Late Fee Clause
in Your Lease
What it actually means, what Minnesota law says, what's specific to Minneapolis - and exactly what to do. In plain English.
Quick Summary - What You Need to Know
- Minn. Stat. § 504B.177(a) says a residential landlord may not charge a late fee unless the tenant and landlord "have agreed in writing that a late fee may be imposed", and that agreement "must specify when the late fee will be imposed". Our record of the section finds no grace period figure.
- The same paragraph sets the ceiling: "In no case may the late fee exceed eight percent of the overdue rent payment." It adds that a late fee charged or collected "is not considered to be either interest or liquidated damages".
- Since January 1, 2025, § 504B.177(c) has a landlord with a housing assistance payments contract calculate a late fee "only on the portion of rent payable by the tenant". § 504B.177(b) lets a federally subsidized tenancy follow a conflicting federal fee schedule.
- From August 1, 2026, § 504B.118, subd. 3 bars assessing late fees when rent goes unpaid because both the landlord's digital payment platform and the alternative it must offer are not functioning for the tenant.
- Our record of the Minneapolis code finds no city grace period or cap on a residential late fee. § 244.2060 requires written notice at least 30 days before a nonpayment eviction action, with a specific accounting of unpaid rents, late fees or other charges.
Understanding the Late Fee Clause
Every late fee has a start and a size. Minnesota fixes the size with a percentage, and it makes the start a term the lease has to put in writing.
Minn. Stat. § 504B.177(a) bars a late fee unless tenant and landlord "have agreed in writing that a late fee may be imposed". The agreement "must specify when the late fee will be imposed", and the fee may not exceed eight percent of the overdue rent payment.
Our record of the section finds no count of days a landlord must wait.
Our record of the Minneapolis code finds no city rule on the fee itself. What the city adds comes later: § 244.2060 requires written notice at least 30 days before a landlord brings an eviction action for nonpayment, and that notice must account for every late fee claimed.
What renters assume
With no grace period in Minnesota's late fee section, a landlord can start a fee of any size the morning after rent is due, whether or not the lease ever mentioned one.
What is actually true
§ 504B.177(a) allows no late fee without a written agreement that one may be imposed, and that agreement "must specify when the late fee will be imposed". The size is fixed by the statute: "In no case may the late fee exceed eight percent of the overdue rent payment." The missing day count is a term the section asks the lease to supply, not a blank cheque.
Minneapolis's bar is blank because the comparison counts days of grace, and our Minnesota record finds none. Ten of the 21 rows show no figure: Los Angeles, Miami, Chicago, Phoenix, Atlanta, Columbus, Newark, Detroit, Minneapolis, and Philadelphia, where the row reads no statute.
The other 11 rows set a wait, running from Boston at 30 days and Baltimore at 10 down to Denver at 7. New York City, Seattle, Nashville, Washington and Charlotte sit at 5, then Portland at 4, Las Vegas at 3 and Austin at 2.
The blank hides the limit Minnesota does set. A ceiling of eight percent of the overdue rent payment caps the amount, which a bar measuring days cannot draw.
Nor can it show Minneapolis's 30 days of written notice before a nonpayment eviction action, a clock on the case rather than on the fee.
Plain English Version
In Minneapolis, a late fee has to be agreed in writing before it can be charged, and the written agreement has to say when the fee starts. The state section we read gives no day count of its own, so the lease is where to find that date.
Whatever the lease says, the fee cannot be more than eight percent of the late rent payment. If a housing assistance contract pays part of your rent, the fee is figured on your share alone.
And before a Minneapolis landlord can file an eviction for unpaid rent, you get written notice and 30 days to put it right.
Late Fee Clause Example - What the Wording Looks Like in Minneapolis, MN
The sample clause below is real lease language - a court quoted it word for word, and then ruled on it. What the judge decided is at the bottom of this block.
Find the equivalent paragraph in your own lease and read the two side by side. The wording will differ; the moving parts rarely do.
Tenant acknowledges either late payment of Rent or issuance of a returned check may cause Landlord to incur costs and expenses, the exact amount of which are extremely difficult and impractical to determine.
If any installment of Rent due from Tenant is not received by Landlord within 5 calendar days after the date due, or if a check is returned, Tenant shall pay to Landlord, respectively, an additional sum of $50.00 as a Late Charge…
Landlord and Tenant agree that these charges represent a fair and reasonable estimate of the costs Landlord may incur by reason of Tenant's late or NSF payment.
Quoted from the published opinion in Del Monte Properties and Investments, Inc. v. Dolan, 26 Cal.App.5th Supp. 20 (2018). Judicial opinions are not subject to copyright; the lease language is reproduced in limited part for commentary under 17 U.S.C. § 107.
“are extremely difficult and impractical to”
This recital is the lease building a liquidated-damages defence: the landlord's loss cannot be worked out, so a fixed sum stands in for it. That was California's test, and the landlord lost it. Minnesota's section answers with a label and a number instead. Under Minn. Stat. § 504B.177(a) a late fee charged or collected “is not considered to be either interest or liquidated damages”, and “In no case may the late fee exceed eight percent of the overdue rent payment.” Our record of the section says nothing about the landlord's cost of late rent. The yardstick it does give a Minneapolis renter for this fee is the cap.
“due from Tenant is not received by Landlord within 5 calendar”
This is the timing term, and in Minnesota it is the term the lease has to carry. § 504B.177(a) bars a late fee unless tenant and landlord “have agreed in writing that a late fee may be imposed”, and the agreement “must specify when the late fee will be imposed.” Our record of the section finds no grace period figure. What it does require is a written statement of when the fee starts, and a sentence like this one is where a lease makes it. A Minneapolis lease that prices a late fee and never says when it begins is missing what the statute asks for.
“the date due, or if a check is”
Two Minnesota rules meet here. The first is what counts as the due date: under § 504B.177(a) it does not include an earlier date by which a tenant earns a discount for paying, so a lease offering an early-payment discount cannot start the fee from the discount date. The second is how the rent travels. From August 1, 2026, § 504B.118, subd. 3 requires a landlord who requires or permits payment on a digital platform to offer an alternative when the platform is not functioning, with no fee for using it.
“Landlord, respectively, an additional sum of”
Here the lease names its price, and Minnesota puts a ceiling over it measured against the payment that was late. The court recorded rent of $600 and a fee of $50 in this case, about 8.3%, a share that would sit just above the eight percent line in § 504B.177(a). Because the cap is a share of the overdue payment, a flat dollar figure has to be checked against the rent it is charged on. In Minneapolis, any fee claimed must also appear in the accounting that § 244.2060 requires in a written notice at least 30 days before a nonpayment eviction action.
The clause was held void and unenforceable. Rent was $600 a month and the late fee $50 - about 8.3%. It failed both halves of California's liquidated-damages test: the landlord could not show its losses from late rent were hard to work out (its own trial exhibit showed they were calculable), and its witness admitted the $50 was simply set as a percentage of the rent, with no attempt to estimate the actual cost.
One court, one lease, one state. That answer is not automatically yours, and your lease may be worded to land differently. Use this to know what to look for and what to ask - your state's tenant hotline or a local tenant attorney can answer it for your document.
Minnesota Law on Late Fee Clause
- Writing first, then a ceiling. Minn. Stat. § 504B.177(a) provides that "A landlord of a residential building may not charge a late fee if the rent is paid after the due date, unless the tenant and landlord have agreed in writing that a late fee may be imposed. The agreement must specify when the late fee will be imposed. In no case may the late fee exceed eight percent of the overdue rent payment." The same paragraph says any late fee charged or collected "is not considered to be either interest or liquidated damages."
- An early-payment discount date is not the due date. Under § 504B.177(a), the "due date" does not include a date, earlier than the date contained in the written or oral lease, by which the tenant earns a discount if the rent is paid. So a lease that offers a discount for paying early cannot treat the discount date as the date after which the late fee runs.
- Subsidized tenancies have their own rules. Section 504B.177(b) lets a landlord publish and implement a late payment fee schedule that complies with a federal statute, regulation or handbook permitting late fees for a tenancy subsidized under a federal program where that federal rule conflicts with paragraph (a). Paragraph (c), added by Laws 2024, chapter 118, section 13, effective January 1, 2025, requires a landlord with a housing assistance payments contract to calculate and assess any late fee "only on the portion of rent payable by the tenant."
- From August 1, 2026, a broken payment portal is not the tenant's late payment. Laws 2026, chapter 81, section 2 rewrote Minn. Stat. § 504B.118 so that a landlord who requires or permits rent to be paid on a digital payment platform must offer an alternative if the platform is not functioning, with no fee for using it, and "is prohibited from taking any adverse action, including but not limited to filing an eviction or assessing late fees" when rent is not paid because both the platform and the landlord's alternative are not functioning for the tenant.
Sources include Minn. Stat. § 504B.177(a); Minn. Stat. § 504B.177(b); Minn. Stat. § 504B.177(c); Minn. Stat. § 504B.118, subd. 3; Minn. Stat. § 504B.321, subd. 1a; Minneapolis Code of Ordinances § 244.2060 - statutes change; verify the current text for your situation.
Minnesota's late fee rule is one paragraph, and it runs in a fixed order: writing first, then a ceiling. Under Minn. Stat. § 504B.177(a), a residential landlord "may not charge a late fee if the rent is paid after the due date" unless the tenant and landlord "have agreed in writing that a late fee may be imposed."
The next sentence puts the timing on paper: "The agreement must specify when the late fee will be imposed." Our record of the section finds no count of days a landlord must wait, which makes the start of the fee a term the statute requires the written agreement to state. Then the cap: "In no case may the late fee exceed eight percent of the overdue rent payment."
Two more sentences in the same paragraph shape how a fee is read. A late fee charged or collected "is not considered to be either interest or liquidated damages".
And the "due date" does not include an earlier date by which a tenant earns a discount for paying, so an early-payment discount date is not the day a late fee can start from.
Paragraphs (b) and (c) deal with subsidized housing. § 504B.177(b) covers a federal statute, regulation or handbook that permits late fees for a federally subsidized tenancy and conflicts with paragraph (a). There the landlord may publish and implement a fee schedule that complies with the federal rule. § 504B.177(c), added by Laws 2024, chapter 118 and in force since January 1, 2025, requires a landlord with a housing assistance payments contract to assess any late fee "only on the portion of rent payable by the tenant."
A newer rule covers rent paid online. From August 1, 2026, § 504B.118, subd. 3 requires a landlord who requires or permits payment on a digital platform to offer an alternative when the platform is not functioning, with no fee for using it.
Where both are not functioning for the tenant, the landlord "is prohibited from taking any adverse action, including but not limited to filing an eviction or assessing late fees".
The state's notice before a nonpayment eviction, under § 504B.321, subd. 1a, must give a specific accounting of "unpaid rent, late fees, and other charges under the lease". It must also tell the tenant: "Some local governments may have an eviction notice period longer than 14 days." Minneapolis sets its own period, as the next section shows.
Minnesota Tenant Protections
Minn. Stat. § 504B.177(a) provides that a landlord of a residential building may not charge a late fee if the rent is paid after the due date, unless the tenant and landlord have agreed in writing that a late fee may be imposed. The agreement must specify when the late fee will be imposed, and in no case may the late fee exceed eight percent of the overdue rent payment.
A late fee charged or collected is not considered to be either interest or liquidated damages, and the due date does not include an earlier date by which the tenant earns a discount. Under § 504B.177(b), a landlord may follow a conflicting federal late fee schedule for a tenancy subsidized under a federal program.
Under § 504B.177(c), effective January 1, 2025, a landlord with a housing assistance payments contract must calculate and assess any late fee on the portion of rent payable by the tenant.
From August 1, 2026, § 504B.118, subd. 3 requires a landlord using a digital payment platform to offer an alternative at no fee when the platform is not functioning, and bars assessing late fees when both are not functioning for the tenant. In Minneapolis, § 244.2060 requires written notice at least 30 days before an eviction action for nonpayment, with a specific accounting of unpaid rents, late fees or other charges.
Our record of the Minneapolis code finds no city grace period or cap for a residential late fee.
What's Specific to Minneapolis
Figures are the state rule, or the stronger city ordinance where one exists. Verify the current law for your own situation before relying on it.
Minneapolis renters live under both the state chapter above and a city code of their own. For the city layer, our record read the Minneapolis Code of Ordinances on Municode, Supplement 73, Update 1, codified through Ordinance No. 2026-020, adopted June 25, 2026.
On the fee itself that code is quiet as our record read it: it finds no Minneapolis grace period and no cap for a residential late fee. Searches for "late fee", "late fees", "late charge", "late payment" and "grace period" returned provisions on city licenses, permits, registrations, filing fees, civil fines, city utility billing and freelance workers. One section on landlords and tenants came back: § 244.2060.
That section governs the eviction that can follow unpaid rent, not the fee. At least 30 days before bringing an eviction action alleging nonpayment of rent or other unpaid financial obligations, a landlord must give the tenant written notice.
The notice must state the basis for the future eviction action and carry a specific accounting of the total due. That total is the one "comprised of unpaid rents, late fees, or other charges under the lease", which puts every fee on paper before any case is filed.
Under § 244.2060(e), the landlord may bring the eviction action if the tenant fails to correct the delinquency within 30 days of delivery or mailing of the notice, or fails to vacate. Under § 244.2060(f), a landlord who does not comply may face criminal prosecution, adverse rental license action and administrative fines.
The state notice in § 504B.321, subd. 1a asks for its own accounting of "unpaid rent, late fees, and other charges under the lease". Its required statement warns that "Some local governments may have an eviction notice period longer than 14 days." In Minneapolis, the city section's figure is 30 days.
For a renter, the notice is the useful document. Its accounting is where each late fee can be checked against the clause that created it and against the eight percent ceiling in § 504B.177(a).
And the date the notice was delivered or mailed starts the city's 30 days, so write that date down the day it arrives.
The city code keeps moving. Municode listed two adopted ordinances not yet codified, Nos. 2026-024 and 2026-025, which concern liquor premises dress codes and dangerous animals. Read the current code, and anything adopted since, before you quote it to your landlord.
§ 504B.177(a) allows no late fee unless tenant and landlord "have agreed in writing that a late fee may be imposed". A clause that says so plainly is the starting point the statute requires.
The agreement "must specify when the late fee will be imposed". Our record of the section finds no day count of its own, and the statute asks the clause to state that date.
"In no case may the late fee exceed eight percent of the overdue rent payment." A flat figure or a daily charge that can climb past that line is the wording to fix before signing.
Under § 504B.177(a) the "due date" does not include an earlier date by which the tenant earns a discount. A clause that starts the fee from the discount date starts it from the wrong day.
Sources
The law this guide relies on, and where to read it. Statutes change, so confirm the current text before you act on it.
- Minn. Stat. § 504B.177(a); Minn. Stat. § 504B.177(b); Minn. Stat. § 504B.177(c); Minn. Stat. § 504B.118, subd. 3; Minn. Stat. § 504B.321, subd. 1a; Minneapolis Code of Ordinances § 244.2060, read on revisor.mn.gov. The Minnesota Revisor of Statutes prints § 504B.177 in the 2025 Minnesota Statutes, with a History line ending in the 2024 amendment that took effect on January 1, 2025.
Red Flags to Watch Out For
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A late fee no clause created
§ 504B.177(a) requires a written agreement that a late fee may be imposed. A charge on the ledger with no lease paragraph behind it is the first thing to ask your landlord about.
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A fee that can top eight percent
"In no case" may the fee exceed eight percent of the overdue rent payment. Check a flat fee against your own rent, and add up any daily charges for the same late payment.
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A fee with an amount but no start
The agreement "must specify when the late fee will be imposed". A clause that names a figure and leaves out the trigger leaves out a term the statute requires it to state.
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A fee on the full rent of an assisted unit
With a housing assistance payments contract, § 504B.177(c) limits the fee to "the portion of rent payable by the tenant". A fee figured on the whole rent uses the wrong base.
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An eviction filing with no 30-day notice
In Minneapolis, § 244.2060 requires written notice with an accounting of unpaid rents, late fees or other charges at least 30 days before a nonpayment eviction action. § 244.2060(f) backs it with prosecution, rental license action and fines.
Your Rights as a Minneapolis Tenant
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No late fee without a written agreement
Under § 504B.177(a) a late fee may not be charged unless you and the landlord agreed in writing that one may be imposed, and the agreement must say when.
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A ceiling of eight percent
"In no case may the late fee exceed eight percent of the overdue rent payment", under § 504B.177(a).
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Assisted tenants pay on their own share
Since January 1, 2025, § 504B.177(c) requires a landlord with a housing assistance payments contract to assess a late fee on the portion of rent payable by the tenant and nothing more.
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No late fee for a broken payment portal
From August 1, 2026, § 504B.118, subd. 3 bars assessing late fees when both the digital payment platform and the landlord's alternative are not functioning for you.
What To Do - Step by Step
Find the late fee clause and read it word for word
Check that the lease says in writing that a late fee may be imposed, and when. § 504B.177(a) requires both, and our record of Minneapolis's code adds no local rule on the fee.
Work out eight percent of the late payment
Take eight percent of the overdue rent payment and compare it with everything charged for that payment, daily charges included.
Check the start date against the real due date
If the lease offers a discount for paying early, the fee cannot run from the discount date. Under § 504B.177(a) an earlier discount date is not the due date.
Check the base if assistance pays part of the rent
Under § 504B.177(c) the fee is figured on your share of the rent. If you paid online and the platform failed, note the dates for § 504B.118, subd. 3.
Read a Minneapolis eviction notice line by line
The § 244.2060 notice must arrive at least 30 days before an eviction action and account for unpaid rents, late fees and other charges. Write down the day it was delivered or mailed.
Get advice while the 30 days are running
Under § 244.2060(e) the landlord may bring an eviction action if the delinquency is not corrected within 30 days, or you do not vacate. Minnesota legal aid offices and tenant help lines can review the lease, the ledger and the notice in that window.