Therefore, landlords must use good judgment and set the late fee at a reasonable amount. Under California Civil Code section 1671, late fees may be considered liquidated damages, the damage being the late rent payments. However, late fees are not considered damages that can be deducted from a security deposit. Late fees also are not collectible as part of the eviction process. In other words, landlords cannot ask for late fees as part of the amount owed as past due rent.