Can my landlord charge late fees on disputed CAM charges?

If your lease does not explicitly exempt disputed amounts from late fees, the landlord may try. This is why it is important to negotiate a carve-out for amounts withheld in good faith under dispute or holdback provisions. Without this protection, disputing a CAM overcharge could cost you more in penalties than the overcharge itself.

Is there a legal limit on late fees in commercial leases?

Late fee regulations vary by state. Some jurisdictions limit late fees to a reasonable percentage of the overdue amount, while others have no statutory cap. However, courts may void late fees that are deemed punitive rather than compensatory regardless of the lease language.

How does CAMAudit help with late payment disputes?

If your landlord has charged you late fees on CAM amounts that were legitimately disputed, CAMAudit's audit report documents the overcharges that formed the basis of your dispute. This evidence supports a claim that the late fees should be reversed because the underlying charges were incorrect.

Late Payment Clause

Last updated: April 2026

By Angel Campa, Founder

Late fees of 3-5% can apply to disputed CAM amounts unless your lease exempts good-faith disputes, turning overcharge recovery into a penalty risk.

What Is a Late Payment Clause?

A late payment clause defines the consequences when a tenant fails to pay rent, CAM charges, or additional rent by the due date. It typically specifies a grace period, a late fee (either a flat amount or percentage), and whether the landlord can charge interest on overdue amounts. Some clauses also include notice requirements before penalties apply.

Why This Clause Matters for CAM Audits

Late payment clauses interact with CAM disputes in a critical way. If a tenant withholds or disputes a CAM charge, the landlord may attempt to impose late fees and interest on the disputed amount. Without protective language, a legitimate CAM dispute could trigger penalties that exceed the disputed amount itself. Understanding the interplay between late fees and dispute rights is essential.

Sample Lease Language

“If any installment of Rent or Additional Rent is not received by Landlord within ten (10) days after the due date, Tenant shall pay a late charge equal to five percent (5%) of the overdue amount or Fifty Dollars ($50.00), whichever is greater. In addition, any amount not paid within thirty (30) days of the due date shall bear interest at the rate of one percent (1%) per month from the due date until paid. Late charges and interest shall not apply to amounts withheld in good faith pursuant to Tenant's dispute rights under this Lease. Landlord shall provide written notice of any deficiency before imposing late charges.”

This is illustrative language only. Your actual lease language controls your rights.

Red Flags to Watch

⚠No grace period before late fees apply
⚠Late fee percentage exceeds 5% or is calculated on cumulative balances
⚠Interest rate exceeds the legal maximum for the jurisdiction
⚠Late fees apply to amounts legitimately disputed or withheld under holdback rights
⚠No written notice requirement before penalties are imposed

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Negotiation Tips

✓Negotiate a grace period of at least 5-10 days before any late fees apply
✓Cap the late fee at 3-5% of the overdue amount
✓Exempt amounts disputed in good faith from late fees and interest
✓Require written notice of a payment deficiency before the landlord can impose penalties

Key Data

3-5%
The typical late fee in commercial leases ranges from 3% to 5% of the overdue amount [industry estimate]
Source: Commercial Lease Terms Survey (2024)

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Related Resources

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Frequently asked questions

Need to extract lease terms before your audit?

A CAM audit is only as accurate as your lease data. lextract.io extracts 126 structured fields from any commercial lease PDF: CAM definitions, pro-rata share, caps, base year, and audit rights. So you have the exact terms your landlord is supposed to follow.

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This page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.