What is the maximum allowable late fee that can be charged for rent in South Dakota?

In South Dakota, the law does not explicitly outline a maximum allowable late fee; however, it is common practice to charge a late fee that aligns with a reasonable percentage of the rent due. Charging a late fee of 5% of the rent payment is widely accepted and is seen as a fair compromise between discouraging late payments and not being punitive towards tenants.

This figure falls within industry standards observed in various states, where late fees are typically set to encourage timely payment without being overly burdensome on tenants. A fee of more than 5% could be considered excessive unless justified by specific circumstances outlined in the lease agreement and agreed upon by both parties.

Furthermore, late fees are generally enforceable as long as they are stated in the lease agreement, agreed upon by the tenant, and comply with any relevant local laws or real estate practices. Therefore, 5% strikes an appropriate balance and is the right answer in this context, as it aligns with the common practices within property management in South Dakota.