Virginia late fee laws for rent: 10 percent of the smaller number
Virginia Code 55.1-1204(E) says a landlord may not charge for late payment of rent unless the written rental agreement provides for it, and the charge cannot exceed the lesser of 10 percent of the periodic rent or 10 percent of the remaining balance due and owed by the tenant. The statute sets no grace period for a written lease, so the days in your lease control.
What is the Virginia formula?
There are two measuring sticks and the smaller one wins. One is 10 percent of the periodic rent. The other is 10 percent of the remaining balance the tenant owes. Because of the second, the fee shrinks when the tenant has paid most of the month.
Example a made-up Virginia tenant rents for $1,500, so 10 percent of the periodic rent is $150. The tenant pays $1,300 on the 1st and owes $200. Ten percent of the remaining $200 balance is $20, which is lower than $150, so the cap for this month is $20. If the tenant had paid nothing, the balance is $1,500, both numbers match and the cap is $150.
Does the fee have to be in the lease?
Yes. The first sentence says the charge must be provided for in the written rental agreement. Without a written lease the statute gives a default framework in subsection C: rent due the first of each month is considered late if not paid by the fifth, and after that the landlord may charge a late charge as provided in the chapter. For anything in a written lease, state both the fee and the day it applies.
How long a grace period do you have to give?
None by statute for a written lease; the lease sets the date. That makes the wording important. A lease that says "late after the 5th" gives a five-day cushion by contract. The cushion is not a legal minimum, but once you wrote it in, you should follow it.
Can the charge be daily or compound?
The cap is on "such late charge," a single charge measured against one number: the monthly rent or the balance owed. A daily charge that adds up beyond that ceiling would exceed it, and a charge calculated on a balance that includes earlier late charges runs into the "balance due" test. Keep it to one charge for each late month.
How do partial payments change the number?
More than in most states. Because the cap is the lesser of two figures, every dollar the tenant pays shrinks the second one. A tenant who is $50 short has a cap of $5 on the balance test, no matter how large the monthly rent is. For that reason, calculate the fee from the balance still owed on the day the fee is posted, and keep a note of the figure used.
It also pays to be consistent in the lease. If the clause says "10 percent of the monthly rent," it is promising the tenant a number that the statute may not allow when only part is unpaid. A clause that says "the lesser of 10 percent of the monthly rent or 10 percent of the unpaid balance" matches the statute and avoids a mismatch.
Last, keep the written lease and the late charge matched. The statute requires that the charge be provided for in the written rental agreement, so a policy you only announced in an email does not meet that test.
How DoorKeeping handles it in Virginia
DoorKeeping's Virginia rules hold the 10 percent cap and the written-lease requirement. After you approve a late fee rule once, it posts automatically at or under the cap, and because the balance can shrink with partial payments, the amount is figured from what is actually unpaid. Tenants pay your own bank. This is general information, not legal advice.
Sources
Questions
- What is the maximum late fee in Virginia?
- The lesser of 10 percent of the periodic rent or 10 percent of the remaining balance due and owed by the tenant.
- Does a Virginia late fee have to be in the lease?
- Yes. The charge must be provided for in the written rental agreement.
- Is there a grace period in Virginia?
- For a written lease, the statute sets none, and the lease controls. Without a written lease, rent due on the first is late if not paid by the fifth.