How much can a landlord charge for late rent in Memphis, Tennessee?

In Shelby County, Tennessee, which is covered by the Uniform Residential Landlord and Tenant Act, Tennessee Code Annotated section 66-28-201(d) caps any charge or fee for late payment of rent, however it is described in the lease, at ten percent of the amount of rent past due. On the Shelby County median gross rent of 1,232 dollars a month reported by the Census Bureau's 2020 to 2024 American Community Survey, the most a landlord could charge is 123.20 dollars. If the tenant has paid part of the rent, the cap is measured against the unpaid balance, not the full monthly rent. This is general information, not legal advice.

When does the five-day grace period for rent start in Tennessee?

Under Tennessee Code Annotated section 66-28-201(d), the five-day grace period begins on the day rent is due, and the due date itself counts as day one. For rent due on the first of the month in Shelby County, Tennessee, the grace period runs through the fifth, and a late fee may be charged beginning on the sixth. If the fifth day falls on a Sunday or a legal holiday listed in Tennessee Code section 15-1-101, the landlord may not charge a late fee as long as the rent is paid on the next business day.

Does the Tennessee late fee cap apply in Fayette County?

Not by statute. Tennessee Code Annotated section 66-28-102 applies the Uniform Residential Landlord and Tenant Act only in counties with a population above 75,000 in the 2010 federal census. Shelby County, Tennessee qualifies; Fayette County, Tennessee does not. In Fayette County the lease sets the grace period and late charge, subject to general Tennessee contract law, so the ten percent cap and the five-day grace period are not imposed on a Somerville or Oakland, TN rental by the statute. Many landlords write Fayette County leases to the same standard anyway so that one set of terms works across the county line. This is general information, not legal advice.

Can a Tennessee landlord charge a fee for a bounced rent check?

Yes, and it is separate from the late fee. Tennessee Code Annotated section 47-29-102 lets the payee of a check, draft or order that is returned for insufficient funds, no account or a defective signature assess a handling charge of up to 30 dollars against the person who wrote it. That charge is for the returned instrument itself; if the rent then remains unpaid past the grace period, the late-fee rules in section 66-28-201(d) govern the late charge in Shelby County, Tennessee. The lease should state both.

Landlord Law & Operations · September 14, 2026

Five Days and Ten Percent: What Tennessee's Late-Rent Statute Actually Lets a Memphis Landlord Charge

Most lease forms floating around Shelby County, Tennessee carry a late-fee clause written somewhere else. A flat $75 after the third, $10 a day until paid, a "processing charge" stacked on top. In Memphis and the rest of Shelby County, one sentence of state law decides which of those survive. Here is the statute, the math on a real Shelby County rent, the calendar dates that trip owners up, and the county line where the rule stops.

What the statute says

The controlling text is Tenn. Code Ann. § 66-28-201(d), part of the Uniform Residential Landlord and Tenant Act. It does three things. It creates a five-day grace period that starts on the day rent is due, and it says the due date counts as day one. It says that if the last day of that grace period lands on a Sunday or a legal holiday, no late fee may be charged provided the rent is paid on the next business day. And it caps any charge or fee, however described, for late payment at ten percent of the amount of rent past due.

Three phrases carry the weight. "Counts as day one" means rent due on the first is not late-fee eligible until the sixth, not the seventh. "However described" means renaming the charge does not move it outside the cap: a processing fee, an administrative fee and a per-diem charge for late rent are all late fees. And "amount of rent past due" means the base is the unpaid balance, not the contract rent.

The math on a Shelby County rent

The Census Bureau's QuickFacts for Shelby County, Tennessee puts median gross rent at $1,232 a month for 2020–2024. On that unit the ceiling is $123.20. A lease that says "$150 late fee" is over the cap by $26.80 on the median rent, and the excess is not collectible even though the tenant signed it, because § 66-28-201(a) says a rental agreement cannot make a tenant waive rights under the chapter.

Partial payments change the base. If the tenant pays $1,000 on the first and the remaining $232 on the tenth, the rent past due when the fee attaches is $232, and the most the lease can charge is $23.20. A flat fee written for the full rent would be wrong in that month. Daily fees compound the problem: $10 a day on the median unit crosses $123.20 on the thirteenth day late, and everything after that is uncollectible. The clean drafting choice is a single fee stated as a percentage of the unpaid balance, capped at ten, assessed once.

A late fee is not a revenue line. Underwrite it at zero, draft it at the statutory ceiling, and apply it the same way to every tenant in the building.

The calendar

For rent due on the first, the grace period is the first through the fifth and the fee attaches on the sixth. Rent due October 1, 2026 has a grace period ending Monday, October 5, so a fee may be charged from October 6. The wrinkle is the Sunday-and-holiday rule. Rent due September 1, 2027 has a fifth day of Sunday, September 5. The next day, Monday, September 6, 2027, is Labor Day, a legal holiday under Tenn. Code Ann. § 15-1-101. The next business day is Tuesday, September 7; rent paid that day carries no late fee. The same section makes Saturday afternoons a "half-holiday", and the statute is silent on whether that reaches a grace period ending on a Saturday, as December's does in 2026. Our practice is the conservative one: treat it as extended and charge on the following Monday. That is a drafting question for a Tennessee attorney, not a place to test the statute against a tenant.

Bounced payments are a different statute

A returned check is not a late fee. Tenn. Code Ann. § 47-29-102 lets the payee of a check, draft or order returned for insufficient funds, no account or a defective signature assess a handling charge of up to $30 against the person who wrote it. That is for the instrument. If the rent then stays unpaid past the fifth, the ten-percent late fee attaches on its own schedule. The statute speaks to checks, drafts and orders; how it maps to a returned ACH debit or a reversed card payment through a resident portal is a lease-drafting question, and the lease should say what happens rather than leaving it to argument.

The county line

Tenn. Code Ann. § 66-28-102 applies the whole chapter only in counties with a population above 75,000 in the 2010 federal census, and in those counties it preempts local landlord-tenant rules. Shelby County is in. Fayette County, Tennessee is not, so a rental in Oakland or Somerville in Fayette County has no statutory grace period and no statutory cap. The lease governs, subject to general Tennessee contract law, under which a charge that reads as a penalty rather than a genuine estimate of the landlord's loss is the kind of clause a court can decline to enforce. Our team writes Fayette County leases to the Shelby County standard anyway. One set of terms across the line is easier to administer, easier to explain to a tenant, and harder to challenge. We covered the same county-line problem for deposits in our security-deposit article.

Why uniform enforcement matters more than the fee

The number that matters on a late payer is not the fee, it is the fourteen-day notice clock and the detainer filing that follow, which we walked through in the Shelby County eviction timeline. A late fee waived for one tenant and charged to another is a fair-housing exposure and a credibility problem in General Sessions court, where a judge will ask why the ledger is inconsistent. Charge it the same way every month, on the same day, to every unit, from Midtown Memphis to Collierville, TN, and document it in the portal. Under our lease, tenants are responsible for legal fees arising from a breach, which is a far larger number than any late fee and the reason the lease, not the fee schedule, is where the leverage lives.

One financing note, because a late payer is a carrying-cost problem first. Freddie Mac's Primary Mortgage Market Survey release dated September 10, 2026 put the 30-year fixed at 6.76%, up from 6.71% the prior week. That is the owner-occupied benchmark; investor loans price above it. A month of rent arriving ten days late does not move that payment, and a $123.20 fee does not cover it. The fee's job is to make the sixth of the month feel different from the first, nothing more.

Management fees at Homefront never exceed 10% of monthly rent, with a customized schedule by portfolio size and no hidden charges; tenant screening is paid by the applicant. If your lease form came from another state, send it with the address and we will tell you which clauses survive Shelby County.

Sources & further reading: Tenn. Code Ann. § 66-28-201 — Terms and conditions (five-day grace period; 10% late-fee cap), Tenn. Code Ann. § 66-28-102 — Application and preemption (counties over 75,000 in the 2010 census), Tenn. Code Ann. § 15-1-101 — Legal holidays, Tenn. Code Ann. § 47-29-102 — Handling charge on returned checks ($30), U.S. Census Bureau QuickFacts — Shelby County, Tennessee (median gross rent, ACS 2020–2024), Freddie Mac Primary Mortgage Market Survey, release dated September 10, 2026. Statutes verified September 2026 against the 2025 Tennessee Code as published by Justia; the General Assembly can amend them in any session. This article is general information about Tennessee landlord-tenant law and rental operations, not legal advice; have a Tennessee attorney review your lease.