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 South Dakota, the lease agreement is indeed a crucial document outlining the rights of tenants and the responsibilities of landlords. A written lease provides clarity and legal protection for both parties more so than an oral agreement. Tenants are encouraged to read and understand the lease before signing. Regarding late fees, South Dakota law allows landlords to charge them as specified in the lease agreement. However, there are no specific state statutes that limit the amount or frequency of late fees, meaning the terms of the lease will largely dictate this aspect. It is important for the lease to clearly define when late fees will be incurred. Under general contract law principles, which South Dakota recognizes, there is an implied duty of good faith and fair dealing in contractual relationships. This means that a landlord's actions, including the imposition of late fees, should not be unreasonable or excessively punitive. If a lease specifies a particular time by which rent is due and emphasizes that timing is critical ('time is of the essence'), then the landlord may be justified in charging late fees for rent paid past that specific hour. However, without such specificity, charging a late fee for rent that is only an hour late could potentially be seen as a breach of the implied duty of good faith and fair dealing.