North Carolina late fee laws for rent: $15 or 5 percent, once
North Carolina G.S. 42-46(a) lets the parties agree to a late fee, chargeable only if rent is five calendar days or more late, of no more than the greater of $15 or 5 percent of the monthly rent. It can be imposed only one time for each late payment, it cannot be deducted from later rent, and a lease term that goes beyond the section is void.
How do you count the five days?
The statute counts "with the first day being the day after the rent was due." With rent due on the 1st, the 2nd is day one and the 6th is day five. A late fee is chargeable on the 6th, not before. Rent paid on the 5th is four days late and carries no fee.
Is it the greater or the lesser number?
The greater, which helps owners of low-rent units. For monthly rent, the fee may not exceed $15 or 5 percent of the monthly rent, whichever is greater. For weekly rent, $4 or 5 percent of the weekly rent, whichever is greater.
Example a made-up North Carolina tenant pays $1,000 a month. Five percent is $50, which beats $15, so the cap is $50. A made-up room rented at $240 a month has a 5 percent figure of $12, which is less than $15, so the cap is $15. A made-up weekly tenant at $160 a week has a 5 percent figure of $8, which beats $4, so the weekly cap is $8.
Can it be charged again or taken from next month's rent?
No on both counts. Subsection (b) allows the fee only one time for each late rental payment, so a daily or weekly fee is outside it. It also says a late fee for a specific late payment may not be deducted from a later rental payment so as to put that later payment in default. If last month's fee is unpaid, keep it on its own line; a full rent payment this month still counts as full rent.
Does it need to be in a written lease?
The late fee subsection says "the parties may agree to a late fee," and it applies where a definite time for the rent payment is fixed. It does not use the word written there, though other fees in the section (the filing and court fees) say "pursuant to a written lease." Put the late fee in writing anyway; an agreement you can prove is easier to enforce than one you cannot. A fee for failing to pay water or sewer service billed under G.S. 62-110(g) is not allowed under subsection (d).
What if the lease goes past the limits?
Subsection (h)(4) says a rental agreement provision contrary to the section is against public policy and void and unenforceable. The statute also limits the other fees an owner can claim for filing a complaint for summary ejectment, and says they cannot be deducted from a later rent payment either, so the late fee is only one of several tightly drawn charges in the same section.
Which mistakes does North Carolina law catch?
The first is the daily fee. A lease that adds $5 a day looks small but breaks the one-time rule in subsection (b). The second is rolling an old fee into the next payment: if a tenant owes last month's fee and sends full rent this month, you may not call this month's payment short because of the fee.
The third is the five-day count. Owners often count the due date as day one, which puts the fee a day too early. The statute makes the day after the due date day one, so a tenant who pays on the fifth of a month with rent due on the first has not yet reached the point where a fee can be charged.
Finally, keep litigation fees separate. The complaint-filing, court-appearance and second-trial fees in the same section have their own rules and caps, and only one of them may be kept for a single complaint. A late fee does not count toward those and they do not count toward it.
How DoorKeeping handles it in North Carolina
DoorKeeping's North Carolina rules carry the greater-of $15 or 5 percent cap and the five-day count. You approve a late fee rule once, and the fee posts automatically within it, one time per late payment. Tenants pay your own bank, matched by memo and exact cents. This is general information, not legal advice.
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Questions
- What is the maximum late fee in North Carolina?
- For monthly rent, $15 or 5 percent of the monthly rent, whichever is greater. For weekly rent, $4 or 5 percent of the weekly rent, whichever is greater.
- How many days late before a North Carolina landlord can charge a late fee?
- Rent must be five calendar days or more late, counting the day after the due date as day one.
- Can a North Carolina landlord charge a late fee more than once?
- No. It may be imposed one time for each late rental payment, and it cannot be deducted from a later payment.