Colorado Maximum Late Fee: $50 or 5% of Rent, Whichever Is Greater

Under Colorado's Uniform Residential Landlord and Tenant Act (C.R.S. § 38-12-101 et seq.), late fees are strictly regulated:

The Rule

Maximum late fee = greater of $50 OR 5% of monthly rent.

Examples:

• Rent $1,000 → 5% = $50 → max late fee = $50
• Rent $1,500 → 5% = $75 → max late fee = $75
• Rent $800 → 5% = $40 → max late fee = $50 (floor applies)

Conditions & Process

• Grace period: Lease must specify (typically 3–5 business days). No fee during grace period.
• Written notice: Landlord must provide written notice of late fee policy in lease.
• Daily fees: After initial late fee, landlord may charge up to $5/day until paid (statutory cap).
• No compounding: Late fees cannot accrue interest or be added to principal for further late fees.

Enforcement & Tenant Rights

• Excessive late fees = unenforceable; tenant can recover 3x wrongful amount + attorney fees
• Landlord cannot evict solely for unpaid late fees (only for unpaid rent)
• Security deposit cannot be used for late fees
• Local ordinances (Denver, Boulder) may add protections

Practical Advice

Tenants: Document payment timing (bank timestamp, certified mail). Landlords: Automate grace-period tracking; fee must be reasonable estimate of actual damages (admin, opportunity cost). Colorado courts scrutinize "penalty" clauses.