Minnesota Security Deposit Law

Maximum deposit

Minnesota state law sets no cap on the security deposit amount, but some cities (notably Minneapolis) limit it by ordinance (Minn. Stat. § 504B.178). (Minn. Stat. § 504B.178 (no amount limit))

Return deadline

Within three weeks (21 days) after the tenancy ends and after receiving the tenant's mailing address, return the deposit with interest or mail a written statement of the specific reasons for withholding; the deadline is 5 days if the tenant leaves because the building was condemned (Minn. Stat. § 504B.178, subd. 3). (Minn. Stat. § 504B.178, subd. 3(a))

Itemized statement of deductions

If you keep any part of the deposit, give the tenant a written statement showing the specific reason for each withholding within the return deadline (Minn. Stat. § 504B.178, subd. 3). (Minn. Stat. § 504B.178, subd. 3(a))

Interest on the deposit

Pay the tenant 1% simple annual interest on the deposit, computed from the first of the month after it was paid in full until the month it is returned (Minn. Stat. § 504B.178, subd. 2). (Minn. Stat. § 504B.178, subd. 2)

1% per year simple, noncompounded interest from the first day of the month after the deposit is fully paid until the last day of the month the landlord returns it (or judgment); amounts under $1 excluded.

Penalty for wrongful withholding

A landlord who misses the deposit deadline owes the withheld amount plus an equal penalty (with interest), and bad-faith retention adds up to $500 in punitive damages (Minn. Stat. § 504B.178, subds. 4, 7). (Minn. Stat. § 504B.178, subds. 4 and 7)

Where the deposit is held

Minnesota says a deposit is held by the landlord for the tenant but is not received in a fiduciary capacity, so no separate trust or escrow account is required (Minn. Stat. § 504B.178, subd. 2). (Minn. Stat. § 504B.178)

The deposit still earns 1% simple interest and must be transferred or returned when the landlord's interest ends (subds. 2, 5).

Receipt or written notice of the deposit

A Minnesota landlord who takes a deposit or any other payment in cash must give a written receipt immediately, or within three business days if not paid in person (Minn. Stat. § 504B.118). (Minn. Stat. § 504B.118)

Applies only to cash payments; there is no duty to tell the tenant where the deposit is held.

Move-in condition checklist

Minnesota landlords must tell tenants at the start of the tenancy or within 14 days of move-in that they may request an initial inspection, and offer a move-out inspection, or face the deposit penalty (Minn. Stat. §§ 504B.182, 504B.178, subd. 4(4)). (Minn. Stat. § 504B.182, Minn. Stat. § 504B.178, 2023 Minn. Laws ch. 52, art. 19, secs. 85-86, 90)

If the tenant agrees, written acknowledgment of photos or video can replace either inspection; the move-out inspection is held no earlier than five days before move-out so the tenant can fix problems.

Pet deposits

Minnesota landlords cannot charge a pet fee, charge or deposit for a service or support animal granted as a reasonable accommodation, and any lease with a pet fee must disclose that exemption (Minn. Stat. § 504B.113, subd. 3). (Minn. Stat. § 504B.113, 2024 Minn. Laws ch. 118 (S.F. 3492), sec. 6)

If the disclosure is missing, a tenant who would likely have qualified for an accommodation can sue to recover pet fees and deposits paid; the tenant remains liable for damage the animal causes.

Nonrefundable fees

Minnesota has no statute banning nonrefundable move-in fees, but every nonoptional fee must be disclosed and totaled with rent as the 'Total Monthly Payment' on the lease's first page (Minn. Stat. §§ 504B.120, 504B.178, subd. 1). (Minn. Stat. § 504B.120, Minn. Stat. § 504B.178)

Small-landlord exemptions

Minnesota's deposit-interest, return and inspection rules have no exemption for small or owner-occupant landlords (Minn. Stat. §§ 504B.178, 504B.182). (Minn. Stat. § 504B.178, Minn. Stat. § 504B.182)

Deposit alternatives and installments

Minnesota law does not regulate deposit-waiver products or give tenants a right to pay deposits in installments (Minn. Stat. ch. 504B). (Minn. Stat. ch. 504B (full text))