Minnesota Security Deposit Returns and Deductions

Last Updated: January 25, 2024 by Phil Ahn

For laws on security deposit collections and holdings in Minnesota, click here.

Security Deposit Deductions in Minnesota

In Minnesota, the following can be deducted [1] from security deposits:

• Unpaid rent, utilities, and late fees
• Any other unpaid bills
• Costs of damage excluding normal wear and tear

Most states, such as Minnesota, do not have a legal limit on how much a landlord can charge for damages except that the charges must be reasonable. [2]

If the cost of the damages exceeds the amount of the security deposit, landlords are entitled to seek additional damages from the former tenant.

What is Considered Normal Wear and Tear in Minnesota?

“Normal wear and tear” is deterioration that occurs naturally as a result of the tenant using the property as it was designed to be used.

Examples include:

• Gently worn carpets
• Lightly scratched glass
• Faded paint and flooring
• Lightly dirtied grout
• Loose door handles
• Stained bath fixtures

“Damage” means destruction to the rental unit that occurs because of abuse or negligence by a tenant during the course of the tenancy.

Examples include:

• Heavily stained, burned, or torn carpets
• Broken tiles or windows
• Holes in the wall
• Missing fixtures

Can the Landlord Charge for Replacing the Carpet in Minnesota?

Landlords can charge for replacing the carpet if it is damaged beyond normal wear and tear.

Can the Landlord Charge for Nail Holes in Minnesota?

Landlords can charge a tenant for nail holes if they damage the walls in a way that is not a result of ordinary enjoyment of the rental unit.

Tenants have the right to use the walls within their unit in a reasonable way. This includes inserting small nails or thumbtacks to hang posters or pictures.

However, large holes from drilling, multiple nail holes, large nail holes, and holes made for hanging heavier things may be considered damage and thus, chargeable to the tenant.

Can the Landlord Charge a Cleaning Fee in Minnesota?

Landlords in Minnesota can charge a cleaning fee except the landlord cannot charge for cleaning done as a result of normal wear and tear.

However, tenants are required to return the rental unit to the same condition as when they moved in. [3] Landlords can make deductions from the security deposit if the tenant left without cleaning the rental unit.

Can the Landlord Charge for Painting in Minnesota?

In Minnesota, landlords can charge for painting, except for normal wear and tear. For example, if the tenant:

• Causes damage beyond normal wear and tear
• Repaints the wall but is not permitted to do so under the lease agreement
• Repaints the wall in an unprofessional way

Normal wear includes:

• Minor scrapes from daily use
• Fading due to sunlight
• Minor cracks in the original paint

Landlords can charge for repainting if the damage is not the result of normal use. This includes stains, large or deep scratches, and water damage.

Security Deposit Returns in Minnesota

Landlords must return any remaining portion of a security deposit plus interest within 21 days (with some exceptions) after conditions have been met. If deductions are to be made from the security deposit, an itemized statement of deductions must be provided.

How Long Do Landlords Have to Return Security Deposits in Minnesota?

Minnesota landlords have 21 days [6] after the lease term ends and the tenant provides a mailing address (or other delivery instructions) to return any remaining portion of the security deposit plus interest.

However, if the lease ends because of condemnation, the landlord must return the security deposit within 5 days [7] after the tenant vacates the rental unit.

Do Landlords Owe Interest on Security Deposits in Minnesota?

Minnesota law does require landlords to provide interest on held security deposits. The minimum interest rate is 1% per year, [8] except landlords are not required to provide interest if the accrued amount at the end of the lease term is less than $1. [9]

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 [10] of either:

• The last day of the month in which the landlord returns any remaining portion of the security deposit
• The exact date of the entry of a judgment for the security deposit

How Do Landlords Give Notice in Minnesota?

If deductions are to be made from the security deposit, an itemized statement of deductions must be sent by U.S. first-class mailto the tenant’s last known address, unless otherwise instructed by the tenant. [11] The notice must have a valid return address and prepaid postage.

Can a Security Deposit Be Used for Last Month’s Rent in Minnesota?

Minnesota law does not forbid the security deposit from being used for any outstanding rent when the landlord makes deductions. However, tenants cannot withhold their last rental payment because they paid a security deposit [4] (unless otherwise stated in the lease agreement).

If a tenant withholds the last rent payment, the landlord is entitled to double their allowable deductions from the security deposit (except unpaid rent) and withhold the interest. [5] However, the landlord must first send a written demand to the tenant to pay rent.

Security Deposit Disputes in Minnesota

If landlords do not return the security deposit or provide an itemized statement of deductions, if any, within the required time period, tenants can file for damages in court up to twice the amount of the deposit due to the tenant [12](plus $500 for bad faith retention). [13]

If the lease agreement states that the landlord can recover attorneys’ fees in a lawsuit, the tenant can recover attorneys’ fees if they win. [14]

Tenants can also take legal action against a landlord for:

• Unreasonable deductions
• Failure to provide interest

How Can Tenants File a Dispute for a Security Deposit in Minnesota?

If a landlord fails to perform their obligations regarding a security deposit, the tenant can file a dispute in Small Claims Court if the amount of damages is less than $15,000. [15] If the amount is greater, the tenant must file a civil case in District Court.

A small claims case regarding the return of a security deposit must be filed within 2 years. [16]

Cases are filed in the Small Claims Court where the rental property is located or where the defendant lives or has a place of business. An attorney is not required but permitted.