Landlord Question
Late fees are one of the easiest places to make a costly mistake, because the most common assumption, that a fee can start on the 2nd or 3rd, is wrong under Texas law.
Under Property Code §92.019, a Texas landlord can charge a late fee only if notice of the fee is in a written lease, the fee is reasonable, and rent has remained unpaid two full days after the due date. A fee is presumed reasonable at up to 12% of monthly rent for buildings with four or fewer units, or 10% for buildings with more than four.
“Two full days after” the due date means that if rent is due on the 1st, the 2nd and 3rd must pass completely. The earliest a late fee can apply is the 4th. Leases that charge a fee on the 2nd or 3rd are out of line with the statute.
A late fee is presumed reasonable if the total does not exceed:
| Monthly rent | Max fee, 4 or fewer units (12%) | Max fee, 5+ units (10%) |
|---|---|---|
| $1,500 | $180 | $150 |
| $2,000 | $240 | $200 |
| $2,500 | $300 | $250 |
A landlord can charge more only by showing the fee is not more than the uncertain damages caused by late payment, such as collection costs and administrative time. That is a harder argument to win, so most owners stay inside the safe harbor.
Many leases combine an initial fee with a daily fee. Texas allows that structure, but the initial fee and all daily fees together count as one late fee for the reasonableness limit (§92.019(b)). If the 12% cap on a $2,000 rent is $240, the initial fee plus every daily fee for that month cannot exceed $240 under the safe harbor.
Tenants can also ask for a written statement of late fees owed (§92.0191). Not responding does not cancel fees the tenant legitimately owes, but it is an easy way to lose credibility in a dispute.
Atlas collects rent and applies late fees within these limits for Houston owners through rent collection. For deposits, repairs and the rest of the rules, see the Texas landlord-tenant law hub.
This guide is general information for Texas landlords, not legal advice. Laws change and every lease is different, so talk to a Texas real estate attorney about your situation.
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No. Rent must remain unpaid two full days after the due date. If rent is due on the 1st, the earliest a late fee can apply is the 4th.
A fee is presumed reasonable up to 12% of monthly rent for buildings with four or fewer units, or 10% for buildings with more than four. Higher fees must be justified by the landlord’s uncertain damages from late payment.
Yes, if the lease provides for them, but the initial fee and all daily fees combined count as one late fee for the reasonableness limit.
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