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 Indiana, the lease agreement is indeed a crucial document outlining the rights of tenants and the responsibilities of landlords. Indiana law favors written leases, which provide clearer and more enforceable terms for both parties compared to oral agreements. Tenants should thoroughly review and understand the lease before signing. Regarding late fees, Indiana does not have a specific statute that limits the amount a landlord can charge for late rent payments. However, the fees must be deemed reasonable and are typically governed by the terms set forth in the lease agreement. Landlords are expected to act in good faith and deal fairly with tenants, which is a principle embedded in contract law. If a lease specifies a precise time for rent to be due and emphasizes that timing is critical ('time is of the essence'), then a landlord may be justified in imposing a late fee for rent paid past that specific hour. However, charging late fees for minor delays without clear terms in the lease could potentially breach the implied duty of good faith and fair dealing.