| Quick Facts | Answer |
| Maximum / Limit | No limit |
| Receipt Requirement | Yes |
| Inventory Requirement | None |
| Interest Requirement | 1% |
To learn about laws on security deposit returns in Minnesota, click here.
Maximum Security Deposit Allowed in Minnesota
Minnesota state law does not limit the maximum security deposit, but local jurisdictions can establish their own limits, like in Minneapolis. Always check local laws.
Minneapolis law, for example, limits the maximum security deposit to one month’s rent (or one-half month’s rent, if the landlord collects more than the first month’s rent in advance).
Can Landlords Charge an Additional Pet Deposit in Minnesota?
Yes, landlords can collect an additional pet deposit in Minnesota, except for service dogs and emotional support animals.
If a landlord collects a pet deposit in Minnesota, it must be handled according to the same rules as a security deposit.
How Much Rent Can a Landlord Collect Upfront in Minnesota?
There is no limit on the amount of rent that can be collected upfront in Minnesota. Many states have a limit on the amount of rent that can be collected at once, but Minnesota does not.
Security Deposit Collections in Minnesota
While other states have additional requirements for landlords that collect a security deposit, such as providing certain documentation of the condition of the unit at move-in, Minnesota does not.
Do Landlords Have To Provide a Receipt for the Security Deposit in Minnesota?
Minnesota law doesn’t specify a receipt requirement for security deposits in particular. Landlords must provide a receipt for any payments made in cash, which may include a security deposit.
What Obligations Do Landlords Have To Establish the Condition at Move-in in Minnesota?
Minnesota law does not require landlords to document or establish the property’s condition at move-in. While other states legally require a written inventory of damages to be completed when collecting a security deposit, Minnesota does not.
Security Deposit Holdings in Minnesota
Minnesota law does not require landlords to hold security deposits separate from other funds.
Are Tenants Entitled to Interest on Their Security Deposit in Minnesota?
Minnesota law does require landlords to provide interest on held security deposits. The minimum interest rate is 1% per year. However, landlords are not required to provide interest if the accrued amount at the end of the lease term is less than $1.
Interest accrues starting on the first day of the next month following the payment of the security deposit. The accrual of interest ends on the earlier of either:
- The last day of the month in which the landlord returns any remaining portion of the security deposit, or
- The exact date of the entry of a judgment for the security deposit
So for example, if a landlord collects a security deposit on January 15th and returns it on December 10th, interest accrues from February 1st to December 31st.
How Are Security Deposits Accounted for in Minnesota?
Security deposits are not considered taxable income when they are collected.
What Happens to a Security Deposit When the Property is Sold in Minnesota?
When a property is sold in Minnesota, the landlord has 60 days after the transfer of ownership to either:
- Transfer the security deposit and interest to the new owner and notify the tenant in writing, or
- Return the security deposit and interest to the tenant
In either case, the original landlord can make any allowed deductions first. If a tenant’s lease term ends within the 60-day period, the landlord must instead return the security deposit to the tenant within 21 days.
If the original landlord chooses to make deductions and then transfer the security deposit to their successor, they must notify the tenant in writing of the amount transferred (after deductions) and the successor’s name and address.
The notice must include a postage-paid envelope addressed to the successor. If the tenant does not object to the amount within 20 days, the successor is only liable to the tenant for the amount transferred.
Sources
- 1 Minneapolis Code of Ord. § 244.2040(b)
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No landlord shall demand, charge, accept, or retain from a tenant more than a single month rent as a security deposit. Provided, however, if the lease or other agreement requires the tenant to pay before the tenancy starts or any time prior to the end of the first month of tenancy more than the first installment of rent plus the deposit, then the landlord shall not demand, charge, accept, or retain more than one-half (½) of a single month rent as a security deposit. In this situation, no landlord shall deny a tenant’s request to pay the security deposit in installments over a period of up to three (3) months in installment amounts reasonably requested by the tenant. For dwelling units subject to a referral between the landlord and non-profit service provider or government agency, the maximum security deposit amount is limited to one and a half (1½) of a single month rent. Any security deposit furnished herein shall be governed by the provisions of Minnesota Statutes Section 504B.178, together with this section.
Source Link - 2 Minn. Stat. § 504B.178(1) & (2)
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Subdivision 1. Applicability. Any deposit of money, the function of which is to secure the performance of a residential rental agreement or any part of such an agreement, other than a deposit which is exclusively an advance payment of rent, shall be governed by the provisions of this section.
Subd. 2. Interest. Any deposit of money shall not be considered received in a fiduciary capacity within the meaning of section 82.55, subdivision 26, but shall be held by the landlord for the tenant who is party to the agreement and shall bear simple noncompounded interest at the rate of one percent per annum , computed from the first day of the next month following the full payment of the deposit to the last day of the month in which the landlord, in good faith, complies with the requirements of subdivision 3 or to the date upon which judgment is entered in any civil action involving the landlord’s liability for the deposit, whichever date is earlier. Any interest amount less than $1 shall be excluded from the provisions of this section.
Source Link - 3 Minn. Stat. § 504B.118
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A landlord receiving rent or other payments from a tenant in cash must provide a written receipt for payment immediately upon receipt if the payment is made in person, or within three business days if payment in cash is not made in person.
Source Link
- 4 Minn. Stat. § 504B.178(5) & (6)
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Subd. 5. Return of deposit.Upon termination of the landlord’s interest in the premises, whether by sale, assignment, death, appointment of receiver or otherwise, the landlord or the landlord’s agent shall, within 60 days of termination of the interest or when the successor in interest is required to return or otherwise account for the deposit to the tenant, whichever occurs first, do one of the following acts, either of which shall relieve the landlord or agent of further liability with respect to such deposit:
(1) transfer the deposit, or any remainder after any lawful deductions made under subdivision 3, with interest thereon as provided in subdivision 2, to the landlord’s successor in interest and thereafter notify the tenant of the transfer and of the transferee’s name and address; or
(2) return the deposit, or any remainder after any lawful deductions made under subdivision 3, with interest thereon as provided in subdivision 2, to the tenant.
Subd. 6. Successor in interest. Upon termination of the landlord’s interest in the premises, whether by sale, assignment, death, appointment of receiver or otherwise, the landlord’s successor in interest shall have all of the rights and obligations of the landlord with respect to the deposit, except that if tenant does not object to the stated amount within 20 days after written notice to tenant of the amount of deposit being transferred or assumed, the obligation of the landlord’s successor to return the deposit shall be limited to the amount contained in the notice. The notice shall contain a stamped envelope addressed to landlord’s successor and may be given by mail or by personal service.
Source Link
