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Bill to cap rental late fees at 8% of rent draws mixed testimony
Summary
Senate Bill 2236 would cap rental late fees at 8% of the monthly rent, sponsor Ryan Brownberger told the Senate Industry and Business Committee; supporters said the cap would prevent fee “snowballing” while landlords warned it would constrain normal accounting and business practices.
Senator Ryan Brownberger told the committee Senate Bill 2236 proposes an 8% cap on late fees for rent for a single monthly period — the sponsor described the proposal as a compromise that would permit landlords to collect reasonable late-payment charges while preventing compounded or excessive fees.
"This basically will address issues regarding compounded fees," Brownberger said. "We thought 8% was a good compromise in between the two." He said the cap applies per monthly period and that landlords could still assess multiple fees in a month so long as the total for that month did not exceed 8% of rent.
Supporters included Cody Schuler of the ACLU and an online witness from High Plains Fair Housing Center. High Plains provided an audit of leases showing wide disparities in late-fee amounts — examples in testimony ranged from $10 to $100 plus recurring weekly charges in the groups' database — and argued that cumulative late fees can push cost-burdened renters into eviction and create long-term barriers to obtaining housing.
Opponents included the North Dakota Apartment Association, which said late fees are a contractual term set in the lease and that landlords face variable, real-world costs (mortgages, insurance, utilities, vendor invoices and payroll) that justify flexible fee structures. The association's lobbyist said typical standardized leases in North Dakota already specify an order of application for payments and noted the industry generally does not treat late fees as a revenue stream but as a deterrent to late payment.
Committee members and witnesses discussed overlaps with other bills heard in the same sequence (priority-of-payment and oversight bills) and asked about enforcement, grandfathering of existing leases and potential unintended consequences, including higher rents or different accounting practices.
The committee heard multiple experts and advocates on both sides of the issue and then closed the hearing; no committee vote on SB 2236 was recorded during the session.
