The most important source of information about a residential tenant’s rights and a landlord’s responsibilities is the written lease agreement. Some landlords prefer oral agreements, but it is more common for them to require the tenant's signature on a written lease—and a written lease protects the tenant more than an oral agreement. Be sure to read the lease carefully before you sign it.

A residential landlord’s ability to charge late fees generally depends on the specific language in the written lease agreement; the state’s landlord-tenant laws that may limit the amount of late fees the landlord can charge and the circumstances in which they can be charged; and the state's contract law.

Contract law in most states recognizes an implied duty of good faith and fair dealing between parties to a contract, and a residential landlord who charges late fees because the tenant is an hour late paying the rent may be in breach of the landlord’s implied duty of good faith and fair dealing—unless, for example, the lease agreement specifies an hour (12:00 p.m.) of the day by which rent is due and states that time is of the essence.

In Alabama, the lease agreement is indeed a crucial document for outlining the rights of tenants and the responsibilities of landlords. A written lease provides clarity and legal protection for both parties more so than an oral agreement. Tenants should thoroughly review and understand the lease before signing. Regarding late fees, Alabama's landlord-tenant laws allow landlords to charge late fees as specified in the lease agreement. However, these fees must be reasonable and are subject to limitations to prevent unconscionable terms. The state's contract law also includes an implied covenant of good faith and fair dealing, which requires both parties to act honestly and fairly in the performance and enforcement of the contract. A landlord charging excessive late fees or fees for marginally late payments could potentially be seen as acting in bad faith, especially if the lease does not explicitly state such strict time constraints for rent payments. It is advisable for tenants to seek clarification on any lease terms they find unclear and, if necessary, consult with an attorney to understand their rights and obligations under Alabama law.