• NY Apartment Law
  • Fair & Affordable Housing
  • Commercial Lease Law
  • Guidebooks
  • Archives
  • Main Articles
  • Departments
  • eAlerts
  • Blogs
  • Log In
  • Log Out
  • My Account
  • Subscribe
  • NY Apartment Law
  • New York Apartment Law Insider
  • New York Landlord V. Tenant
  • Co-Op & Condo Case Law Digest
  • New York Rent Regulation Checklist, Fourth Edition
  • 2025 New York City Apartment Management Checklist
  • Fair & Affordable Housing
  • Fair Housing Coach
  • Assisted Housing Management Insider
  • Tax Credit Housing Management Insider
  • Fair Housing Boot Camp. Basic Training For New Hires
  • Commercial Lease Law
  • Commercial Lease Law Insider
  • Best Commercial Lease Clauses, 17/e
  • Best Commercial Lease Clauses: Tenant's Edition
  • Best Commercial Lease Clauses, 17/e
  • Best Commercial Lease Clauses, 17/e
  • Main Articles
  • Features
  • Certification
  • Compliance
  • Crime & Security
  • Dealing with Households
  • Income Calculations
  • Maintenance
  • Screening Applicants
  • Departments
  • Dos and Don'ts
  • Q and A
  • Recent Court Rulings
  • HUD Audits
  • In the News
  • Ask the Insider
  • Ask the Insider
  • Send Us A Question
May 21, 2025
We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
The Habitat Group Logo
  • NY Apartment Law
    • New York Apartment Law Insider
    • New York Landlord V. Tenant
    • Co-Op & Condo Case Law Digest
    • New York Rent Regulation Checklist, Fourth Edition
    • 2025 New York City Apartment Management Checklist
  • Fair & Affordable Housing
    • Fair Housing Coach
    • Assisted Housing Management Insider
    • Tax Credit Housing Management Insider
    • Fair Housing Boot Camp. Basic Training For New Hires
  • Commercial Lease Law
    • Commercial Lease Law Insider
    • Best Commercial Lease Clauses, 17/e
      • Best Commercial Lease Clauses, 17/e
    • Best Commercial Lease Clauses: Tenant's Edition
  • Guidebooks
  • May 21, 2025
  • Log In
  • Log Out
  • My Account
  • Subscribe
  • May 21, 2025
AHMI Logo.webp
  • Archives
  • Main Articles
    • Features
    • Certification
    • Compliance
    • Crime & Security
    • Dealing with Households
    • Income Calculations
    • Maintenance
    • Screening Applicants
  • Departments
    • Dos and Don'ts
    • Q and A
    • Recent Court Rulings
    • HUD Audits
    • In the News
    • Ask the Insider
      • Send Us A Question
  • eAlerts
  • Blogs
Free Issue
The Habitat Group Logo
May 21, 2025
  • Log In
  • Log Out
  • My Account
Home » Owner Must Follow State Law's Restriction on Late Fees

Owner Must Follow State Law's Restriction on Late Fees

Jul 12, 2013

Facts: A Section 8 resident’s rent was $50 per month. The lease provided that a $25 late charge would be assessed each month that he didn’t pay his rent in full by the fifth of the month. The resident’s account became delinquent in July 2012 after he failed to pay in full a $95.50 charge for repair and maintenance services. As a result, his rent payment was late in July, August, and September 2012, and he was assessed three late charges totaling $75. On Sept. 26, 2012, the owner filed an eviction action for nonpayment of rent. The resident was $50 in arrears when the eviction action was commenced.

The parties agreed that the owner was entitled to evict the resident unless the court determined that the late fee was barred by a state law that placed a cap on late fees at 8 percent of the monthly rent. The district court ruled that the $25 late fee was “reasonable and valid.” The district court also concluded that there was a conflict between the federal and state regulations because federal regulations place no cap on the late fees that may be assessed by a PHA, other than that the amount must be reasonable, even though state law caps the late fee, which might be lower than what the owner deems to be a reasonable late fee. The district court concluded that, because the federal and state regulations conflict, the federal scheme supersedes the state law. The resident appealed.

Ruling: A Minnesota appeals court reversed the district court’s decision.

Reasoning: The court concluded that there was no actual conflict between HUD regulations and state law. An actual conflict exits if compliance with both federal and state law is impossible. Here, the court concluded that compliance with both the federal and state standards was achievable. The owner could comply with both the state and federal standards by imposing a late fee equal to 8 percent of a tenant’s monthly rent, up to $25. The court also stated that complying with both standards would not be difficult—any lease that complies with the federal standard can be amended by adding a clause capping the late fee at 8 percent of the late payment amount, or simply charging a dollar amount less than 8 percent of the monthly rent amount.

In addition, the court found that HUD’s reasonableness standard with respect to late fees wasn’t intended to preempt stricter state and local regulation of lease terms. In fact, the court pointed out that HUD’s guidebook repeatedly emphasizes that housing authorities must comply with all state and local laws governing lease terms.

  • Housing and Redevelopment Authority of Duluth v. Lee, July 2013
Recent Court Rulings
      • Related Articles

        Owner Must File Eviction Case on New Grounds

        Owner Can Evict Resident for Chronic Late Rent Payments

        PHA Didn't Send a Separate Notice to Vacate as Required by State Law

      Popular Stories

      • HUD Delays Implementation of HOME Final Rule Amid Regulatory Freeze

        Feb 14, 2025
        Feature
        By Eric Yoo
      • How to Handle Income Changes from the Social Security Fairness Act

        Apr 11, 2025
        Feature
        By Eric Yoo
      • Publications
        • Assisted Housing Management Insider
        • Commercial Lease Law Insider
        • Co-op & Condo Case Law Tracker Digest
        • Fair Housing Coach
        • New York Apartment Law Insider
        • New York Landlord v. Tenant
        • Tax Credit Housing Management Insider
      • Additional Links
        • Contact Us
        • Advertise
        • Group Subscriptions
        • Privacy Policy
      • Boards of Advisors
        • Assisted Housing Management Insider
        • Commercial Lease Law Insider
        • Fair Housing Coach
        • New York Apartment Law Insider
        • Tax Credit Housing Management Insider
      ©2025. All Rights Reserved. Content: The Habitat Group. CMS, Hosting & Web Development: ePublishing
      The Habitat Group Logo
      • NY Apartment Law
        • New York Apartment Law Insider
        • New York Landlord V. Tenant
        • Co-Op & Condo Case Law Digest
        • New York Rent Regulation Checklist, Fourth Edition
        • 2025 New York City Apartment Management Checklist
      • Fair & Affordable Housing
        • Fair Housing Coach
        • Assisted Housing Management Insider
        • Tax Credit Housing Management Insider
        • Fair Housing Boot Camp. Basic Training For New Hires
      • Commercial Lease Law
        • Commercial Lease Law Insider
        • Best Commercial Lease Clauses, 17/e
          • Best Commercial Lease Clauses, 17/e
        • Best Commercial Lease Clauses: Tenant's Edition
      • Guidebooks
      • May 21, 2025
      • Log In
      • Log Out
      • My Account
      • Subscribe
      • May 21, 2025
      AHMI Logo.webp
      • Archives
      • Main Articles
        • Features
        • Certification
        • Compliance
        • Crime & Security
        • Dealing with Households
        • Income Calculations
        • Maintenance
        • Screening Applicants
      • Departments
        • Dos and Don'ts
        • Q and A
        • Recent Court Rulings
        • HUD Audits
        • In the News
        • Ask the Insider
          • Send Us A Question
      • eAlerts
      • Blogs
      Free Issue
      The Habitat Group Logo
      May 21, 2025
      • Log In
      • Log Out
      • My Account