Unless I'm missing something, that case is based on bad math. A 4% late fee per month results in a 4% late fee per year. For example, assuming a $2,000 monthly fee, a 4% late fee is $80/month. After a year, the total late fee is 12 * $80 = $960, or 4% of a yearly $24,000 fee. (Unless, of course, the penalty for being late on a monthly payment was 4% of the total yearly fee, i.e., $960 payment each month. But I doubt that's what happened.)

It is per month and then times 12. That total (even if only charged for one month) cannot total more than 25% or it is unenforceable. IE 4% x 12 - 48%

The court case overrides your fuzzy math.

[Disclaimer: I Am Not A Lawyer, I'm just married to one]

I read the pleadings available online. I believe this is the salient section from the request for summary judgment:

"Even if, arguendo, defendant's guaranty were an instrument for the payment of money only, plaintiff failed to establish as a matter of law that it was entitled to the amount it seeks. Most of this amount consists of late fees, which the rent history that plaintiff submitted with its opening papers shows were 4% per month, i.e., 48% per year."

My interpretation of this is that each month the defendant was charged a 4% penalty that was calculated based on the entire *annual* rental amount. This would square with DM's interpretation that the *total* amount of the penalty was 48%. Since we don't have access to the papers in which the penalty calculations are laid out, it is impossible to tell how the amounts were arrived at.

Maintenance late fees, on the other hand, are calculated based on the amount of the *monthly* maintenance that is late, and not on the total *annual* maintenance for the co-op apartment.

So if the monthly maintenance is $1,000 and the late penalty is 5%, the amount of the penalty is a constant $50/month. Over 12 months it would amount to a total of $600 for a 12 month maintenance obligation of $12,000. $600 penalty on a $12,000 obligation is still 5%.

Otherwise I'm as befuddled as BBCA

Why would you not pay the $1000 for a year? That makes no sense.
Look the bottom line is that 4% for any single month is not enforceable. The total of 4% x 12 months is 48%.

You cannot legally do it. Late fees are not a way for a cop to make money. They are to recoup any damages caused by the late payment.

The court held that New York’s usury statute that an interest charge of more than 25% per year is a criminal offense determined such fees as unenforceable.