Texas spells out late fees to the day and to the percent. Charge one the wrong way and it can cost you far more than it ever collects.
Texas late fee law lives in one section of the Property Code. It sets three conditions, a safe-harbor cap, and a penalty that makes a small mistake expensive.
Late fees feel like routine lease boilerplate, which is exactly why owners get them wrong. The rules in Texas Property Code Section 92.019 are short and specific: when a fee can be charged, how much is presumed reasonable, how daily fees count, and what happens when a landlord gets it wrong. Here is each piece, in plain English.
Under Section 92.019(a), a landlord may not collect a late fee unless all three of these are true:
If rent is due on the 1st, the 2nd and 3rd are the two full days. The earliest a late fee can be charged is the 4th. Some sources still describe a one-day rule, but the current statute requires two full days, so set your lease and your software to match.
Section 92.019(a-1) gives landlords a safe harbor. A late fee is considered reasonable if it is not more than:
In dollars: on a $1,800 single-family home, the safe-harbor maximum is $216. On a $1,200 apartment in a building with more than four units, it is $120.
The statute does allow a higher fee, but only if it is not more than the landlord's uncertain damages related to the late payment, such as the direct or indirect expenses, costs, or overhead of collecting it. That is a standard the landlord would have to justify. Staying inside the 12 or 10 percent safe harbor is simpler and safer.
Section 92.019(b) lets a late fee include an initial fee plus a daily fee for each day any portion of the rent remains unpaid. The catch: the combined fees are treated as a single late fee. The total is what has to stay within the cap, not each piece on its own.
Example: on $1,800 rent, a $100 initial fee plus $10 a day reaches $210 after 11 daily charges. A 12th daily charge would bring the total to $220, over the $216 safe-harbor limit. If your lease uses a daily fee, it should stop accruing once the total reaches the cap.
Under Section 92.019(c), a landlord who violates the late fee rules is liable to the tenant for $100, plus three times the late fee collected in violation of the section, plus the tenant's reasonable attorney's fees. An improper $300 late fee becomes $100 plus $900 plus legal fees.
Two more provisions close the usual escape routes. Under Section 92.019(d), a lease clause that tries to waive these rules is void. And under Section 92.019(e), a tenant who pays the fee doesn't give up the rights and remedies the section provides.
Section 92.019(e) also makes clear that the late fee rules don't affect a landlord's right to terminate the lease or take other action the lease or other law permits. Late fees and nonpayment remedies are separate tracks. For what happens when rent stays unpaid, see how long eviction really takes in Texas.
We write late fee terms inside the statutory safe harbor, set our rent software to charge no earlier than the law allows, and follow a documented timeline when rent stays unpaid, so collections stay firm without creating liability for you. If chasing late rent isn't how you want to spend your month, we can handle it.
Talk to Alta ResidentialPrefer to talk it through? Call 214-775-0807, Monday to Friday, 8:30 AM to 5:30 PM.
The best late fee is the one you never have to charge. Good tenant screening reduces late payments before they start, and a thoughtful approach to rent increases and renewals keeps good residents paying on time.
Only after any portion of the rent has remained unpaid two full days after the date it was originally due, under Texas Property Code Section 92.019. If rent is due on the 1st, the 2nd and 3rd are the two full days, so the earliest a late fee can be charged is the 4th. The fee must also be disclosed in a written lease and be reasonable.
Section 92.019 treats a late fee as reasonable if it is not more than 12 percent of the rent for the rental period when the home is in a structure with four or fewer units, or 10 percent when the structure has more than four units. A higher fee is allowed only if it is not more than the landlord's uncertain damages related to the late payment, which the landlord would have to justify.
Yes. The statute allows an initial fee plus a daily fee for each day any portion of the rent stays unpaid, but the combined fees are treated as a single late fee. The total, not each piece, has to stay within the 12 percent or 10 percent limit to fall within the safe harbor.
Under Section 92.019(c), a landlord who violates the late fee rules is liable to the tenant for $100, plus three times the late fee collected in violation of the section, plus the tenant's reasonable attorney's fees. A lease provision that tries to waive these rules is void.
Source: Texas Property Code Section 92.019. This guide is general information for Texas rental owners, not legal advice. Statutes and their interpretation change. Confirm specifics with a licensed Texas attorney before setting or charging late fees. Alta Residential · 325 N. St. Paul St., Suite 3100, Dallas, TX 75201 · 214-775-0807.