Standard late fee calculations

Late fees are usually calculated as simple interest on the overdue amount for the number of days delayed.

A common standard is 12% to 18% per annum (approx 1% to 1.5% per month).

Enforceability

  • Late fees must be reasonable and not penal (e.g., 50% interest is likely void).
  • Must be documented in the rent agreement to be legally enforceable.
  • Always issue a formal receipt for any late fees collected.