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 Maryland, the lease agreement is indeed a crucial document outlining the rights and responsibilities of both the tenant and the landlord. Maryland law requires that a lease be in writing if it is for more than one year. While oral lease agreements are legally binding for terms less than one year, written leases provide clearer evidence of the terms agreed upon by the parties and offer better protection, particularly for the tenant. Regarding late fees, Maryland law stipulates that landlords can charge late fees only if this is specified in the lease agreement. The amount and conditions under which late fees can be charged may also be regulated. For instance, Maryland law generally allows landlords to charge a late fee of 5% of the rent due for the rental period, and the fee can only be assessed if the rent is more than 5 days late. The concept of good faith and fair dealing is recognized in Maryland contract law, which means that a landlord's actions in enforcing the lease, including the imposition of late fees, should be fair and not overly punitive. 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.