California Civil Code
(a) A charge that may be imposed for late payment of an installment due on a loan secured by a mortgage or a deed of trust on real property containing only a single-family, owner-occupied dwelling, shall not exceed either (1) the equivalent of 6 percent of the installment due that is applicable to payment of principal and interest on the loan, or (2) five dollars ($5), whichever is greater. A charge may not be imposed more than once for the late payment of the same installment. However, the imposition of a late charge on any late payment
does not eliminate or supersede late charges imposed on prior late payments. A payment is not a “late payment” for the purposes of this section until at least 10 days following the due date of the installment.
(b) A late charge may not be imposed on any installment which is paid or tendered in full on or before its due date, or within 10 days thereafter, even though an earlier installment or installments, or any late charge thereon, may not have been paid in full when due. For the purposes of determining whether late charges may be imposed, any payment tendered by the borrower shall be applied by the lender to the most recent installment due.
(c) A late payment charge described in subdivision (a) is valid if it satisfies the requirements of this section and Section 2954.5.
(d) Nothing in this section shall be
construed to alter in any way the duty of the borrower to pay any installment then due or to alter the rights of the lender to enforce the payment of the installments.
(e) This section is not applicable to loans made by a credit union subject to Division 5 (commencing with Section 14000) of the Financial Code, by an industrial loan company subject to Division 7 (commencing with Section 18000) of the Financial Code, or by a finance lender subject to Division 9 (commencing with Section 22000) of the Financial Code, and is not applicable to loans made or negotiated by a real estate broker subject to Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code.
(f) As used in this section, “single-family, owner-occupied dwelling” means a dwelling that will be owned and occupied by a signatory to the mortgage or deed of trust
secured by the dwelling within 90 days of the execution of the mortgage or deed of trust.
(g) This section applies to loans executed on and after January 1, 1976.