Possibly Grounds For Objection
Washington State does not have specific statutes regulating the amount of late fees that can be charged on rental real estate unlike many other states. It is notable, however, that this late fee would exceed the amount allowed in many states that set specific dollar or percentage limitations on late fees.
So, there are two main possible grounds to dispute the validity of this term in your lease, but the first one, because it is more specific, probably controls relative to the other two.
Usury Law Violations
One would be the statute prohibiting usury (i.e. the charging of excessive interest rates on debts). In Washington State, this is R.C.W. Chapter 19.52.
At some point, excessive late fees start to be considered disguised interest charges which if they are above the usury rate are void for violation of that law.
A combination of statutory and case law exceptions may define where that line is drawn. Also, usury rates are often different for different kinds of debts and are often different in the consumer and non-consumer context.
Even if this late fee does not facially violate state usury laws because it would not be too high in a case where the entire rent payment was not made, it might be an as applied violation in the case of a late fee on a large rent payments that was only minimally short, as in this case.
The usury law contains an exception for consumer leases (which isn't entirely clear upon whether this applies to residential real property leases or only leases of personal property) at R.C.W. 19.52.010, which states:
(2) A lease shall not be considered a loan or forbearance for the
purposes of this chapter if:
(a) It constitutes a "consumer lease" as defined in RCW 63.10.020;
(b) It constitutes a lease-purchase agreement under chapter 63.19 RCW;
(c) It would constitute such "consumer lease" but for the fact that:
(i) The lessee was not a natural person; (ii) The lease was not
primarily for personal, family, or household purposes; or (iii) The
total contractual obligation exceeded twenty-five thousand dollars.
The fact that a "consumer lease" is defined under R.C.W. 63.10.020(4) as a lease of personal property favors an interpretation that the usury statute is not intended to apply to residential real property leases although it is not definitive on that point because that kind of lease is excluded merely because it is regulated in a separate statute. R.C.W. 63.10.020(4) defines a consumer lease as follows:
(4) The term "consumer lease" means a contract of lease or bailment
for the use of personal property by a natural person for a period of
time exceeding four months, and for a total contractual obligation
not exceeding twenty-five thousand dollars, primarily for personal,
family, or household purposes, whether or not the lessee has the
option to purchase or otherwise become the owner of the property at
the expiration of the lease, except that such term shall not include
any lease which meets the definition of a retail installment contract
under RCW 63.14.010 or the definition of a lease-purchase agreement
under chapter 63.19 RCW. The twenty-five thousand dollar total
contractual obligation in this subsection shall not apply to consumer
leases of motor vehicles. The inclusion in a lease of a provision
whereby the lessee's or lessor's liability, at the end of the lease
period or upon an earlier termination, is based on the value of the
leased property at that time, shall not be deemed to make the
transaction other than a consumer lease. The term "consumer lease"
does not include a lease for agricultural, business, or commercial
purposes, or to a government or governmental agency or
instrumentality, or to an organization.
On the other hand, there is no clear statutory exception to usury laws in Washington State for amounts overdue on real estate leases either.
Common Law Restrictions On Liquidated Damages Clauses
The other would be the common law doctrine distinguishing between "liquidated damages" and "penalties". In the common law of contracts, if there is harm from a breach of the contract that is difficult to quantify (e.g. in the case of a landlord, the possible need to get a short term loan to handle the mortgage payment on the property, or the need to hire someone to send a demand letter to the tenant to make a payment and possibly review the lease and confer with a lawyer even if the late payment is ultimately paid before a lawsuit is filed, the harm to a landlord if everyone routinely pays a few days late), it is permissible to set a liquidated damages penalty to address that difficult to quantify harm so long as it is reasonable and proportionate and contractually agreed to by the parties.
But, if there is no difficulty involved in quantifying damages and the liquidated damages clause exceeds this amount, or if the liquidated damage amount is disproportionate to the difficult to exactly quantify harm, it is void as a "penalty" because it violates public policy for private party contracts to impose penalties (which are usually the exclusive right of the state to impose) without statutory authorization.
This validity analysis is typically conducted on a case by case basis, so precedents on this issue have value only if they are factually similar.
I have no reviewed Washington case law on this point to determine if there are cases addressing similar fact patterns.
This late fee analysis probably would be informed by the statutory authorization for late fees for leases of self-storage units, which states:
Any late fee charged by the owner shall be provided for in the rental
agreement. No late fee shall be collected unless it is written in the
rental agreement or as an addendum to such agreement. An owner may
impose a reasonable late fee for each month an occupant does not pay
rent when due. A late fee of twenty dollars or twenty percent of the
monthly rental amount, whichever is greater, for each late rental
payment shall be deemed reasonable, and shall not constitute a
This statute seems to reinforce the general analysis that a one time late fee may be valid under general principles as a liquidated damages amount, but that the daily additional late fee is on weaker grounds as a liquidated damages amount because it looks functionally a lot more like interest in excess of the usury rate.
But, the law isn't always mathematical or logical, and often de minimis amounts that are an extraordinarily high percentage interest rate equivalent are still tolerated. So, this would be, at best, a close call under a liquidated damages/penalty analysis because the absolute amount of $10 a day is modest relative to the total rent obligation for a month, even though it is high relative to the amount of the actual shortfall. Court's often allow liquidate damages provisions that provide only rough justice.
Lack Of Notice Is Not Defense Unless The Lease Expressly Provides For It
Notice of imposition of a late fee is not required, unless the lease expressly provides for notice to be given before a late fee is imposed which would be unusual but not entirely unheard of (I have written such clauses in large commercial leases on behalf of tenant clients).
The presence of the amount of the monthly rent, the date the rent is due, the existence of the late fee, and the means by which the late fee is determined, is sufficient. The tenant has notice of the amount paid and would not be relieved of his own negligence for failing to notice a discrepancy between the amount paid and the amount owed when he wrote the check.
Often notice would be required under a lease, however, before commencing an eviction based upon failure to pay a late fee or being short on rent, often with some opportunity to cure that default by paying the rent shortfall and paying the late fee.
The list of matters for which the landlord is statutorily required to give notice before enforcing is found at R.C.W. 59.18.130.
It wouldn't hurt to ask the landlord to waive some or all of the late fee arising from an honest mistake. But, a couple of hundred dollar late fee incurred before the shortfall was paid would probably hold up in court.
I am not convinced that RCW 59.18.140 (requiring that a tenant honor reasonable requirements) is applicable to late fees as that statute seems to pertain to use of the premises. Likewise I am not sure that RCW 59.18.285 (requiring non-refundable fees to be disclosed in writing) applies as that seems to pertain to application fees before a lease is signed.
Late fees of 5% to 20% of the total amount of the payment due (even if the shortfall is a fraction of that amount) are customary (or at least, not unusual) in leases.
But, the fact that additional amounts are assessed each day, in particular, makes those amounts look a lot like interest, so an usury law analysis could invalidate some portion of those daily additional amounts in particular, particularly if this is a residential lease. Honestly, however, the cost of usury litigation and future conflict with the landlord would make it impracticable to fight a $200 late fee, some of which is probably valid, on this ground.
Often, a small amount like $150 or $200 relative to the total amount of rent due under the lease, would not be considered excessive liquidated damages even if on a strict mathematical basis, the percentage of deemed interest rate is huge (the same somewhat illogical reasoning is applied to set up fees in payday and title loans for small dollar amounts).
On the other hand, if the late fee had grown to thousands of dollars on a $30 shortfall, a court would probably find it to have become unreasonable.
It is also worth noting that if the late fee is paid, that a suit to recover it since it was not actually owed because it is illegally imposed is not allowed in Washington State. So, if it is disputed, it must be disputed up front and not in a refund suit after paying it which would avoid the risk of an eviction action over $230.