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 Minnesota, the lease agreement is indeed a crucial document outlining the rights of tenants and the responsibilities of landlords. Minnesota law allows landlords to include terms for late fees in the lease agreement, but these fees must be reasonable and agreed upon by both parties. According to Minnesota Statute 504B.177, a late fee can be charged only if it has been agreed upon in the lease and the rent is not paid within the period specified in the lease, which must be at least eight days after the due date. The law also caps late fees at 8% of the overdue rent payment. Additionally, Minnesota recognizes the implied covenant of good faith and fair dealing in contracts, which means that landlords are expected to act fairly and not use the lease terms to take advantage of tenants. For example, charging a late fee for rent that is only an hour late without clear stipulation in the lease could be seen as a breach of this duty. Tenants should read their lease agreements carefully and may consult with an attorney if they have questions about their rights and obligations under the lease.