The Common Law

'Late Rent' Penalties and Cash Rental Payments

Are "late rent" penalties enforceable?

Yes, if there is a late rent (also known as "late fee") provision is in the lease agreement. Most leases require a tenant to pay an additional late fee if the rent is paid after the due date and any additional grace period. This is allowable under Texas law, even though there is no statute in Texas that specifically addresses late fees. Late fees are normally in the $25-50 range for typical residential leases. A tenant could try to challenge a late fee that is extremely excessive (sometimes referred to as "unconscionable"), but it is uncertain how a court would view the high fees. Be sure to read your lease carefully before signing it so that you understand what penalties will apply if your rent payment is late.

My landlord refused to take cash and forced me to come back and pay her with a personal check. Does my landlord have the right to refuse to accept cash as my rent payment?

It depends on the terms of your lease agreement. As a general rule, Texas law requires a landlord to accept a tenant's timely cash rental payment unless the written lease between the landlord and tenant specifically states that the rental payment must be made by some other means than cash. For example, some leases might require that all rental payments are by check, money order, or other negotiable instrument. Paying your landlord with a check or other traceable means is most likely in your best interests, because there will be a clear record of your payment.

Keep in mind that if you decide to pay in cash in the future (assuming your lease does not prohibit you from paying in cash), Texas law requires your landlord to do several things in order to have a record of the transaction. First, any landlord that receives a cash rental payment must provide the tenant with a written receipt. Second, the landlord must enter the payment date and amount in a record book maintained by the landlord. A tenant may file suit against the landlord requiring compliance with the law if the landlord refuses to give you a written receipt for cash payment. A tenant that files suit may recover the greater of one month's rent or $500 for each time the landlord refused to provide a written receipt, court costs, and reasonable attorneys' fees.

Please submit column suggestions, questions, and comments to thecommonlaw@austinchronicle.com. Submission of potential topics does not create an attorney-client relationship, and any information submitted is subject to being included in future columns.

Marrs, Ellis & Hodge LLP, www.jmehlaw.com.

The material in this column is for informational purposes only. It does not constitute, nor is it a substitute for, legal advice. For advice on your specific facts and circumstances, consult a licensed attorney. You may wish to contact the Lawyer Referral Service of Central Texas, a non-profit public service of the Austin Bar Association, at 512-472-8303 or www.austinlrs.com.

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