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 New Mexico, 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, as it provides more security and clarity than an oral agreement. Regarding late fees, New Mexico's landlord-tenant laws stipulate that any late fees charged must be reasonable and are typically governed by the terms of the written lease agreement. The state law may impose limits on the amount and enforceability of late fees to prevent them from being excessive. Additionally, New Mexico recognizes the implied covenant of good faith and fair dealing in contractual relationships, which means that landlords are expected to act fairly and not exploit the timing of rent payments to impose unreasonable late fees. For instance, a landlord may be acting in bad faith if they charge a late fee for rent that is only an hour overdue, unless the lease explicitly states a specific time by which rent must be paid and emphasizes that timing is critical. It is advisable for tenants to consult with an attorney if they believe their landlord is not adhering to the terms of the lease or is acting in bad faith regarding late fees.