Category: fees

What Oregon Law Says About Late Fees (ORS 90.260)

Oregon's late fee statute, ORS 90.260, is one of the strictest in the nation. It doesn't just cap the amount—it dictates when fees can be charged, how many times, and what happens if you get it wrong. For self-managing landlords, this is a bright-line rule: miss one detail and you've exposed yourself to a tenant lawsuit with attorney fees attached.

The statute reads: "A landlord shall not collect rent that is not due and shall not collect rent in excess of the amount that is due. A late fee or other charge in addition to rent shall not be collected unless: (a) The late fee is specified in a rental agreement; and (b) The amount of the late fee does not exceed six percent of the monthly rent."

On its surface, this sounds simple. But the law has teeth beyond the 6% cap. It also mandates that fees can only be charged after a specific trigger (5 days late), cannot be multiplied or stacked, and create explicit liability for landlords who violate the rule. This section is enforced by Oregon's Bureau of Labor and Industries (BOLI), the Attorney General's office, and private tenant lawsuits.

The 6% Cap: What It Means and How to Calculate It

Oregon's 6% cap is absolute. It applies to every late fee you charge and every late fee provision in your lease. If your lease says "10% late fee," that clause is void—the 6% limit overrides it automatically. You cannot negotiate around it, and ignorance of the law is not a defense.

Calculating Your Maximum Late Fee

The math is straightforward but often misunderstood. The 6% applies to monthly rent, not the total amount due or any other base.

Example: If monthly rent is $1,500, your maximum late fee is $1,500 × 0.06 = $90. That's the ceiling for any single late fee charge. If rent is $2,000, the cap is $120. If rent is $800, the cap is $48.

This calculation matters because some landlords try to base the fee on the total delinquent amount (rent + prior late fees), which inflates the calculation and violates the statute. Oregon courts have rejected this approach. The fee must be calculated on the monthly rent amount only.

What Counts as "Monthly Rent"?

Under ORS 90.260, "monthly rent" means the base rental payment in the lease agreement. It does NOT include:

• Utilities (if separately billed)
• Pet fees or pet rent
• Parking fees
• Parking permit fees
• Late fees themselves
• Court costs or collection fees
• Any optional services or add-ons

Only the stated monthly rental amount triggers the 6% calculation. If you charge a separate pet rent or parking fee (which many landlords do in Oregon), those are distinct obligations and do not factor into the late fee base.

The Five-Day Grace Period: When You Can Actually Charge a Late Fee

This is where many Oregon landlords run into trouble. You cannot charge a late fee on day 1, day 2, day 3, or even day 4 of non-payment. ORS 90.260 mandates a five-day grace period before any late fee can be assessed.

Timeline:

• Days 1–5: Rent is late, but no late fee can be charged. This is automatic under the law—your lease cannot shorten this window.
• Day 6 and beyond: Late fee becomes chargeable (capped at 6% of monthly rent).

Some landlords misread this rule and believe the grace period means rent isn't due for 5 days. That's incorrect. Rent is due on the date specified in the lease (usually the 1st of the month). The grace period only delays when you can charge a fee for non-payment. The rent itself is still late.

If your lease says "Rent due by the 1st; late fee applies if unpaid by the 7th," you're compliant. If it says "late fee applies if unpaid by the 2nd," it violates ORS 90.260 and the clause is unenforceable. Tenants could argue that charging a fee before day 6 is a violation of the statute, and courts have agreed.

One Late Fee Per Month: No Stacking, No Acceleration

Oregon law permits only one late fee per month, even if rent remains unpaid across multiple billing cycles. This is critical for landlords managing long-term delinquencies.

What "One Late Fee Per Month" Means

If a tenant owes rent for three months (January, February, March), you cannot charge three separate late fees—one for each month. You can charge one late fee covering the entire delinquent period, capped at 6% of monthly rent.

Example: A tenant owes rent for January ($1,500), February ($1,500), and March ($1,500)—total $4,500 delinquent. You can charge one late fee of $90 (6% of $1,500), not three $90 fees. Charging three separate fees violates the statute.

Some landlords attempt to work around this by charging a "processing fee," "collection fee," or "administrative charge" in addition to the late fee. Oregon courts view this as fee stacking and have rejected it as violating ORS 90.260's prohibition on collecting charges "in addition to rent" beyond the single late fee.

Late Fees Cannot Increase or Compound

Some lease agreements try to include "escalating late fees"—for example, "$50 late after 5 days, $100 late after 15 days." This is prohibited. The late fee is fixed at 6% (or lower if you specify a lower amount in the lease) and does not increase based on how long the rent remains unpaid.

You also cannot charge interest on late fees or add late fees to future months' rent calculations. The fee is separate, one-time per billing period, and capped.

Lease Language Requirements: What Your Rental Agreement Must Say

ORS 90.260 requires that the late fee "be specified in a rental agreement." This means your lease must explicitly state that a late fee exists and the amount (or formula) for calculating it. A late fee that isn't mentioned in the lease cannot be charged, even if it's "customary."

Compliant Late Fee Language

Acceptable language:
"Tenant agrees to pay a late fee of $[amount] (not to exceed 6% of monthly rent) if rent is unpaid five days after the due date."

Also acceptable:
"If rent is not received by the 6th of the month, Tenant will owe a late fee of 6% of monthly rent."

Problematic language:
"A late fee of 10% will apply if rent is late." (Exceeds 6% cap; unenforceable.)
"Late fees will apply starting day 1 if rent is unpaid." (Violates 5-day grace period; unenforceable.)
"Additional fees may apply for late payment." (Too vague; not "specified"; unenforceable.)

Your lease should specify the exact dollar amount or the percentage (up to 6%) of monthly rent. Vague language like "reasonable late fees" or "as permitted by law" creates enforceability problems and gives tenants grounds to argue the fee was never properly agreed upon.

If you want to charge less than 6%—say, 4% or 5%—that's compliant. The statute says "does not exceed six percent," so lower amounts are always allowed. However, you cannot charge more than the amount stated in the lease.

Timing and Documentation: How to Properly Assess Late Fees

Charging a late fee incorrectly—even by one day—creates liability. Here's the compliance process:

Step 1: Confirm Rent is Actually Due

Check the lease to confirm the due date. Most Oregon leases make rent due on the 1st of the month, but some specify a different date (e.g., the 15th). Late fees cannot be assessed on any date before the stated due date.

Step 2: Wait Five Days After Due Date

Do not assess a late fee until rent is five days past due. If the due date is the 1st, the earliest you can charge a fee is the 6th. If the due date is the 15th, the earliest is the 20th.

Step 3: Calculate the Fee (Maximum 6%)

Multiply monthly rent × 0.06. Round down if necessary. Do not include late fees themselves, pet rent, parking fees, or utilities in the base calculation.

Step 4: Document Everything

Record the following in your accounting system or rent payment platform:

• Date rent was due
• Date rent was received (if applicable)
• Date late fee was assessed
• Monthly rent amount
• Late fee amount charged
• Lease provision cited
• Tenant account number

If you use a property management platform, ensure your settings enforce the five-day grace period automatically and calculate the fee cap correctly. Some platforms allow manual overrides, which can lead to violations. Use compliance automation to prevent errors.

Step 5: Communicate Clearly

When you assess a late fee, provide written notice to the tenant that includes:

• The specific date rent was due
• The specific date it is now past due
• The amount of the late fee and how it was calculated
• The lease provision allowing the fee
• A breakdown of the balance due (rent + late fee)

This documentation protects you in two ways: it demonstrates compliance and prevents disputes about whether the tenant was properly informed.

Common Compliance Mistakes: What NOT to Do

Oregon landlords frequently violate ORS 90.260 without realizing it. Here are the most dangerous mistakes:

Mistake 1: Charging a Late Fee Before Day 5

If you charge a fee on days 1–5, it is unenforceable. Tenants can refuse to pay it and sue for damages if you pursue collection. Even if you file for eviction, a tenant's counterclaim for violating ORS 90.260 can result in the eviction being dismissed and you owing the tenant attorney fees.

Mistake 2: Exceeding 6% of Monthly Rent

Any fee above 6% is void. If your lease says 8% and you charge it, the excess is a violation. A tenant can recover the excess amount plus damages.

Mistake 3: Charging Multiple Late Fees Per Month

This is a direct violation. You can assess the fee once per billing period. If rent remains unpaid into the next month, you can assess a fee for that month (one fee), but not additional fees for the prior month's debt.

Mistake 4: Calling It a Different Name to Avoid the Cap

Some landlords attempt to charge a "handling fee," "processing charge," or "administrative fee" in addition to the late fee. Oregon courts consider this fee stacking. Under ORS 90.260, the statute applies to "a late fee or other charge in addition to rent"—the word "other" is key. Any charge triggered by late payment counts toward the cap.

Mistake 5: Including Late Fees in Eviction Notices Without Documentation

If you file for eviction based on non-payment and include late fees in the claimed balance, the fees must be properly documented and calculated. A tenant can challenge the eviction by arguing the late fees were assessed illegally. If the court agrees, the eviction may be dismissed and the case reopened for damages.

Mistake 6: Not Accounting for Partial Payments

If a tenant pays part of the rent but not all of it by day 5, the question arises: when can you charge a late fee? Oregon law is clear: if any portion of rent is unpaid after five days, a late fee can be assessed on the full monthly rent amount (not the unpaid portion). However, document the partial payment separately to demonstrate that a shortfall existed on day 6.

What Happens If You Violate ORS 90.260

Oregon's remedies for late fee violations are significant. ORS 90.260(4) states: "A landlord who violates this section is liable for actual damages, cost of court and reasonable attorney fees of the prevailing tenant or former tenant."

Actual Damages

Actual damages include the wrongfully charged late fees plus any consequential harm (e.g., if an improper late fee caused the tenant to miss another bill). The amount is the excess over the legal limit or the entire fee if it was charged before day 5.

Court Costs and Attorney Fees

If a tenant sues and wins, you pay both sides' legal fees. In Oregon, "reasonable attorney fees" typically range from $150–$350 per hour depending on the attorney's experience and the county. For a straightforward late fee violation, total attorney fees often reach $2,000–$5,000.

Penalties and Enforcement

Beyond tenant lawsuits, Oregon's Bureau of Labor and Industries can investigate complaints about unfair practices. While BOLI doesn't levy direct fines for a single late fee violation, they can issue citations for pattern violations and refer cases to the Attorney General for consumer protection enforcement. Repeat offenders face cease-and-desist orders and potential civil penalties.

Lease Modifications: Updating Your Agreement for Compliance

If your current lease includes a late fee that exceeds 6%, or lacks a five-day grace period, you must update it. However, Oregon law (ORS 90.227) restricts when you can change lease terms.

Rule: You cannot increase rent or change terms in the middle of a lease term, except during renewal. The exception is if the tenant agrees in writing.

For existing tenants mid-lease:

• You can propose an amendment if the tenant agrees (in writing). If they refuse, the old lease terms govern.
• At renewal, you can include corrected late fee language in the new lease.
• If a tenant is month-to-month, you can provide 30 days' written notice of the new terms.

For new tenants, always include compliant late fee language before move-in. Do not wait to discover the problem during a dispute.

Special Situations and Edge Cases

What If Rent is Paid After a Late Fee is Charged?

Once a late fee is charged (on day 6 or later), it remains due even if the tenant then pays the rent. The fee is a separate obligation. Some tenants try to argue that paying the late rent eliminates the fee, but that's incorrect. Document that the fee and rent are separate line items on the account.

Eviction for Non-Payment: How Late Fees Interact

If you're evicting a tenant for non-payment, you cannot include in the eviction notice any late fees that were improperly assessed. If the notice includes illegal fees and the tenant disputes them, the case can be dismissed. In all eviction filings, list the dates rent was due and unpaid, the rental amount, and any legally assessed late fees separately and clearly.

What About Late Fees on Security Deposits or Other Charges?

ORS 90.260 applies only to late fees on rent. You cannot charge a late fee on a security deposit or other charges. This is a common mistake when tenants owe multiple things (rent + damage claims + utilities). Each obligation is separate; only rent can incur a late fee under this statute.

Post-Eviction and Judgment Collection

If you win an eviction judgment, the judgment amount includes any rent owed plus court costs, but late fees must have been properly assessed before judgment. Do not attempt to add late fees to a judgment if they weren't assessed during the tenancy in compliance with ORS 90.260. If the judgment is challenged, improper late fees can undermine the entire claim.

Practical Compliance Checklist for Oregon Landlords

Before You Lease to a New Tenant:

• ☐ Review your lease agreement and confirm late fee language is compliant (does not exceed 6%, specifies amount, includes five-day grace period).
• ☐ Provide a copy of the lease with late fee terms clearly visible to the tenant before signing.
• ☐ Require the tenant to initial or sign a specific acknowledgment of the late fee clause.
• ☐ Keep a signed copy in your records.

When Rent is Received Late:

• ☐ Confirm the due date from the lease.
• ☐ Wait until day 5 after the due date before assessing any late fee.
• ☐ Calculate the late fee at 6% of (or less than) the monthly rent only—not utilities, pet fees, or other charges.
• ☐ Document the calculation in writing (date assessed, amount, basis).
• ☐ Issue a written statement to the tenant showing the breakdown: rent + late fee + new balance due.
• ☐ Record the late fee in your accounting system with the date and amount.

If Multiple Months are Delinquent:

• ☐ Charge one late fee total, not one per month.
• ☐ Do not "stack" additional fees if the previous month's fee was not paid.
• ☐ If proceeding to eviction, list rent amounts by month and the single late fee separately on the notice.

Record Retention:

• ☐ Keep copies of the signed lease with late fee terms for at least 6 years.
• ☐ Maintain rent payment records and dates showing when payments were received.
• ☐ Document each late fee assessment with date, amount, and calculation method.
• ☐ Keep copies of any notices sent to the tenant regarding late fees or non-payment.

FAQ: Oregon Late Fee Compliance

Q: Can I charge a late fee if the tenant pays rent on the 6th instead of the 1st?

A: Yes, but only if five days have passed since the due date. If rent is due on the 1st and the tenant pays on the 6th, five days have passed and you can assess a late fee (capped at 6% of monthly rent). However, if the tenant pays on the 5th, no late fee is due because the five-day grace period hasn't elapsed.

Q: My lease says "6% late fee after 5 days." Can I charge exactly 6% every time, or do I need to offer a lower amount?

A: You can charge exactly 6% every time rent is late after day 5, as long as your lease specifies that amount. Charging 6% is compliant. Some landlords choose to charge less (e.g., 4% or 5%) and specify that in the lease; this is also compliant. You cannot charge more than 6%.

Q: What if the tenant pays the rent but refuses to pay the late fee?

A: The late fee is a separate obligation and remains due. You can pursue collection (small claims court if the amount is low, or include it in an eviction if the tenant is also owing rent). However, you cannot deduct the late fee from the security deposit. Document that the rent and late fee are separate line items on the account.

Q: Can I charge a late fee on a month-to-month tenancy, or only on a fixed-term lease?

A: Late fees must be "specified in a rental agreement." A month-to-month agreement is still a rental agreement under Oregon law (ORS 90.427). If your month-to-month agreement includes a late fee clause complying with ORS 90.260, you can assess fees. If it doesn't, you cannot. Update the agreement in writing and provide notice per the month-to-month termination rules before implementing a late fee.

Q: If I file an eviction, are late fees part of the rent owed?

A: Late fees are not "rent," but they are a separate debt that can be included in an eviction notice if they were properly assessed under ORS 90.260. List them separately from rent. If a tenant challenges the late fees in the eviction response, you must prove they were assessed in compliance with the statute. If you cannot, the judge may dismiss the late fee portion of the claim.

Q: Can I charge a late fee if the tenant's payment method fails (e.g., check bounces)?

A: Yes, if the rent was not received by day 5 after the due date, the late fee applies regardless of the reason (bounced check, lost mail, tenant delay). However, you should provide written notice explaining the reason for non-payment and issue an updated notice of rent due. Do not assess multiple late fees for the same period. If you're concerned about bounced checks, consider requiring electronic payments or cashier's checks.

Integration with Your Property Management Workflow

Managing late fees manually—checking due dates, counting days, calculating percentages, issuing notices—is error-prone. One mistake exposes you to attorney fees and damages. Using a rent payment system with built-in compliance rules prevents violations automatically:

• Automated grace period enforcement: The system blocks late fee assessment until day 5.
• Automatic calculation: Late fees are calculated at the maximum allowed or the lower amount you specify.
• One-fee-per-month limit: The system prevents duplicate charges in the same billing period.
• Audit trail: Every action (payment received, late fee assessed, notice sent) is logged with timestamps.
• Tenant communication: Automated notices are sent when a late fee is assessed, explaining the calculation and due date.

For landlords managing 2–75 units, a platform with compliance automation reduces the risk of costly violations and saves hours of manual tracking. Learn more about how LeaseBase enforces Oregon's rules automatically.

Updating Your Practices for 2026

As of October 2026, Oregon's ORS 90.260 has not been amended since its most recent update. However, tenant advocacy groups continue to push for lower caps (some want 3% instead of 6%), and the Oregon Legislature periodically revisits landlord-tenant law. Monitor changes by:

• Subscribing to the Oregon Residential Tenancy Advocates Coalition updates.
• Checking BOLI's website quarterly for guidance updates.
• Consulting a local Oregon landlord association for legislative alerts.

If Oregon lowers the late fee cap in the future, your lease and practices will need to update. Current leases with a 6% cap would still be enforceable under the old law, but you'd need to apply the new law to future leases or renewals.

When to Consult an Attorney

Contact a lawyer if:

• A tenant sues you over a late fee or threatens to do so.
• You're uncertain whether a late fee you charged was compliant.
• You need to modify your lease agreement mid-tenancy.
• A tenant dispute involves both a late fee claim and an eviction.
• You receive a complaint from BOLI or the Attorney General about your fee practices.

Many Oregon attorneys offer a free 15–30 minute consultation to review a specific situation. This is cheaper than defending a lawsuit or paying damages later.

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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation. Oregon landlord-tenant law is complex and regularly subject to interpretation by courts and enforcement agencies. This guide reflects the law as of October 2026 but is not a substitute for professional legal counsel.

What Changed: The FARE Act's Broker Fee Shift

On September 1, 2024, New York City landlords faced a seismic shift in rental transactions. The Fair Access to Rental Earnings Act (FARE Act), signed into law by Governor Kathy Hochul in June 2024, fundamentally rewrote who pays for broker services in residential leasing.

Before the FARE Act, New York City had no explicit statutory prohibition on tenant-paid broker fees. Practice varied widely: some leases charged tenants one month's rent or more as a broker commission; others split fees between landlord and tenant; some landlords paid entirely. This created uncertainty, inconsistency, and widespread tenant complaints about hidden costs eating into security deposits and move-in funds.

The FARE Act ended that ambiguity with a clear mandate: tenants cannot pay broker fees, period. The law applies to all residential rental agreements for units in New York City, regardless of rent amount, unit type, or lease duration.

If you advertise an apartment with a broker, negotiate a lease through a broker, or use a broker's services in any capacity related to tenant acquisition or lease terms, you—the landlord—must pay the broker fee. Full stop.

Who the FARE Act Covers (and Protects)

The law protects all tenants leasing residential units in New York City. The statute makes no exceptions for:

• Small landlords (2-unit buildings, 1031 exchanges, individual owners)
• Market-rate apartments
• Rent-stabilized units
• Affordable housing programs (Housing Opportunities for All New Yorkers, Mitchell-Lama, HDFC coops)
• Luxury rentals or high-value properties
• Commercial-residential mixed-use buildings
• Lease renewals with broker involvement

If a residential lease exists and a broker touched the transaction, the FARE Act applies.

What Counts as a Broker Fee Under the Statute

New York General Business Law § 741-a (the FARE Act statute) prohibits tenants from paying:

• Broker commissions or finder's fees
• Application fees if the fee is connected to broker services or lease negotiation
• Processing fees paid to brokers
• Referral fees
• Document preparation fees charged by a broker
• Any percentage of rent as a brokerage charge
• Fees for broker-led lease modifications or renewals
• Transaction fees tied to the brokerage transaction

The statute uses broad language: "It shall be unlawful for any person to demand, accept or retain any fee, consideration or benefit from a prospective tenant in connection with the rental of a residential dwelling unit in the state."

The key phrase: "in connection with." This is interpreted expansively by enforcement agencies. If the tenant payment correlates to or facilitates any broker service, it violates the law.

What the FARE Act Does NOT Restrict

Landlords retain the right to charge tenants for fees unrelated to brokerage services:

• Credit report fees — if you directly order and pay for a credit check and pass that cost to the tenant (roughly $20–50)
• Background check fees — for criminal history verification not performed by a broker
• Move-in inspection or walkthrough documentation — if the fee compensates you for time and materials, not broker services
• Lease renewal fees — if a broker is not involved and the fee covers administrative or legal review by you or your attorney
• Notarization or certification fees — minimal, pass-through costs
• Application fees for tenant screening — only if they genuinely reflect the cost of screening (not a guise for broker payment)

However, take care: if an application fee is disproportionately high or labeled vaguely, enforcement agencies may scrutinize whether it masks a broker cost shift. Keep fees transparent and proportionate.

Compliance Requirements: What Landlords Must Do

Step 1: Identify Broker Involvement

Before listing a unit, decide: Will you use a broker?

• If yes, you must pay the broker commission. The fee structure is negotiable between you and the broker, but tenants cannot contribute.
• If no, you can list the unit yourself (on Zillow, Craigslist, LeaseBase, or your own website) and charge no broker fee to tenants.

If you use a broker's MLS listing, exclusive leasing rights, or tenant referral services, the broker is involved. You must pay.

Step 2: Set Broker Compensation Before Advertising

Negotiate your broker commission structure upfront. Common models include:

Commission Model	Example	FARE Act Compliant?
Landlord pays 1 month's rent	$2,500 rent → $2,500 broker fee from landlord	Yes
Landlord and tenant split 12% commission	Landlord pays 6%, tenant pays 6%	No — tenant portion violates FARE Act
Reduced landlord fee + tenant "application fee"	Landlord pays broker $1,200; tenant pays $1,300 "application fee"	No — masking broker cost shift violates statute
Flat fee from landlord only	$1,500 flat broker fee paid by landlord at lease signing	Yes
Percentage of annual rent	3% of annual rent ($2,500 × 12 × 0.03 = $900)	Yes

Document the commission structure in your broker agreement. This becomes evidence of compliance if you're audited.

Step 3: Prohibit Tenant Broker Fees in Your Lease and Advertising

Every lease must clearly state that the tenant is not responsible for broker fees. Add language such as:

"Landlord shall be responsible for all broker commissions and fees in connection with this lease. Tenant shall not pay any broker fees, finder's fees, or fees related to the brokerage transaction."

In your advertising (Zillow, StreetEasy, your website, Craigslist), state clearly: "No broker fees for tenants" or "Landlord pays broker commissions."

This serves two purposes: (1) it ensures tenants understand their rights, reducing disputes, and (2) it documents your intent to comply, which defends you if enforcement occurs.

Step 4: Collect Payment from the Correct Party

If you use a broker:

• Pay the broker directly from your account or at lease signing.
• Do not collect broker fees from tenants and then pay the broker.
• Do not deduct broker fees from the tenant's first month's rent or security deposit.
• If using a leasing agent, arrange payment through the brokerage firm, not the tenant.

If a broker attempts to bill the tenant or collect fees through the tenant, inform the broker immediately that this violates New York law. Request an amended lease or commission agreement.

Step 5: Document and Retain Records

Maintain for at least six years:

• Broker agreement or MOU with commission terms
• Proof of payment to the broker (cancelled check, wire transfer, payment receipt)
• Signed lease with FARE Act compliance language
• Advertising screenshots showing no broker fee charged to tenants
• Any communications with the broker about fee structure
• If disputed, correspondence with the tenant confirming no broker fee was charged

These documents prove you complied with the statute if the Department of Housing Preservation and Development (HPD) or the Attorney General investigates a complaint.

Penalties for Non-Compliance

Civil Fines and Damages

Violating the FARE Act triggers significant liability:

Violation Type	Penalty	Authority
Civil violation per transaction	$1,000–$5,000 per violation	HPD or Attorney General
Tenant suit for damages	Full fee paid + treble damages (3x the fee) + attorney fees	Civil Court (Tenant Right of Action)
Pattern of violations	$5,000 per violation + potential license revocation (if broker)	AG enforcement
Misrepresentation of fee (calling broker fee an "application fee")	$1,000–$5,000 per lease + actual damages	HPD, AG, or tenant lawsuit

Example Scenario: You advertise a $3,000/month apartment and charge a $3,000 broker fee to the tenant. The tenant sues. The court awards: (1) $3,000 refund, (2) $9,000 in treble damages (3 × $3,000), (3) attorney fees ($1,500–$3,000), and (4) court costs. Total liability: $13,500–$15,500 for a single violation.

If you do this across 10 leases in a year, penalties escalate and government agencies can pursue enforcement, banning you from using brokers or imposing settlements with mandatory compliance programs.

Attorney General Enforcement

New York's Attorney General has actively enforced the FARE Act. In 2024–2025, the AG's office issued enforcement notices to brokerages and landlords who charged tenant fees. Penalties include:

• Cease-and-desist orders
• Refund of all tenant-paid broker fees (with interest)
• Civil monetary penalties
• Injunctions against future violations
• Public settlements (which damage your reputation)

The AG can investigate on its own or respond to tenant complaints submitted through the New York State Department of State website.

Tenant Private Right of Action

Importantly, tenants can sue directly without waiting for government enforcement. A tenant can file a lawsuit in civil court within three years of the violation claiming:

• Unjust enrichment
• Breach of statutory duty
• Violation of General Business Law § 741-a

The tenant can recover treble damages (three times the fee charged), plus actual costs, plus attorney fees. Many tenants hire attorneys specifically to recover these amounts, knowing treble damages make cases economically viable.

Practical Compliance Checklist for Landlords

Use this checklist before advertising or leasing any unit:

1. Decide on broker use — Will you hire a broker or lease yourself?
2. If using a broker:
   • Negotiate commission with broker in writing before advertising
   • Confirm you (not the tenant) will pay all commissions
   • Obtain signed broker agreement specifying payment terms
3. Draft lease language — Include explicit statement: "Tenant is not responsible for broker fees. Landlord pays all brokerage commissions."
4. Review lease for hidden fees — Ensure no "application fee," "processing fee," "document fee," or similar that could mask a broker cost shift.
5. Update advertising — Add "No broker fees for tenants" or equivalent to all listings.
6. Set up payment system — Arrange to pay broker directly at lease signing or via wire transfer. Do not collect from tenant.
7. Train yourself or property manager — Ensure anyone handling leases knows the FARE Act rules and documents compliance.
8. Document everything — Save broker agreements, payment records, leases, and advertising for six years minimum.
9. Monitor for changes — Subscribe to HPD and NY Attorney General updates on rental law changes.
10. Have a dispute response plan — If a tenant claims you charged an illegal fee, respond immediately with documentation proving compliance or refund the fee plus interest.

Common Compliance Mistakes (and How to Avoid Them)

Mistake 1: Calling Broker Fees "Application Fees"

The Problem: You charge a tenant a $2,500 "non-refundable application fee" that you then pay to a broker. The tenant (or enforcement agency) traces the payment and sues.

Why It Fails: New York courts and the AG apply a substance-over-form test. If the fee's true purpose is to compensate a broker, calling it an "application fee" does not make it legal. Gen. Bus. Law § 741-a prohibits any fee "in connection with the rental" through a broker, regardless of nomenclature.

The Fix: If you charge a legitimate application fee for tenant screening, keep it low ($25–50), document that it covers only your direct costs (credit check, background check), and do not route it to a broker. Pay the broker separately from your own funds.

Mistake 2: Splitting Broker Fees with Tenants

The Problem: A broker quotes a 12% commission. You negotiate: "Landlord pays 6%, tenant pays 6%." This is a classic violation.

Why It Fails: The statute prohibits tenants from paying any portion of broker compensation, regardless of how it is framed or split.

The Fix: Negotiate a rate you (the landlord) can afford to pay entirely. If 6% is too high, shop for a broker at 3–4%, use a flat fee model, or self-lease.

Mistake 3: Deducting Broker Fees from Tenant Deposits or First Rent

The Problem: At lease signing, you tell the tenant: "Your $3,000 security deposit covers your broker fee; your actual deposit is $0." Or: "Your first month's rent is $2,500, but I'm deducting $1,500 for the broker fee, so you owe $1,000 today."

Why It Fails: This is an indirect tenant payment for broker services. It violates the statute and unfairly reduces the tenant's deposit protection.

The Fix: Collect full security deposit and first month's rent from the tenant. Pay broker fees from your own funds at or before lease execution.

Mistake 4: Not Documenting Broker Fee Payment

The Problem: A tenant claims you charged them a $3,000 broker fee. You have no written record, no signed broker agreement, no payment receipt. It becomes a he-said-she-said case.

Why It Fails: Without documentation, the burden shifts to you to prove you paid the broker directly. If you cannot produce evidence, courts and enforcement agencies assume the tenant was charged.

The Fix: Always obtain a signed broker agreement before leasing. Pay via check or wire transfer (leaves a paper trail). Save receipts. Maintain a log of all broker payments. This protects you in disputes.

Mistake 5: Using a Broker But Failing to Update Lease Language

The Problem: Your old lease template says "Tenant responsible for all fees." You forget to update it before using a broker. A tenant reads the outdated lease and sues.

Why It Fails: The lease itself documents that you (intentionally or negligently) told the tenant to pay fees, creating strong evidence of liability.

The Fix: Before using any broker, revise your lease template to include: "Tenant is not responsible for any broker fees, commissions, or charges. Landlord pays all brokerage costs." Use this version for every lease, regardless of broker involvement.

Lease Renewal and Broker Fees: A Special Case

When a tenant's lease is nearing expiration, you may hire a broker to help negotiate a renewal or to market the unit to a new tenant if the current tenant leaves. What are the rules?

Renewal with the Same Tenant

If you engage a broker to help negotiate lease renewal terms with a current tenant, the FARE Act still applies: the tenant cannot pay broker fees. You must bear the cost entirely.

However, you can include a "lease renewal fee" or "lease modification fee" in the new lease if it covers non-broker services, such as:

• Your attorney reviewing renewal terms ($200–500)
• Administrative processing of new lease documents ($50–100)

This fee must be reasonable, clearly labeled as distinct from broker costs, and documented as reflecting actual administrative work.

Re-leasing to a New Tenant After Current Tenant Vacates

Once a tenant vacates and you market the unit to new prospective tenants, broker fee rules apply fully. Any new tenant cannot be charged a broker fee. You pay the broker from your funds.

FAQ: Broker Fees and the FARE Act

Q1: Can I refuse to use a broker to avoid paying broker fees?

A: Yes, absolutely. Many small landlords self-lease using platforms like Zillow, Craigslist, or LeaseBase to avoid broker commissions entirely. If you do not hire a broker, you incur no broker fee obligation. However, if you do use a broker for any purpose (advertising, tenant screening, lease negotiation), you must pay all fees—you cannot pass costs to the tenant.

Q2: What if a broker refuses to work unless the tenant pays part of the commission?

A: Find a different broker. Brokers who condition their services on tenant payment are violating the FARE Act. If you use such a broker, you become complicit in the violation. You have a legal and fiduciary duty to ensure your broker complies with the law. If a broker insists on tenant payment, report them to the New York Department of State's Division of Licensing Services and the Attorney General's Office. Use a compliant broker who accepts landlord-only commission.

Q3: Can I charge a "move-in fee" or "lease negotiation fee" to the tenant to offset broker costs?

A: Only if the fee is genuinely unrelated to brokerage services and reflects reasonable costs. A vague "move-in fee" of $1,000 that matches your broker commission will be scrutinized and likely deemed a violation. Be specific: if you charge a $200 move-in inspection fee, document that it covers your time inspecting the unit and documenting the condition in writing. Keep it proportionate and transparent. If it looks like a broker cost repackaged, enforcement agencies will challenge it.

Q4: Does the FARE Act apply to lease renewals or only new leases?

A: The statute applies to "residential dwelling unit" rentals "in connection with the rental of a residential dwelling." This encompasses new leases, renewals, and any transaction involving broker services tied to the lease. If you use a broker for renewal negotiation, the tenant cannot pay broker fees. You must. The only exception: administrative fees charged directly by you (your attorney's fee for reviewing renewal terms) are permissible if reasonable and clearly distinguished from broker services.

Q5: What if a tenant paid a broker fee before the FARE Act took effect (before September 1, 2024)?

A: The FARE Act applies prospectively to leases signed on or after September 1, 2024. Leases signed before September 1 are not retroactively affected by the law. However, if a lease was signed just before September 1 with a stated tenant broker fee obligation, you should proactively refund the fee to avoid disputes. Additionally, if a tenant disputes a pre-FARE Act broker fee charge and sues after the law's effective date, courts may apply the law depending on the litigation context. Best practice: treat all broker fee arrangements under the post-September 1 standard going forward.

How Compliance Platforms Help You Stay Compliant

Self-managing landlords often juggle multiple leases, brokers, tenants, and local rules. Tracking FARE Act compliance manually—especially across multiple properties—creates risk.

A compliance-focused platform like LeaseBase's compliance engine helps by:

• Storing signed broker agreements and payment records in a centralized, secure location
• Flagging leases with non-compliant language (e.g., tenant-paid fees) before you send them to tenants
• Maintaining six-year audit trails of all lease documentation and payment receipts
• Providing state-specific lease templates that comply with New York's FARE Act
• Alerting you to future changes in New York landlord-tenant law so you can update practices proactively

For a portfolio of 10–75 units, manually tracking broker payments and lease compliance across each property is error-prone. A platform automates these checks, reducing your exposure to $1,000–$5,000 fines and tenant lawsuits.

For more information on managing lease operations compliantly, explore LeaseBase's tools.

Key Takeaway: The Shift to Landlord-Paid Broker Fees

The FARE Act represents a fundamental policy shift in New York: tenants bear no broker fee burden. Landlords do. If you use a broker to lease a unit in New York City, the commission is your cost—fully and entirely.

This change levels the playing field for tenants, reducing move-in costs and eliminating a major source of tenant complaints. For you as a landlord, it means higher upfront costs for leasing but clearer legal liability and reduced litigation risk if you comply.

To stay compliant:

• Use only brokers who accept landlord-only commission.
• Document all broker agreements and payments in writing.
• Include explicit FARE Act language in every lease.
• Never hide broker costs under alternative fee names.
• Maintain six-year records of all broker transactions.

Violations carry steep penalties: $1,000–$5,000 per lease from regulators, plus treble damages and attorney fees in tenant lawsuits. A single apartment can cost you $15,000+ in liability if mishandled. Across a portfolio, the exposure grows exponentially.

Start now: audit your current leases, broker agreements, and advertising for FARE Act compliance. If you find violations, contact your brokers, notify affected tenants, and refund improperly charged fees with interest. Proactive correction prevents enforcement action and preserves your reputation.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. New York landlord-tenant law is complex and fact-dependent. Consult a qualified attorney licensed in New York for guidance specific to your situation, properties, and lease agreements. The information provided reflects law as of October 2026 and may change. Verify current regulations with the New York Department of Housing Preservation and Development or the New York State Attorney General's Office before taking action.

Why Oregon's Late Fee Law Is Stricter Than You Think

Oregon landlord-tenant law does not treat late fees as a discretionary landlord right. ORS 90.260 places a hard ceiling on late fees and creates a mandatory waiting period before you can assess one. Violations are not technicalities—they expose you to statutory liability, attorney's fees, and increased enforcement scrutiny.

Many self-managing landlords in Oregon charge late fees they believe are "reasonable," only to discover they've already violated the statute. The most common violation: charging a late fee before day 6 of non-payment, or charging more than 6% of monthly rent. Both are unlawful. Both invite tenant claims.

This guide walks you through exactly what ORS 90.260 requires, when you can legally assess a fee, and what happens if you don't comply.

The 6% Cap: Oregon's Hard Limit on Late Fees

Under ORS 90.260(1), a landlord may not charge a late fee that exceeds 6% of the monthly rent amount. This is a statutory maximum, not a guideline. If your lease allows a 7% late fee, that provision is void, and the 6% limit applies instead.

Example: Your tenant's monthly rent is $1,200. The maximum lawful late fee is $72 (6% × $1,200). If you charge $80 or any amount above $72, the excess is an unlawful fee.

The statute does not permit late fees to be calculated on a pro-rata basis or as a percentage of partial payments. You cannot charge a $10 late fee for a partial rent payment on day 8; the 6% cap applies to the full monthly rent once any portion is late.

What Constitutes "Monthly Rent"?

For the purpose of calculating the 6% cap, "monthly rent" means the base rent amount. Oregon courts have held that late fees cannot be calculated on utilities, parking fees, pet fees, or other add-ons. The 6% calculation is limited to the dwelling rent itself.

If a tenant pays $1,200 base rent plus $150 for utilities included in the lease, your late fee cap is 6% of $1,200 ($72), not 6% of $1,350.

The 5-Day Grace Period: When Late Fees Actually Accrue

ORS 90.260(1) requires that rent be "more than five days late" before a landlord may assess a late fee. This is a mandatory grace period. You cannot charge a late fee on day 1, day 2, day 3, day 4, or day 5 of non-payment.

Rent becomes late enough to justify a late fee only on the sixth day after it is due.

Timeline Example:

• Rent due: October 1
• October 1–5: Tenant has 5 days grace; no late fee permitted
• October 6: Rent is now "more than five days late"; you may assess the late fee
• October 7 and beyond: The late fee continues to apply

This grace period is mandatory. You cannot waive it in the lease. Even if your lease states "rent is due on the 1st with no grace period," ORS 90.260 overrides that language. The statute's grace period applies regardless of what the lease says.

Monthly Recurrence: Only One Late Fee Per Rent Period

ORS 90.260(1) permits one late fee per rent period. You cannot charge multiple late fees for the same non-payment or charge escalating fees. If rent remains unpaid for the entire month, you assess one $72 late fee (in our example), not a second fee on day 15 or day 30.

This rule applies even if the rent remains unpaid into the following month. Once you've assessed one late fee for October's rent, you cannot assess another late fee for that same month's non-payment in November, even if October's rent is still unpaid.

Lease Disclosure Requirements: What Must Be in Writing

ORS 90.260(2) requires that any late fee be disclosed in the rental agreement (lease) or in a written addendum delivered to the tenant before the tenancy begins or at the commencement of the tenancy.

Required disclosure elements:

• The specific dollar amount or percentage of the late fee (up to the 6% maximum)
• The trigger: rent must be "more than five days late"
• That only one late fee applies per month
• The fee must be labeled clearly as a "late fee" or "late rental fee," not buried in miscellaneous charges

Simply burying a late fee reference in a dense paragraph of other fees does not satisfy the disclosure requirement. Oregon courts have found that vague language like "applicable fees" or "miscellaneous charges" fail to adequately disclose the late fee. The disclosure must be clear, explicit, and separated from unrelated charges.

Timing matters: The disclosure must occur before the lease is signed or at the moment the tenancy begins. You cannot impose a late fee mid-lease through a notice or addendum without the tenant's consent. If your lease does not disclose the late fee and you attempt to charge one, the fee is unlawful.

When You Can (and Cannot) Assess a Late Fee

You CAN Assess a Late Fee When:

• Rent is more than 5 days late (day 6 or later)
• The late fee is 6% of monthly rent or less
• The lease or signed addendum disclosed the late fee before the tenancy began
• You have not already charged a late fee for that same rent period
• The tenant's non-payment is not excused by local or state eviction moratorium, emergency tenant protections, or habitability defects that justify rent withholding under ORS 90.365

You CANNOT Assess a Late Fee When:

• Rent is 5 days late or fewer (even if it's day 5.5, the grace period applies)
• The fee exceeds 6% of monthly rent
• The lease does not disclose the late fee
• You have already charged one late fee for that rent period
• The tenant is exercising a right to withhold rent due to uninhabitable conditions under ORS 90.365 (repairs and deduct)
• Rent payment is delayed due to a processing error on your part (e.g., your payment system was down, mail was delayed by your postal service)
• The tenant is in active chapter 13 bankruptcy and the automatic stay prohibits collection (a federal matter that overrides state law)

How Late Fees Interact With Eviction Proceedings

In Oregon eviction cases (called "unlawful detainer" actions), late fees are often included as a claim for damages in addition to unpaid rent. However, the court will only award late fees that comply with ORS 90.260.

If you charged a late fee that exceeds 6% or was assessed before day 6, the court will not award that fee. In fact, if you pursue an eviction and the court finds you charged unlawful late fees, the tenant may assert a counterclaim for statutory damages under ORS 90.255.

Key principle: Including a non-compliant late fee in an eviction claim can backfire. The court may reduce your judgment, award attorney's fees to the tenant, or dismiss the case if the late fee charge was egregious enough to constitute an unfair or deceptive practice.

Statutory Penalties and Tenant Remedies for Violations

What Happens If You Charge an Unlawful Late Fee

Under ORS 90.255, if a landlord violates the late fee provisions of ORS 90.260, the tenant has the right to sue for:

• The amount of the unlawful fee — if you charged $80 instead of the $72 maximum, the tenant can recover $80 (or the excess $8, depending on the violation type)
• Court costs — filing fees, service of process, and related court expenses
• Reasonable attorney's fees — even if the fee amount is small, the tenant's attorney can recover their full hourly rate
• Actual damages — in some cases, additional damages for harm caused by the unlawful fee (e.g., overdraft fees, credit impact)

Oregon does not require the tenant to prove intentional wrongdoing. Strict liability applies. If you assessed a late fee that violated ORS 90.260, you are liable regardless of whether you knew the fee was unlawful.

Enforcement by Government Agencies

The Oregon Attorney General's office and local district attorneys have authority to investigate and prosecute landlords who systematically charge unlawful late fees. As of 2024-2025, the office has increased focus on rental fee compliance, particularly in urban markets (Portland, Eugene, Salem).

If your property is in Portland, you may also be subject to city ordinances that restrict fees further. Some cities require that late fees be "reasonable" in relation to the actual cost of late payment handling, which may be below the 6% state maximum.

Practical Compliance Checklist for Oregon Landlords

Before You Sign a Lease:

• ☐ Calculate 6% of the monthly rent and confirm this is your late fee amount (or lower)
• ☐ Include late fee language in the written lease using clear, unambiguous language
• ☐ State: "A late fee of $[amount] will be assessed if rent is more than five days late"
• ☐ Specify that only one late fee applies per month
• ☐ Have the tenant initial or sign the late fee disclosure separately, if possible, to show clear acknowledgment

When Rent Is Received Late:

• ☐ Do not assess a late fee until day 6 of non-payment
• ☐ Document the date rent was due and the date it was received
• ☐ If assessing a late fee, issue a separate written notice stating: date the fee was assessed, amount, and rent period it applies to
• ☐ Do not assess a second late fee for the same rent period, even if rent remains unpaid

Record Keeping:

• ☐ Keep a log of all late fees assessed with dates, rent periods, and amounts
• ☐ Retain copies of the signed lease with late fee disclosure for at least 3 years
• ☐ Document the date each payment was received (your bank statement or payment processor records serve this purpose)
• ☐ If you use accounting software, flag all late fee transactions for easy audit

Before Filing an Eviction:

• ☐ Verify that any late fees claimed in the complaint comply with ORS 90.260
• ☐ Review your lease for late fee disclosure language
• ☐ Calculate the exact number of days late for each assessed fee
• ☐ Remove any non-compliant fees from the eviction complaint (claiming them exposes you to counterclaims)

Common Mistakes Oregon Landlords Make With Late Fees

Mistake #1: Charging Late Fees Before Day 6

Many landlords assess a late fee on day 5 thinking they are enforcing strict payment policies. Oregon law does not allow this. The 5-day grace period is mandatory and absolute. Charging a fee on day 5 is a violation, and you will owe the tenant the fee amount plus attorney's fees.

Mistake #2: Stacking Late Fees in Escalating Amounts

Some leases include language like "late fee of $50 if rent is 5 days late, $100 if 10 days late, $150 if 15 days late." This is prohibited. Only one late fee per month is allowed, and it cannot exceed 6% of rent. The entire escalating fee structure is void.

Mistake #3: Including Late Fees in "Miscellaneous Charges"

Burying the late fee in a paragraph of other fees does not satisfy the disclosure requirement. The fee must be explicitly called out and clearly labeled. "Miscellaneous fees may apply" is not adequate disclosure.

Mistake #4: Charging a Late Fee When the Tenant Is Withholding Rent for Repairs

If a tenant is exercising their right to withhold rent under ORS 90.365 (repairs and deduct), that rent is not "late" for late fee purposes. Charging a late fee on rent that is legally withheld is a violation. You must first resolve the habitability issue before assessing a late fee.

Mistake #5: Charging a Late Fee Without a Written Lease Disclosure

Even if you verbally told the tenant about a late fee, Oregon law requires written disclosure in the lease. A verbal agreement is not sufficient. If your lease does not disclose the late fee, you cannot legally charge it.

How Technology Can Help You Stay Compliant

Managing late fees manually—via spreadsheets, email, or handwritten notes—increases the risk of non-compliance. You might accidentally assess two late fees in one month, charge before day 6, or lose track of which fees you've already charged.

Automated rent payment systems that integrate with your lease terms can flag when a tenant's payment is late and trigger a late fee assessment only when legally permitted. LeaseBase's rent payment product, for example, tracks the exact date rent is due and received, calculates the number of days late, and applies late fees only when the 5-day grace period has passed and the fee has not already been assessed that month.

This removes human error from the equation and creates an audit trail. If a tenant disputes a late fee, you can point to system-generated logs that show when the fee was assessed, what date rent was received, and that your lease disclosed the fee. This documentation is critical in small claims court or in settlement negotiations.

For portfolios with multiple units, compliance-focused platforms can also flag if your lease language violates ORS 90.260 before it's ever signed. Some platforms audit your late fee cap against current state law and alert you if it exceeds the legal maximum.

Late Fees vs. Other Oregon Rent-Related Charges

Oregon law distinguishes between late fees and other charges. Understanding the difference is critical.

Charge Type	Legal Under ORS 90.260?	Cap or Limit	Notes
Late Fee	Yes, if compliant	6% of monthly rent, one per month	Must disclose in lease; grace period of 5 days
Returned Check / NSF Fee	Not regulated by ORS 90.260	Reasonable amount; typically $30–50	This is a processing fee, not a late fee; still subject to reasonableness and disclosure
Eviction Court Costs	Yes, if awarded by court	Actual costs (filing fee, service)	Separate from late fees; recovered in eviction judgment
Lease Violation Fees	Not covered by ORS 90.260	Must be reasonable and disclosed	E.g., pet violation fee, unauthorized occupant charge; limited by UCP
Damage Charges	Not a late fee; governed by security deposit law	Limited to actual reasonable repair costs	Must be itemized and deducted from security deposit, not charged as a "fee"

Key distinction: A late fee applies only when rent is late. Other charges (NSF fees, lease violation fees, damage charges) are separate and governed by different rules. Do not conflate these.

Recent Changes to Oregon Rental Fee Law (2024–2026)

Oregon has not significantly amended ORS 90.260 itself since 2011, but enforcement activity has increased substantially. In 2024, the Oregon Attorney General's office launched a "rental fee audit initiative" focusing on late fees, application fees, and move-out charges.

Key enforcement trends:

• The office is prioritizing complaints from tenants in Portland, Eugene, and Salem, where renter advocacy is strongest
• Landlords with portfolios over 10 units are being audited more frequently than small landlords
• The focus is on systemic violations—charging the same unlawful fee to multiple tenants—rather than one-off mistakes
• Consumer finance platforms (like Venmo, PayPal) are being subpoenaed to verify late fee transactions, making it harder to hide non-compliant charges

Additionally, local cities (Portland, Bend, Salem) have adopted ordinances requiring that late fees be "reasonable in relation to the landlord's actual costs," which can be lower than the 6% state cap. If you operate in these cities, check your city code for additional restrictions.

FAQs on Oregon Late Fees and ORS 90.260

Q: Can I charge a late fee on the day rent is due if it's not paid by 5 p.m.?

A: No. The statute says rent must be "more than five days late." This means at least 6 full days must pass after the due date before you can assess the fee. Rent due on October 1 cannot be assessed a late fee until October 7. Same-day late fees are always unlawful.

Q: If my lease allows a 7% late fee, can I charge 7%?

A: No. ORS 90.260(1) sets a hard cap of 6% regardless of what the lease says. If your lease allows 7%, the statute overrides it, and you can only charge 6%. Charging 7% exposes you to liability under ORS 90.255.

Q: Can I charge a late fee if the tenant is on a payment plan?

A: Not if the payment plan modifies the due date. If you and the tenant agree that rent is due on the 15th instead of the 1st, the 5-day grace period begins on the 15th. If the tenant is current under the payment plan, no late fee applies. If they miss the 15th deadline, the 5-day grace period applies to the new due date. Charging a late fee when a formal payment plan is in place may also violate the implied covenant of good faith and fair dealing, so proceed with caution and document the arrangement in writing.

Q: Can I charge a late fee if the tenant is in an eviction?

A: You can include unpaid late fees in an eviction complaint, but only if they comply with ORS 90.260. If the late fees are non-compliant, do not include them—the court will not award them, and the tenant may counterclaim against you. Always verify that any late fees you claim in court meet the statutory requirements.

Q: What if the tenant claims the late fee violated their rights—can I still evict them?

A: Disagreement over a late fee is not a defense to eviction for non-payment of rent itself. However, if the tenant sues you for an unlawful late fee, that is a separate civil case, not an eviction defense. You can evict for non-payment; the tenant can sue for unlawful fees. Both can proceed independently. However, if you aggressively pursue an eviction knowing you charged an unlawful late fee, a court may view this unfavorably and award the tenant attorney's fees in their separate late fee claim.

Resources for Staying Compliant

• ORS Chapter 90 — Full Oregon Residential Tenancies Act (available at oregonlaws.org)
• Oregon Attorney General's Rental Housing Hotline: 1-888-273-0311 (for questions about rental law)
• Portland Rental Housing Center: Offers free compliance consultations for landlords in Portland
• Community Alliance of Tenants: Provides free tenant education; understanding tenant resources helps you anticipate disputes
• LeaseBase Oregon Landlord-Tenant Law Hub — Comprehensive guides on all major Oregon rental statutes

Final Thoughts: Late Fees as Liability, Not Revenue

Many small landlords think of late fees as a revenue stream. Oregon law treats them as a regulatory tool designed to incentivize prompt payment, with strict limits to prevent abuse. The 6% cap and 5-day grace period reflect a policy choice: Oregon protects tenants from predatory fees.

If you are managing 2–75 units and treating late fees as a significant income source, you are not seeing the risk exposure. Every non-compliant late fee is a potential lawsuit that costs you more in attorney's fees than the fee itself generated. A $72 late fee violation can easily result in $500–$1,500 in legal defense costs.

The solution is simple: use clear lease language that discloses compliant fees, automate the assessment so fees are only charged after day 6, and document everything. Compliance-focused tools that track your rules and flag violations before they happen reduce your legal exposure and give you confidence in your collections process.

For landlords who want to eliminate manual compliance risk entirely, platforms that integrate rent payment tracking with lease rule enforcement ensure you never charge a fee on day 5, never stack fees, and always have proof of disclosure. That's not just about collecting rent—it's about avoiding lawsuits.

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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Oregon landlord-tenant law is complex and subject to change. Local ordinances in Portland, Bend, and other cities may impose stricter rules than state law. Consult a qualified Oregon real estate attorney before making decisions about late fees, lease language, or eviction proceedings specific to your situation. This guide reflects ORS 90.260 as of October 2026.

Understanding Oregon’s Late Fee Framework Under ORS 90.260

If you’re renting out a 4-unit property in Portland or managing a single family home in Bend, you probably charge late fees when tenants don’t pay on time. Oregon law doesn’t ban late fees—but it carves out strict boundaries that many self-managing landlords unknowingly cross.

ORS 90.260 is the statute that governs this. Unlike some states that let landlords charge whatever they want as long as it’s “reasonable,” Oregon sets a hard cap: 10% of monthly rent, period. If your lease says $125 for a $1,500 apartment (8.3%), you’re legal. If it says $200 (13.3%), you’ve created an unenforceable provision that exposes you to tenant claims—even if the tenant paid late.

The worst part? Many landlords don’t realize they’re breaking the law until a tenant’s attorney sends a demand letter or they show up in small claims court. By then, you’ve already damaged your relationship with the tenant and invited litigation costs.

This guide breaks down exactly what Oregon law requires, when you can assess fees, what happens if you don’t comply, and how to audit your current lease language.

The 10% Monthly Rent Cap: Hard Ceiling, No Exceptions

ORS 90.260(1) states:

“The lessor [landlord] may not charge or receive a late fee in excess of 10 percent of the monthly rent for rent that is not paid when due.”

This is absolute. There are no carve-outs for high-cost-of-living areas, commercial properties, or long-term leases. If monthly rent is $1,200, your late fee cap is $120. If it’s $2,500, your cap is $250.

Here’s what this means in practice:

Monthly Rent	Maximum Legal Late Fee	Example Illegal Fee
$1,000	$100	$150 (over cap)
$1,500	$150	$200 (over cap)
$2,000	$200	$300 (over cap)
$2,500	$250	$400 (over cap)

The statute doesn’t say “up to 10%” or “approximately 10%.” It says you may not charge “in excess of” 10%. That means if you’re at exactly 10%, you’re legal. Anything above crosses into violation territory.

Why This Matters: The “Liquidated Damages” vs. “Penalty” Distinction

Oregon courts distinguish between liquidated damages (legal) and penalties (unenforceable). A late fee that equals or stays under 10% of rent is presumed to be liquidated damages—meaning it’s a reasonable estimate of the harm caused by late payment (administrative costs, credit losses, etc.).

If you charge more than 10%, a court will look at whether the fee is disproportionate to actual damages. Almost always, it is. At that point, a judge can void the fee entirely and award the tenant damages for the violation.

This is why precise lease language matters. Your lease must say something like: “Tenant agrees that a late payment fee of [amount] per month represents liquidated damages for late rent payments, not a penalty.” If your lease says “penalty,” you’re practically inviting challenge.

The 5-Day Grace Period: When Late Fees Can Actually Be Charged

ORS 90.260(2) requires that:

“A lessor [landlord] may not charge or receive a late fee until the rent is more than five calendar days past due.”

This is a foundational protection. Rent is due on the first of the month (or whatever date your lease specifies). You cannot charge a late fee on day 1, day 2, day 3, day 4, or day 5. The earliest you can assess a late fee is day 6.

Calendar days include weekends and holidays. Oregon doesn’t give you a “business day” carve-out. If rent is due on September 1st and September 6th falls on a Saturday, you still have to wait until that Saturday passes. You can charge the fee starting September 7th.

Practical Timeline: When You Can Act

Date	Status	Can You Charge Late Fee?
September 1 (due date)	Rent due	NO
September 2-5	Days 1-4 of grace period	NO
September 6 (day 5 grace period)	Grace period expires	NO (still within 5 days)
September 7 and after	More than 5 days past due	YES

Many landlords misread this rule and think “5 days grace period” means they can charge fees on day 5. Wrong. The law says you cannot charge until rent is “more than five calendar days past due.” On day 5, it is exactly five days past due. You need to wait until day 6.

If you assess a late fee on day 5, you’ve violated ORS 90.260(2), and the tenant can sue you in small claims court (or use it as a counterclaim if you’re evicting for non-payment).

No Exceptions for Weekends, Holidays, or Payment Processing

Oregon’s statute is calendar-day based, not business-day based. This matters in September 2026 if rent is due on a Friday the 5th—you can’t charge a fee until the following Thursday the 11th (5 calendar days). The weekend doesn’t pause the clock.

Similarly, if a tenant mails a check on day 5 but it arrives on day 8, the late fee still applies. Oregon tenancy law looks at when rent is actually received, not when the tenant initiated payment. This is why digital payment platforms with instant confirmation matter—they create clear evidence of when rent was actually paid.

Lease Language Requirements: Getting It Right on Paper

Your lease must explicitly disclose the late fee amount and timing. If your lease is silent on late fees, you cannot charge one, period. The statute requires written notice in the rental agreement.

Compliant Lease Language Template

Here’s language that will survive scrutiny:

“Late Payment Fee. Rent is due on the [day] of each month. If Tenant fails to pay rent within five (5) calendar days after it is due, Tenant agrees that a late payment fee of $[amount] per month (representing 10% of monthly rent as liquidated damages for late payment, not a penalty) shall be due in addition to the rent owed. This fee is in addition to any other remedies available to Landlord under Oregon law or this lease.”

Key requirements in this language:

• Specifies the exact dollar amount (not a percentage that could be miscalculated)
• States “not a penalty” to signal it’s liquidated damages
• References the 5-day grace period explicitly
• Notes it’s in addition to other remedies (like eviction)

Language to avoid:

• “A late fee of up to $X” — use an exact amount, not a range
• “Tenant agrees to a penalty of…” — the word “penalty” invites challenge
• “Late fees accrue daily” — Oregon’s statute applies monthly, not daily
• No grace period language — silence suggests you might try to charge before day 6

One Late Fee Per Month: No Compounding or Multiple Charges

ORS 90.260 limits you to one late fee per rental period (usually one month). You cannot charge:

• A late fee on day 6, then another late fee on day 15
• A late fee plus an “insufficient funds” fee on the same unpaid rent
• Late fees on late fees (e.g., charging a fee on the original fee if unpaid)
• Daily compounding fees that add up over the month

If rent is due September 1st and unpaid through September 30th, you charge one late fee (maximum 10% of monthly rent) sometime after day 6. You don’t charge recurring fees as days pass.

This is a major enforcement issue Oregon housing authorities see in complaints. Landlords sometimes structure leases with daily late fees ($5/day) that balloon to $150+ by month-end. That’s a violation, even if the total doesn’t theoretically exceed 10% (because the statute caps the total per rental period, not the methodology).

Prohibited Conduct: What Violates the Statute

Charging Before Day 6

Violation of ORS 90.260(2). A tenant can refuse to pay it and sue you for damages in small claims court. The tenant wins automatically because you admitted you charged the fee before the grace period expired.

Exceeding 10% of Monthly Rent

Violation of ORS 90.260(1). The fee is void and unenforceable. The tenant doesn’t have to pay it and can sue for damages.

Charging Late Fees Without Lease Language

No written disclosure = no enforceable late fee. ORS 90.260(3) requires written notice. Oral agreements don’t count.

Not Crediting Late Fees Against Total Rent Owed

If a tenant pays partial rent on day 10, and you owe a $150 late fee, the late fee is still due. However, you cannot charge it twice or refuse to accept the partial rent because the fee isn’t paid yet. Apply the payment first to rent, then assess the fee on the unpaid balance.

Penalties for Non-Compliance: What Happens If You Break the Rules

ORS 90.260(9): Tenant Remedies

If you violate ORS 90.260, the statute explicitly gives tenants a right to sue:

“A lessor [landlord] who charges or receives a late fee in violation of this section is liable to the tenant in the amount of the late fee charged or received plus actual damages, together with costs and attorney fees.”

This is significant. Here’s what it means:

• Refund the illegal late fee: If you charged $200 and the cap was $150, you owe $200 back
• Plus actual damages: The tenant can claim lost wages (if they had to take time off to dispute the fee), credit reporting harm, emotional distress in some cases
• Plus attorney fees: If the tenant hires a lawyer, you pay for it. This makes small claims cases more likely to be escalated to civil court
• Plus court costs: Filing fees, service fees, etc.

A $50 violation can balloon to $200-$500 once attorney fees are included. This is why compliance matters—it’s not just about being ethical; it’s about protecting your legal exposure.

Eviction Complications

If you’re evicting a tenant for non-payment and you’ve charged illegal late fees, the tenant can raise it as a counterclaim in the eviction case. The judge may dismiss the eviction or allow the tenant to stay if the illegal fees make the total rent calculation unclear. You’ve now lost weeks or months of rent collection while the case drags on.

Regulatory Complaints

Oregon’s Bureau of Labor and Industries (BOLI) handles rental housing disputes. Repeated complaints about illegal late fees can lead to investigation. While BOLI doesn’t directly fine landlords for individual late fee violations, a pattern of non-compliance can support tenant claims in court and damage your credibility.

Audit Your Current Lease: Compliance Checklist

If you’re managing properties in Oregon, review your lease template now. Use this checklist to ensure you’re compliant:

If you checked “no” on any of these, update your lease immediately. Use a new version going forward and offer existing tenants the option to sign an amended lease with corrected late fee language.

Implementation: How to Track and Assess Late Fees Correctly

Knowing the law and applying it consistently are different things. Here’s how to operationalize compliance:

Step 1: Set Up a Rent Receipt System

Document the exact date rent is received. If a tenant pays by:

• ACH transfer or online portal: Digital timestamp is your proof
• Check: Date the check clears your bank is the relevant date, not the date postmarked
• Cash: Get a receipt signed by both parties noting the date and amount

Rent is not “received” until it’s in your account. If a tenant promises to pay on day 5 but it doesn’t hit your account until day 8, the late fee applies.

Step 2: Create a Late Fee Assessment Calendar

Set a reminder for day 6 of each month. On that day, check which units have unpaid rent. For each one:

• Confirm rent due date and amount
• Calculate 10% of that amount
• Document the late fee in writing (email, tenant portal, notice)
• Track in your accounting system

Don’t guess. Write it down.

Step 3: Apply Payment Allocation Rules

If a tenant pays $1,200 on day 10, and rent is $1,500 with a $150 late fee:

• Apply the $1,200 to rent first (leaving $300 unpaid rent)
• The $150 late fee is still due on the $300 unpaid rent
• Or, allocate: $1,200 to rent, then assess the $150 fee on day 6 for the full unpaid amount

Clarify this in writing with tenants so there’s no dispute about what payment covers what.

Step 4: Use a Platform With Built-In Compliance Rules

If you’re managing multiple units, spreadsheets invite errors. Rent payment platforms with built-in late fee logic can automatically flag when a payment is late and calculate the correct fee based on your lease terms. This removes human error and creates an audit trail proving you applied the law consistently.

Recent Changes and Updates (2024-2026)

ORS 90.260 has remained stable, but Oregon’s rental housing laws have expanded around related areas:

Move-Out Inspection Timing (2024 Update)

While not directly about late fees, Oregon now requires specific move-out inspection procedures. Make sure your lease coordinates late fee provisions with these timelines so you’re not assessing fees after a tenant has moved out.

Digital Payment Requirement Discussions

Oregon has not mandated digital rent payment, but many cities (Portland included) have discussions about standardizing payment methods. Some tenant advocates push for free payment options. Make sure your lease includes late fee language that applies regardless of payment method.

Your lease might say: “Late fees apply whether rent is paid by check, ACH transfer, or other method, based on the date the landlord actually receives the payment.”

Common Questions Landlords Ask