In URLTA counties, Tenn. Code 66-28-201(d) caps any late fee at 10% of the rent past due and requires a five-day grace period before a fee may be charged. If the grace period ends on a Sunday or legal holiday, no fee applies if rent is paid the next business day.
Tenn. Code 66-28-201(d), part of the Uniform Residential Landlord and Tenant Act (which applies only in counties over 75,000 population), provides that any late-payment "charge or fee, however described... shall not exceed ten percent (10%) of the amount of rent past due." There is a five-day grace period beginning the day rent was due before a fee may be charged, with the due date counted in the five days. If the last day of the grace period falls on a Sunday or legal holiday, the landlord may not impose a fee provided rent is paid the next business day. A late fee must also be stated in the written lease to be enforceable.
A late fee above the 10% cap, or one charged before the five-day grace period ends, is unenforceable; a tenant may dispute or recover an overcharge and is not obligated to pay an illegal fee.
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