Legal Question in Landlord & Tenant Law in California

That's the trouble with what you think you know about the law. If you haven't actually read the law, and don't understand the difference between the actual law and secondary sources that often misstate the law, you're often wrong. It is perfectly legal to charge a late rent fee on residential rentals. There are limits on how much it can be, but even those are pretty vague. It cannot be so excessive as to be a penalty, rather than a reasonable compensation for the costs and expenses of the late rent. Generally 5% is fine, and 10% is hard to support but can be charged if proved to be reasonable. In between is usually upheld. The exact same rules apply to commercial leases.