Does MN require a grace period before impsoing a late fee?

[John Woodrich]

I inherited some leases and they all provide for payments being due on the 1st of the month and that a late fee will be assessed if they have not paid by the 5th.  So inherently they all normally pay on the 5th....

I need to present new leases anyhow but I can't find anything that stipulates a grace period is required.  Can anyone confirm whether MN requires a grace period or whether I can charge a late fee on the 2nd?  

Thanks,

John

[Brad Schaeppi]

John.  

Good question.  I assume you aim to switch Minnesota residential, month to month tenants onto new month to month leases or new term leases as the existing term leases expire.  So long as you provide written notice to the tenant greater than the notice to vacate provision, you are free to require the new leases upon renewal.  There is no Minnesota state law against assessing a late fee on the 2nd (1 day later).  I can say based upon reviewing hundreds of leases across many companies and properties, Due on 1st and late on 3rd (after 2nd) is most common.  If you have manual checks or drop boxes, this extra day may be best to avoid conflicts over the charge.  If you require online payment or ACH, this 1 day grace period may be less of a practical issue.  If I were in your shoes, I would stick to late "after 2nd" and the maximum 8.0% late fee.  At the end of the day, this is a management decision and what "tone" a management company or landlord wishes to take with its tenants.  Good luck to you!