---
title: "How to set a late fee and a grace period"
description: "Set a lease late fee and grace period, post the fee once when it is earned, and keep the unpaid rent on the ledger beside it."
url: https://tivio.io/blog/how-to-set-a-late-fee-and-a-grace-period
author: "Tivio Team"
publisher: Tivio (https://tivio.io)
published: 2026-10-26
updated: 2026-10-26
topic: "Rent & payments"
---

# How to set a late fee and a grace period

> A late fee is a charge the lease allows after rent stays unpaid past the grace period. The unpaid rent remains due. Count the grace period in calendar days from the charge's own due date, and post the fee once on the morning it is earned. British Columbia caps a contractual late fee at $25. Many US states set their own cap or leave the amount to the lease. Check the unit's rule before you print a number.

## Key takeaways

- Write the due date, the number of grace days, and the fee amount in the lease.
- Start the clock on that charge's due date, not on the first of the month for a mid-month move-in.
- Post the fee once, as its own line. A daily fee needs its own daily line and any statutory cap.
- In British Columbia, a late fee must be in the agreement and cannot exceed $25.

A late fee is a charge the lease allows after rent stays unpaid past the grace period. It is not a daily slice of rent, and it is not a substitute for the unpaid rent. Set the amount, the grace period, and the clock in the lease, then post the fee as its own line on the day it is earned.

![A painted front door with a brass knocker on a historic house.](https://tivio.io/blog/media/2026/10/a-painted-front-door-with-a-brass-knocker-on-a-historic-hous-jv1ozy.webp)

## What is a late fee?

A late fee is an extra charge for missing the due date the lease names. The rent itself remains due. If April rent is $1,850 and the late fee is $50, the tenant owes $1,900 once the fee is earned, not $50 instead of the rent.

There is no single US or Canadian amount. British Columbia's paying-rent guidance, updated March 4, 2026, allows a late fee only when the tenancy agreement states it, and the fee cannot exceed $25. That page is [Paying rent](https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/rent-rtb/paying-rent). A $50 fee in a BC agreement is above that cap. Many US states allow a fee the lease states and some cap the dollar amount or the percent. Look up the cap for the unit before you print the lease. This article is the bookkeeping. It is not legal advice.

## How do you count the grace period?

Write the due date, the grace period, and whether the fee posts on the morning after the last grace day. Use calendar days, and say so.

Example. Rent is due April 1, 2026. The lease gives five calendar days of grace and a $50 flat fee. Grace runs April 1 through April 5. The fee posts on April 6 if the rent is still open that morning. A payment that arrives April 5 does not earn the fee. A payment that arrives April 6 does.

Do not start the grace period on a prorated move-in that was due on March 12 by pretending the due date was March 1. The clock starts on the due date of that charge. The March proration example is in [how to prorate rent](https://tivio.io/blog/how-to-prorate-rent-with-a-calculator-and-examples).

A flat fee is easier to explain than a percent. If you use a percent, calculate it on the unpaid rent, not on parking, unless the lease says the fee applies to every unpaid charge. Five percent of $1,850 is $92.50. Five percent of $1,925, if parking is included, is $96.25. Pick one base and write it in the lease.

## How do you post the fee so the balance stays honest?

Unit 2. April rent $1,850 and parking $75 posted April 1. No payment by April 6. The lease fee is $50, flat, on unpaid rent.

| Date | Description | Charge | Balance |
| --- | --- | --- | --- |
| Apr 1, 2026 | Rent, April 2026 | $1,850.00 | $1,850.00 |
| Apr 1, 2026 | Parking, April 2026 | $75.00 | $1,925.00 |
| Apr 6, 2026 | Late fee, April rent unpaid after grace | $50.00 | $1,975.00 |

If the tenant pays $1,850 on April 6, apply it to the oldest charge first. That clears the rent. Parking and the late fee stay open, $125 together, unless the lease says a payment of the rent waives the fee. Most leases do not say that. Do not waive the fee in the office and leave it on the ledger. Post a credit with the reason if you waive it.

Post the fee once. A nightly job that adds another $50 every morning after April 6 will quadruple the fee by April 9. If the lease truly charges a daily amount, the line should say "daily late charge, April 6" and the next day gets its own line, up to any cap the statute sets.

## What do you send the tenant?

One short note on April 6:

> April rent of $1,850 was due April 1. The five-day grace period ended April 5. A late fee of $50 is now due, along with any unpaid rent and parking. The open balance is $1,975.

Attach the ledger lines or the same figures. Keep a copy. If they pay the next day, the [rent receipt](https://tivio.io/blog/how-to-write-a-rent-receipt-with-a-sample) should show what the payment cleared and what remains.

[Tivio](https://tivio.io/) can charge rent each month and add a late fee after the grace period you set. The fee is its own charge. Payments still apply to the oldest charge first. The who-owes list then shows rent, parking, and the fee as separate open amounts, which is the list you want before anyone talks about a payment plan.

Check the local cap, put the fee and the grace period in the lease, post the fee once on the morning it is earned, and receipt whatever they pay against the real balance.

## Frequently asked questions

### Does the late fee replace the rent?

No. The rent stays due. The fee is an additional charge once the grace period ends. A receipt should show which of the two a payment cleared.

### What is British Columbia's late-fee cap?

The province's paying-rent page says a late fee has to be in the tenancy agreement and cannot exceed $25. That cap is British Columbia's, not a US rule.

### Do I charge a late fee on a prorated move-in?

Only if that prorated charge is unpaid after its own due date and grace period. Do not measure a March 12 charge from March 1.

### Can I add the fee every day the rent is late?

Only if the lease says the fee is daily and the local cap allows it. Post each day as its own line. A flat fee posts once.

## Sources

- [Paying rent](https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/rent-rtb/paying-rent), Province of British Columbia
- [How to prorate rent (with a calculator and examples)](https://tivio.io/blog/how-to-prorate-rent-with-a-calculator-and-examples), Tivio