Iowa Code Sec. 562A.9(4) caps late fees by rent amount. If monthly rent is $700 or less, a lease may not charge over $12 per day or $60 per month total. If rent is more than $700, the cap is $20 per day or $100 per month total. A lease term exceeding these limits is unenforceable.
Iowa Code Sec. 562A.9(4) sets a two-tier limit on late fees. 'For rental agreements in which the rent does not exceed seven hundred dollars per month, a rental agreement shall not provide for a late fee that exceeds twelve dollars per day or a total amount of sixty dollars per month.' For rent greater than $700 per month, a lease 'shall not provide for a late fee that exceeds twenty dollars per day or a total amount of one hundred dollars per month.' Iowa law sets no separate statutory grace period; rent is 'payable without demand or notice at the time and place agreed upon' under Sec. 562A.9(3), so the lease controls the due date and any grace period.
A late fee charged above the Sec. 562A.9(4) daily or monthly cap is not enforceable; a tenant cannot be required to pay the excess, and an eviction or claim premised on the unlawful fee can be challenged.
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