Sheikh `Abd Allah b. Ibrâhîm al-Nâsir, professor at King Sa`ûd University
It is permissible to rent out property to others. However, stipulating that a late fee must be paid in the event of a failure of the lessee to make a timely payment is unlawful.
Such a late charge would be a form of interest. The unpaid rent is effectively a debt owed by the lessee to the landlord. In Islamic Law, a debt that is owed by someone can neither be postponed for a higher amount nor penalized with a fee.
And Allah knows best.
Source: Islam Today