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 Vermont, the written lease agreement is indeed a crucial document outlining the rights of residential tenants and the responsibilities of landlords. Vermont law encourages written leases to ensure clarity and provide legal protection for both parties. While oral agreements are legal, they offer less security and proof of the agreed terms. Tenants should thoroughly review and understand the lease before signing. Regarding late fees, Vermont's landlord-tenant laws stipulate that any late fees must be reasonable and are governed by the terms of the written lease agreement. Vermont law does not specify a maximum late fee but does require that fees not be punitive and reflect actual costs incurred by the landlord. The state's contract law also includes an implied covenant of good faith and fair dealing, which means that landlords must exercise fairness in charging late fees and cannot penalize tenants for minor delays in rent payment that do not cause significant harm. A lease specifying a precise time for rent payment and emphasizing that time is of the essence would be an exception, allowing the landlord to impose late fees for even slight delays as agreed upon in the lease.