Oregon Commercial Late Fees & Rent Arrears

Oregon's structured residential late fee rules (ORS 90.260—the 4-day grace period, capped flat/per-diem fees) do not apply to commercial leases. Commercial landlords have significantly more contractual freedom to define late payment penalties.

Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a licensed attorney in Oregon for advice specific to your situation. Information last verified: March 2026.

Contractual Freedom

Oregon commercial landlords can negotiate late fee structures in the lease, subject to the general contract law requirement that fees represent a reasonable pre-estimate of damages (liquidated damages) rather than an unenforceable penalty.

Common structures include:

• Flat Percentage Fee: A one-time fee of 5-10% of the overdue amount.
• Default Interest: An interest rate applied from the due date until paid (commonly 12-18% per annum).
• Per-Diem Charges: A daily fee for each day rent is late.

No Statutory Grace Period

There is no statutory grace period for commercial rent in Oregon. Rent is due on the date specified in the lease. Pragmatic landlords often include a 3-5 day grace period in the lease.

No "Exclusive Remedy" Limitation

Unlike residential leases (where late fees are the exclusive remedy), commercial landlords can charge late fees and default interest on the same overdue balance, and can also pursue lease termination for persistent non-payment.

Landlord Remedies

1. Written Notice of Default: Serve a notice specifying the amounts owed.
2. FED Action: File a Forcible Entry and Detainer complaint for eviction.
3. Money Judgment: Seek a court judgment for all unpaid rent, late fees, default interest, and attorney's fees.
4. Security Deposit/LOC Claim: Apply the deposit or draw on the LOC.

Best Practices

1. Draft Clear Default Provisions: Specify the exact late fee, default interest rate, and when each applies.
2. Enforce Consistently: Don't waive fees selectively—this weakens your position.
3. Maintain Detailed Ledgers: Accurate records are essential for court proceedings.

How Landager Can Help

Landager automates commercial rent collection and arrears management for your Oregon properties, applying the late fee and default interest rates specified in each lease and alerting you when a tenant crosses the default threshold.

Back to Oregon Commercial Laws Overview.