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 Montana, the lease agreement is indeed a crucial document outlining the rights and responsibilities of both the tenant and the landlord. It is advisable for tenants to have a written lease, as it provides more security and clarity than an oral agreement. When it comes to late fees, Montana law (Montana Code Annotated § 70-24-201) does allow landlords to charge them, but the fees must be reasonable and are typically governed by the terms of the written lease agreement. The lease should clearly state the amount of the late fee, when it is assessed, and any grace period that is provided. Additionally, under the implied covenant of good faith and fair dealing, which is recognized in Montana contract law, a landlord's actions in enforcing late fees should be fair and not overly punitive. For instance, charging a late fee for rent that is only an hour late without a specific provision in the lease stating such a strict deadline could potentially be seen as a breach of this duty. Tenants should read their lease agreements carefully to understand their obligations and the potential consequences of late payments.