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Phil Querin Q&A: What are the limitations on late fees?

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Phil Querin

Question:  What are the limitations on late fees?

Late Charges or Fees.


Guidelines. Landlords may impose a charge or fee[1] for late rental payments. However, they are subject to an array of limitations that must be observed. Below are the guidelines, all of which should be clearly set forth in the Rental or Lease Agreement:

(a)     They may only be imposed if rent is not received by the fourth day of the weekly or monthly rental period;

(b)     They must be specified as a tenant obligation;

(c)     The type and amount of the late charge must be specified (see Amount discussion below);

(d)     The date on which rent payments are due AND the date or day on which late charges become due.


Type and Amount of Late Charge or Fee. The following limitations apply:

  1. Flat Amount. A reasonable flat amount may be charged once per rental period (“reasonable amount” means the customary amount charged by landlords for that rental market) OR;
  2. Daily Charge. It may be charged daily, beginning on the fifth (5th) day of the rental period for which rent is delinquent;

(i) This daily charge may accrue every day until the rent (not including the late charge or fee) is paid in full.

                        (ii) However, the daily charge may not exceed:

  • Six percent (6.00%) of the “reasonable flat amount” described in paragraph (a) immediately above; OR
  • Five percent (5.00%) of the periodic rent, charged once for each succeeding five-day period (or portion thereof) for which the rent payment is delinquent, beginning on the fifth (5th) day of that rental period and accumulating until that rent payment (not including any late charge) is paid in full, through that rental period only.
  1. Caveat: The practice of levying a daily charge is fraught with calculation pitfalls. Assessing an incorrect charge can invalidate a notice of default for nonpayment.


For more information see, ORS 90.260.


[1] These terms may be used interchangeably.