Is there a legal limit on late fees in Indiana?

No statutory cap (see reasonableness standard and notes). Contract law supplies the only standard: a late fee is enforceable if it reasonably approximates the landlord's actual loss, and void as a penalty if it does not. Indiana has no statutory formula, percentage, or dollar cap, and cities and towns may not set one by ordinance.

Can a landlord charge a daily late fee in Indiana?

Daily late fees are allowed if the lease provides for them. No Indiana statute addresses fee structure, so the only brake is liquidated-damages doctrine, and accrual stops when the lease term ends.

What late fees can a landlord charge in Indiana?

Verified July 10, 2026 All Indiana topics →

Indiana has no statutory cap on residential late fees and no mandated grace period — a lease-based late fee can start accruing the day after rent is due, and the only statewide limit is the contract-law rule that a late fee must be a reasonable estimate of the landlord's loss rather than a penalty.

Cited to IC 32-31-1-6 and 2 more Indiana statutes · Verified July 10, 2026

The Indiana Court of Appeals' Gershin v. Demming decision is the touchstone: late fees are liquidated damages, enforceable when proportionate and only for the duration of the lease term. The 10-day notice in IC 32-31-1-6 is not a grace period — it is the pay-or-quit cure window for a nonpayment eviction (the landlord may terminate on not less than 10 days' notice unless the tenant pays in full first), and a late fee can lawfully accrue during those same 10 days. Local governments cannot step in: IC 32-31-1-20(c)(7) preempts any city or town ordinance regulating fees charged by landlords. Reports of a pending Indiana '$50 late fee cap' law are false — no such bill exists in the 2025 or 2026 General Assembly records.

Indiana late fees at a glance

Statutory cap	No statutory cap (see reasonableness standard and notes)
Mandatory grace period	None mandated statewide
Must be in the lease	Not addressed by statute
Daily fees	Daily late fees are allowed if the lease provides for them. No Indiana statute addresses fee structure, so the only brake is liquidated-damages doctrine, and accrual stops when the lease term ends. No statute addresses fee structure. Daily late fees are a lease-drafting matter policed by liquidated-damages doctrine; Gershin v. Demming, 685 N.E.2d 1125 (Ind. Ct. App. 1997) both upheld a modest lease late fee as valid liquidated damages and cut it off at the end of the lease term — once the term ends, continued nonpayment is compensated by actual damages, not accruing late fees.
Reasonableness standard	Contract law supplies the only standard: a late fee is enforceable if it reasonably approximates the landlord's actual loss, and void as a penalty if it does not. Indiana has no statutory formula, percentage, or dollar cap, and cities and towns may not set one by ordinance. Contract-law reasonableness only: Indiana courts treat lease late fees as liquidated-damages clauses, enforceable if they reasonably approximate the landlord's loss from delayed payment (loss of use, interrupted cash flow) and unenforceable as penalties if disproportionate (Gershin v. Demming, 685 N.E.2d 1125 (Ind. Ct. App. 1997)). No statutory formula, percentage, or dollar cap exists anywhere in Title 32, and IC 32-31-1-20(c)(7) forbids cities and towns from capping 'any fee charged by a landlord' by ordinance.

Cite this page: "Landlord Atlas, Indiana Late Fee Laws (verified July 10, 2026), landlordatlas.com/laws/late-fees/indiana/" — free to cite and quote with a link (how these records are verified). Every figure above is cited to the Indiana statute in the citations section below.

Check a late fee against the Indiana rules — free, no signup, built on the same verified Indiana rules as this page.

Notes and caveats

Both blank answers are genuine absences — Indiana regulates neither the amount of a late fee nor its timing — no statutory cap and no statutory grace period exist.
Why 'must be in lease' has no statutory answer rather than a yes — No statute imposes the requirement. The writing/agreement requirement flows from ordinary contract law — a fee never agreed to is simply not a contract term — unlike Arizona's statutory writing rule.
The 10-day notice is not a grace period — Listicle sites routinely recast the 10-day pay-or-quit notice (IC 32-31-1-6, statutory form at IC 32-31-1-7, unamended since P.L.2-2002) as a grace period. It is an eviction cure window and does not defer late-fee accrual.
The 'pending $50 cap bill' is fabricated — A circulating claim (rentlatefee.com and syndicated copies) that Indiana has a pending bill capping late fees at $50 per late payment matches no bill in the 2025 or 2026 General Assembly sessions. Treat it as fabricated until a bill number surfaces.
Rent-to-own late-charge rules do not apply to housing — Some charts borrow the rental-purchase late-charge rules of IC 24-7-5-5, which govern rent-to-own consumer goods. That article does not govern residential leases.
Gershin's two usable holdings — Gershin v. Demming, 685 N.E.2d 1125 (Ind. Ct. App. 1997), yields two usable holdings: a proportionate lease late fee was upheld as valid liquidated damages, and accrual stops at the end of the lease term.

Common questions: Indiana late fees

Each answer is the verified value from the table above, restated as a direct answer. Free to quote with a link to this page.

Is there a legal limit on late fees in Indiana?: No statutory cap (see reasonableness standard and notes). Contract law supplies the only standard: a late fee is enforceable if it reasonably approximates the landlord's actual loss, and void as a penalty if it does not. Indiana has no statutory formula, percentage, or dollar cap, and cities and towns may not set one by ordinance.
Is there a grace period before rent is late in Indiana?: None mandated statewide.
Does a late fee have to be written into the lease in Indiana?: Not addressed by statute.
Can a landlord charge a daily late fee in Indiana?: Daily late fees are allowed if the lease provides for them. No Indiana statute addresses fee structure, so the only brake is liquidated-damages doctrine, and accrual stops when the lease term ends.

Statute citations

IC 32-31-1-6 (verified 2026) Official source
IC 32-31-1-20 (c)(7) (verified 2026) Official source
IC 32-31-1-6 (mirror) (verified 2026) Unofficial mirror

How this record was verified: Official-host verbatim reads on the iga.in.gov 2025 code viewer, completed 2026-07-10: IC 32-31-1-20 in full (subsections (a)-(c), the seven-item enumerated list in (c), the void-and-unenforceable clause, and the history line 'As added by P.L.2-2002, SEC.16. Amended by P.L.266-2017, SEC.1; P.L.168-2020, SEC.17; P.L.215-2021, SEC.1'), IC 32-31-1-6, and IC 32-31-1-7 — all matching the previously recorded mirror-verified text with no substantive differences. SEA 148-2020's designation was pinned from the official iga.in.gov bill record: vetoed 2020-03-25, veto overridden Senate 2021-02-08 (Roll Call 64: 30-17) and House 2021-02-17 (Roll Call 159: 67-33), 'Public Law 168' entered 2021-02-17; the code viewer cites it as P.L.168-2020. Original verification basis (2026-07-09): Indiana's official code viewer requires interactive access, so text was verified on two independent code mirrors and reconciled verbatim: FindLaw (codes.findlaw.com, 'current as of January 01, 2026') and Justia's archived official-text PDFs of IC 32-31 chapters 1, 3, and 5 (statecodesfiles.justia.com, 2013 edition, carrying the official 'As added by P.L.' history lines). Sections double-read across both hosts with figures matching verbatim: IC 32-31-3-12, 32-31-3-14, 32-31-3-15, 32-31-3-16 (45-day deadline, forfeiture rule, attorney fees), 32-31-5-4 (30-day modification notice), 32-31-5-6 (entry, all subsections), 32-31-1-1, 32-31-1-2, and 32-31-1-4 (termination-notice periods); 32-31-3-12/-14/-15/-16 were additionally read on law.onecle.com. IC 32-31-1-20 (preemption) was read verbatim on FindLaw (current through Jan. 1, 2026) and in the pre-amendment 2013 official text; the current-text official-host read was completed 2026-07-10 (see above). Scope sections IC 32-31-2.9-1/-3/-4, 32-31-5-1, and 32-31-5-3 read on FindLaw/2013 PDF. 2025-2026 session sweeps (IGA subject list 'Landlords and Tenants', LegiScan) on 2026-07-09 found no enacted change to any answer in this record; 2026 bills SB 127 and HB 1435 died at the session's March 2026 sine die adjournment, and HEA 1001-2026 (signed) addresses zoning/permitting only.