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 North Carolina, the written lease agreement is indeed a crucial document outlining the rights of residential tenants and the responsibilities of landlords. Tenants are encouraged to thoroughly review and understand the lease before signing. Regarding late fees, North Carolina state law (N.C. Gen. Stat. § 42-46) permits landlords to charge late fees, but with limitations. The late fee cannot exceed $15 or 5% of the rental payment for monthly leases, and for weekly leases, the fee cannot exceed $4 or 5% of the weekly rental payment. Additionally, late fees can only be charged if the rent is five days late for monthly leases or two days late for weekly leases. The law also requires that the terms for late fees be explicitly stated in the lease agreement. The concept of an implied duty of good faith and fair dealing is recognized in North Carolina contract law, which means that landlords are expected to act fairly and not exploit the timing of rent payments to impose unreasonable late fees. If a lease specifies a particular time by which rent is due and emphasizes that time is of the essence, then the landlord may be justified in charging a late fee for rent paid after that time. However, such terms must be clearly stated in the lease agreement to be enforceable.