California Late Fee Rules (Civ. Code § 1671)

California has no statute setting a maximum late fee. Instead, a late fee is a liquidated-damages clause governed by Civil Code § 1671(d), which makes such provisions in residential leases "void except that the parties... may agree... upon an amount which shall be presumed to be the amount of damage sustained by a breach thereof, when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage." California courts (e.g., Orozco v. Casimiro) have voided late fees that function as penalties rather than genuine estimates of the landlord's costs, such as administrative expense and lost use of funds. A fee unrelated to actual damages is unenforceable even if the lease recites it.

An unenforceable penalty late fee cannot be collected, and amounts already paid may be recoverable by the tenant. Relying on an unlawful penalty fee in an eviction can defeat the unlawful detainer if it inflates the rent demanded.