Tennessee Late Fees & Grace Periods: 2026 Landlord Rules

What does Tennessee law actually say about late fees?

The governing statute is T.C.A. § 66-28-201(d), part of the Tennessee Uniform Residential Landlord and Tenant Act (URLTA). There is a five-day grace period beginning the day the rent was due, and that due date itself counts as day one in the calculation. If the last day of the five-day grace period falls on a Sunday or a legal holiday, the landlord cannot impose any charge, provided the tenant pays on the next business day. Any charge or fee — however described — cannot exceed 10% of the amount of rent past due.

The statute uses the phrase "any charge or fee, however described," which means a landlord cannot dodge the cap by labeling the charge as an administrative fee, processing fee, or anything else. That's not a loophole — courts have voided fees that violated the cap even when the tenant signed a lease agreeing to pay more.

The cap applies to the rent that is actually past due, not the total monthly rent. If a tenant has already paid part of the month's rent, the late fee is calculated only on the unpaid balance. So if rent is $1,400 and a tenant paid $700 on time, the maximum late fee is $70 — not $140.

How do I count the five-day grace period correctly?

Before a landlord can charge any late fee, Tennessee law requires a five-day grace period. The clock starts on the day rent is due, and that day counts as day one. So if rent is due on the first of the month, a late fee cannot kick in until the sixth at the earliest.

If the last day of the five-day grace period occurs on a Sunday or legal holiday, the landlord can't impose any charge or fee for the late payment of rent, provided that the rent is paid on the next business day. This means a rent-due date of the 1st with a Sunday falling on the 5th pushes your earliest collection date to Monday the 7th — not the 6th.

Here's a quick reference for the most common due-date scenarios:

What must my lease say for the late fee to be enforceable?

A late fee clause in a residential lease must be in writing and must specify the amount or percentage that will be charged and the conditions that trigger it. A lease that says nothing about late fees cannot be used to justify collecting one after the fact. The same statute that creates the cap also requires these terms to appear in the rental agreement.

Vague language can also sink a late fee provision. A clause that says the landlord "may charge a reasonable late fee" without specifying the dollar amount or percentage leaves too much open to interpretation. Courts evaluating these clauses look for enough specificity that the tenant knew exactly what they were agreeing to when they signed.

The lease must specify: (1) the exact late fee amount or percentage, (2) when the fee applies (e.g., after the 5-day grace period), and (3) whether fees are one-time or recurring. Keep it concrete. "$75 late fee applied on the 6th of the month if rent is not received" is enforceable. "A reasonable fee may apply" is not.

Does this apply everywhere in Tennessee — or just certain counties?

This is the wrinkle most out-of-state guides miss. Tennessee's Uniform Residential Landlord and Tenant Act, which contains the grace period, cap, and disclosure rules described above, does not apply statewide. URLTA does not automatically apply to every rental property in Tennessee. It applies only in counties with a population greater than 75,000, based on the most recent federal census.

Currently, the only counties covered by URLTA are Anderson, Blount, Bradley, Davidson, Hamilton, Knox, Madison, Maury, Montgomery, Rutherford, Sevier, Shelby, Sullivan, Sumner, Washington, Williamson, and Wilson. If your property is in one of these counties — Nashville (Davidson), Memphis (Shelby), Knoxville (Knox), Chattanooga (Hamilton) — the T.C.A. § 66-28-201(d) rules apply in full.

In non-URLTA counties, landlord-tenant relationships are governed by common law and the lease agreement. In non-URLTA counties, the grace period depends on the lease. The 10% cap applies only to URLTA counties. That said, even outside URLTA, courts can still strike down fees they find punitive or unreasonable, so it's smart to stay under the 10% benchmark regardless of county.

What happens if a tenant still doesn't pay after the grace period?

Once the grace period expires and a late fee is properly assessed, nonpayment of rent triggers your right to begin the eviction process. For nonpayment of rent, both URLTA and non-URLTA regimes use a 14-day written notice before the tenancy can be terminated under § 66-28-505(a) or § 66-7-109(a)(1).

If a tenant has failed to make timely rent payments twice within six months, the landlord may use a 7-day notice to vacate under T.C.A. § 66-28-505(a)(2)(B). This notice and the 7-day timeframe only apply to tenants living in counties governed by URLTA. In plain terms: first offense in a 6-month window gets a 14-day pay-or-quit notice; repeat offense within 6 months gets a 7-day unconditional notice.

The decision tree below shows how the process flows once rent goes unpaid:

What are the most common mistakes Tennessee landlords make?

Several errors reliably render late fees uncollectable — or worse, expose the landlord to a tenant counterclaim.

• Charging before day six. Tennessee requires a 5-day grace period before late fees can be assessed, and landlords cannot charge late fees before this period expires, regardless of lease terms. A lease that says "fee applies on day three" is unenforceable in URLTA counties.
• Omitting the fee from the lease. A landlord may collect a late fee only if notice of the fee is included in a written lease. Late fees must be specified in your written lease agreement to be enforceable in Tennessee. You cannot impose fees that were not agreed upon in advance, regardless of how reasonable the fee might be or how late the payment was.
• Charging daily late fees. Tennessee law does not allow for daily late fees; landlords must adhere to the 10% cap. A clause structured as "$10 per day after the 5th" is void under T.C.A. § 66-28-201(d).
• Calculating the fee on total rent instead of past-due rent. The cap applies to the rent that is past due, not the total monthly rent. If a tenant has already paid part of the month's rent, the late fee is calculated only on the unpaid balance.
• Assuming URLTA applies county-wide. The URLTA applies to most residential rentals in Tennessee, but some counties have opted out. In counties where URLTA does not apply, landlord-tenant relationships are governed by common law and the lease agreement. Landlords in smaller counties need a well-drafted lease to fill the statutory gap.

About LeaseHelper: LeaseHelper builds AI-powered lease, eviction, and rental document generators for small landlords and property managers, and publishes guides on landlord-tenant law, security deposits, and evictions.