Maryland late fee laws for rent: the 5 percent limit
Maryland puts its late fee limit inside the list of lease provisions a landlord may not use. Real Property 8-208(d)(3) says a lease may not provide for a late penalty above 5 percent of the rent due for the rental period that is unpaid, and for weekly rent a late penalty of more than $3 per week or $12 per month is barred. A lease clause that breaks the limit is unenforceable, and the tenant can recover actual damages and attorney's fees.
Where is Maryland's late fee rule?
It sits in section 8-208 of the Real Property Article, which lists what a lease may not contain. The late penalty item is one of thirteen. Others in the list include requiring a tenant to waive legal rights, setting a notice-to-quit shorter than the law allows, and demanding more than the security deposit plus the first month's rent to start the lease. Because it is written as a prohibition on lease provisions, the rule is aimed at the lease terms you put in a form.
How big can the penalty be?
Five percent of the unpaid rent for the delinquent rental period. For tenancies where rent is paid in weekly installments the limit is dollar-based instead, $3 per week and $12 per month in total.
Example a made-up Maryland unit rents for $1,500. If the tenant pays nothing, the late penalty cannot exceed 5 percent of $1,500, which is $75. If the tenant pays $1,000 on time and is $500 short, the base is the unpaid $500, so the penalty cannot exceed $25. A made-up weekly tenant paying $200 a week can be charged at most $3 for one late week, and at most $12 in a month.
Does Maryland require a grace period?
Not in this section. Section 8-208 sets a size limit and says nothing about how many days must pass before the penalty can apply. Whatever grace period your lease states is the one that governs, so write one in. Many Maryland landlords use five days, which is custom, not law. A written grace period that you then ignore creates a dispute, so apply your own lease the same way every month.
Can late penalties be added every day or every week?
The statute speaks of "a late penalty" with a ceiling per delinquent rental period, so a structure that keeps adding charges until the total passes 5 percent of the unpaid rent is outside the limit. Keep to a single charge per month's unpaid rent. The penalty is on a period's rent, not on earlier penalties.
What if the lease breaks the limit?
Under 8-208(g), a lease provision prohibited by the section is unenforceable by the landlord. If a landlord includes a prohibited provision, tenders a lease with one, or tries or signals an intent to enforce it, the tenant may recover actual damages including reasonable attorney's fees. A single unenforceable clause can become an expensive one, so keep late penalty wording simple.
How should the lease clause be worded?
Keep it short and numeric. A good Maryland clause names the day after which a late penalty applies, states the penalty as a single percentage no higher than 5 percent of the unpaid rent for that period, and says that it is charged once per late period. Avoid phrases such as "plus any collection costs" or "plus daily interest," because each addition risks pushing the total past the limit.
Remember the clause lives in a section that also bars many other terms. Do not combine your late fee wording with a waiver of the tenant's legal rights or a notice period shorter than the law requires, because a lease with one prohibited provision invites a closer look at every other clause. Using a simple form and checking it each year against the current section is cheaper than defending one clause later.
For tenancies that are paid weekly, the dollar limits take over. A weekly tenant paying $200 a week would be charged at most $3 for one late week, so a percentage clause written for monthly tenants should not be reused for them.
How DoorKeeping handles it in Maryland
DoorKeeping's Maryland rules carry the 5 percent ceiling. After you approve your late fee rule once, the fee posts automatically at or below it, and rent is matched from your own bank by memo and exact cents. Because Maryland sets no statutory grace days, the days in your lease apply. This is general information, not legal advice.
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Questions
- What is the maximum late fee in Maryland?
- Five percent of the unpaid rent for the rental period. For weekly rent, no more than $3 per week or $12 per month.
- Does Maryland have a grace period for rent?
- Section 8-208 sets none. The grace period in your lease controls.
- What happens if a Maryland lease has an illegal late fee?
- The clause is unenforceable, and the tenant may recover actual damages, including reasonable attorney's fees.