Excessive Late Fees

While Texas law allows a landlord to charge a fee for late payment of rent, the amount and conditions of such fees are regulated by statute. If you have been charged an excessive late fee - even if you did not pay the late fee - you may be entitled to compensation.

What happens if a landlord charges an excessive late fee?

Section 92.019 of the Texas Property Code allows a tenant who has been charged an illegal late fee to recover from their landlord:

• • Three times amount of the late fee charged in violation of the law;

  • An extra payment of $100; 

  • The tenant's reasonable attorneys fees.

Moreover, a tenant is entitled to these remedies regardless of whether or not the tenant actually paid the late fee. In other words, simply the fact that the landlord tried to make you pay an illegal late fee is enough to entitle you to compensation. However, if you did pay the late fee, the best reading of Texas law (though the law is unclear on this point) is that you are entitled to both a return of that money AND the penalty of three times the amount you were charged.   

When is a late fee excessive under Texas law?

Texas law does not define an excessive late fee in terms of a specific dollar amount. Instead, Section 92.019 provides that a late fee is excessive unless the fee is a "reasonable estimate" of the damages that the landlord suffers from late payment of rent. Generally the tenant has the burden of proof to show that the late fee is not a reasonable estimate.

Additionally, no matter what the amount of the fee, and landlord may not charge a late fee without allowing for a grace period - one full day after the day rent is due. Moreover, notice of the late fee must be contained in a written lease, and late fees can only be assessed when allowed by the lease.