New York Late Rent Fee Laws: Limits, Grace Periods, and Penalties

N.Y. Real Property Law § 238-a(2) bars any payment, fee, or charge for late rent unless rent is more than five days overdue, and caps the charge at fifty dollars or five percent of the monthly rent, whichever is less. Because it is the lesser of the two, any rent above $1,000 yields a $50 ceiling, and rent of $900 yields $45. The cap applies statewide to residential dwelling units regardless of what the lease says, and § 238-a(3) makes any lease provision waiving or limiting the section void as against public policy. The one carve-out is cooperative housing corporations, which may charge a shareholder up to eight percent of the monthly maintenance fee if the proprietary lease provides for it.

No late fee may be demanded unless rent has not been paid within five days of the date it was due. A lease that tries to charge on day two or three is unenforceable to that extent, because § 238-a(3) voids provisions that limit the statute's protections.

Section 238-a caps the fee but does not itself create a right to charge one, so the lease must contain a late fee clause to give the charge a contractual basis. Any lease term setting a higher fee or a shorter grace period is void, and the enforceable amount drops to the statutory ceiling.

An over-cap or early late fee is void as against public policy under § 238-a(3), so the landlord cannot collect it and a tenant who paid it can sue for a refund. Separately, RPAPL § 702 defines rent in a residential summary proceeding as the monthly or weekly amount charged for use and occupancy only, so late fees cannot be demanded in a nonpayment case no matter what the lease says.

RPL § 238-a(2-a) allows a bounced-check fee only if the lease provides for it, and caps it at the landlord's actual costs for the returned check or the amount in General Obligations Law § 5-328(3), whichever is greater. If the charge exceeds the § 5-328(3) figure of twenty dollars, the landlord must give the tenant evidence substantiating the actual cost on request.

No change to RPL § 238-a in 2024, 2025, or 2026; the $50-or-5% cap and five-day grace period have been in force since the Housing Stability and Tenant Protection Act of 2019. New York's Good Cause Eviction law enacted in 2024 changed eviction and renewal standards in New York City and opt-in municipalities but did not alter late fee limits.

Two things trip up small New York landlords. First, the cap is the lesser of $50 and 5 percent, so above $1,000 rent your ceiling is a flat $50 and it never grows, no matter how many months go unpaid, because it is a per-late-payment charge on the monthly rent. Second, RPAPL § 702 means late fees are not rent: you cannot include them in a fourteen-day rent demand or in the amount a tenant must pay to resolve a nonpayment proceeding, and doing so can get the petition dismissed or the demand invalidated. Application fees are separately capped, with background and credit check charges limited to actual cost or twenty dollars, whichever is less.

• N.Y. Real Prop. Law § 238-a
• N.Y. Real Prop. Acts. Law § 702
• N.Y. Gen. Oblig. Law § 5-328