Which statement best describes service charges and late fees?

• A. Late charges are penalties and always unenforceable.
• B. The lease must specify late charges, linked to additional costs and servicing; if reasonable, the lessor may charge interest on amounts not received.
• C. There can be any arbitrary late charges.
• D. No late charges allowed.

Answer: (B)

Late charges inside a lease must be clearly spelled out and tied to the landlord’s actual costs for handling a late payment and providing servicing. The best answer states that the lease should specify late charges and connect them to added costs, and that if the amount is reasonable, the landlord may charge interest on overdue amounts. This reflects how charges work in practice: they’re not arbitrary penalties, but costs tied to administration and the time value of money. Other options misstate the reality—late charges aren’t automatically unenforceable, arbitrary charges aren’t allowed, and some late charges are permitted—so saying none are allowed would be incorrect.