add their own late fee rules on top of the state limit, and cities or counties can add rules of their own.

Since July 1, 2025, the section also covers leases that require the tenant to carry insurance. The tenant can’t be required to buy it from a named carrier or agent. If the tenant doesn’t show proof within three business days after the landlord asks, the landlord may charge the actual cost of getting the coverage plus an administrative fee of up to $50 a year.

Required insurance

Actual cost of the coverage plus an administrative fee of up to $50 a year, after three business days without proof. N.C. Gen. Stat. § 42-46(l)