Late rent notices in Texas after SB 38: notice to vacate, late fees and delivery rules

What changed on January 1, 2026

Senate Bill 38, signed in June 2025, rewrote much of the Texas eviction process, and most of it took effect on January 1, 2026. For a property manager handling late rent, the changes to Property Code section 24.005 are the ones to build into every notice.

The basic rule stays. A landlord must give a tenant at least three days' written notice to vacate before filing an eviction suit, unless the written lease sets a shorter or longer period. The form of that notice now depends on the tenant's history. If the tenant's right of possession ends solely for nonpayment and the tenant was not late before the month of the notice, the notice must be a notice to pay rent or vacate. A tenant who was late in an earlier month may receive either a notice to pay rent or vacate or a notice to vacate.

SB 38 also repealed the old delivery subsections and replaced them with a new list of methods, covered below. New subsection (c-1) deals with federal notice rules as a matter of Texas law. A landlord who meets the state notice is not required by Texas law to delay filing, and a writ of possession cannot be served until the federal notice period has run. Federal rules for covered properties set their own conditions on service and filing, covered below.

The late fee test

Late fees run on an older statute, Property Code section 92.019, which SB 38 left alone. A landlord may charge a late fee only if notice of the fee is in a written lease, the fee is reasonable, and some rent has remained unpaid two full days after the date it was originally due.

The statute gives a safe harbor for reasonableness. A fee of no more than 12% of the rent for the rental period is reasonable for a dwelling in a structure with four or fewer units, and no more than 10% for a structure with more than four units. A higher fee is reasonable only up to the landlord's uncertain damages from the late payment, which is harder to show. A landlord who violates the section owes the tenant $100, three times the late fee collected in violation and reasonable attorney's fees. A tenant may also ask for a written statement of the late fees owed under section 92.0191.

The statute treats an initial fee and any daily fees as a single late fee. An agent can add them together and check the total against the lease and the safe harbor before it posts. A total above the safe harbor is flagged so someone reviews the landlord's damages basis before anyone collects it.

Choosing the notice and delivering it

For each delinquent account, the choice of notice turns on the payment history. A tenant who had never paid late before this month gets a notice to pay rent or vacate. A tenant who paid late in an earlier month can receive either form, as your policy decides. That history lives in the ledger, and reading it account by account is where first-week hours go.

Subsection (f-3) now lists the delivery methods, and subsection (f-4) says the method rules do not apply if the tenant actually receives the notice:

• Mail, including first class, registered or certified mail, or a delivery service
• Delivery to the inside of the premises in a conspicuous place
• Hand delivery to any tenant of the premises who is 16 or older
• Email or other electronic means, only if the parties agreed in writing

Keeping a delivery record

Your notice workflow should store which method was used and when, and for electronic delivery it should point to the tenant's signed agreement to receive notices that way. Many Texas landlords use the Texas Apartment Association's lease forms, so check what your lease version says about notice periods and electronic notices before you build the template. Hand delivery and posting inside the unit need staff on site, so the agent's part there is to prepare the notice and the delivery record for the person who carries it.

Federal overlays for assisted and federally backed properties

Some properties carry federal notice rules on top of the state notice. HUD's rule for properties with project-based rental assistance, 24 CFR 247.4 as amended in December 2024, says a termination notice for nonpayment is effective no earlier than 30 days after the tenant receives it and must itemize the rent owed by month. The landlord may not file an eviction if the tenant pays the amount owed within that period.

HUD published an interim final rule in February 2026 to revoke that 30-day requirement. In March 2026 it delayed the effective date indefinitely and said it would treat the rule as a proposed rule. As of the October 2026 eCFR, the 30-day text was still in the regulation. Check its status before you rely on either version.

The CARES Act also contains a 30-day notice to vacate for covered dwellings, which include properties in certain federal housing programs and properties with federally backed mortgages. Whether and how that provision applies to your properties is a question for your counsel. For federally covered properties, counsel should confirm the service requirements and the earliest filing date. The workflow tracks those dates separately from the writ date and flags each property that may carry a federal notice period, so the manager sees it before signing.

What an agent prepares and what a manager signs

Late rent suits an agent because every check is written down somewhere: in the lease, the ledger, the statute or the property's funding. The agent reads each delinquent account, works out which checks apply and drafts the notice. The manager reads the checks before signing and decides anything that needs judgment.

Some accounts always go to a person, such as a resident who mentions a disability, military service, a payment plan or a dispute about the amount. So does any decision to file. The agent's job is to make the routine notices fast and to make sure those accounts are seen first.

Worked example: first-week delinquency at a 3,000-unit portfolio

This is an illustrative example with assumed numbers, not a client result. Take a Texas portfolio of 3,000 units where about 6% of residents, 180 accounts, are unpaid after the grace period each month. Assume 10% of the units are in properties with HUD assistance or federally backed mortgages, and 60% of residents have agreed in writing to electronic notices.

By hand, each account takes about 15 minutes for the ledger review, the payment history, the lease clause, the federal check, the notice and the delivery record. That is 2,700 minutes, or 45 staff hours a month, almost all of it in the first week.

Assume 150 accounts are routine. With the agent preparing them, a manager spends about 4 minutes reviewing and signing each, 600 minutes in all. The other 30, including payment plans and assisted properties, still take 15 minutes each, another 450 minutes. Monthly time falls to 1,050 minutes, or 17.5 hours, which gives back 27.5 staff hours a month, most of them in the busiest week.

For one routine account, the manager would see the checks laid out. In this example the tenant had never paid this landlord late before this month, so the notice is a notice to pay rent or vacate. The assumed late fee, initial and daily fees combined, is 8% against the 10% safe harbor for a building with more than four units. Written consent to email is on file, and the property has no federal overlay. Reading that takes about a minute.

Starting small with late rent notices

Take last month's delinquency report for one property. Have the manager note which notice each account received and how long it took. Write down the late fee policy and list the properties with federal overlays. Then run an agent on copies of those accounts, with nothing delivered, and compare its notices and checks with what went out.

Our five-day AI Workflow Sprint does that on your redacted documents for $2,500, with a full refund if we do not find 10 staff hours a week.

This article is general information, not legal advice. Eviction practice in Texas also depends on the Texas Rules of Civil Procedure and on your lease, so have your counsel review your notice templates.

Common questions