Overview
Minnesota does not cap the amount a landlord may charge as a security deposit, making it one of the more landlord-flexible states in this regard. However, the state does impose clear rules on how deposits must be returned and what deductions are permissible.
This guide covers everything landlords and tenants need to know about security deposits in Minnesota.
Deposit Limits
Minnesota law does not set a maximum security deposit amount:
- No statutory limit: Landlords may charge any amount they deem appropriate as a security deposit
- Market norms: In practice, most landlords charge between one and two months' rent
- Prepaid rent: Landlords may also collect prepaid rent, which is treated separately from the security deposit
While there is no cap, excessively high deposits may be challenged in court as unconscionable.
Allowable Deductions
Landlords may only deduct from the security deposit for the following reasons:
- Unpaid rent: Any rent owed at the time of move-out
- Damage beyond normal wear and tear: Repairs for tenant-caused damage exceeding ordinary use
- Breach of lease: Costs arising from the tenant's failure to comply with lease terms
- Unpaid utilities: Utility charges that are the tenant's responsibility
What Constitutes Normal Wear and Tear?
Normal wear and tear includes:
- Minor scuffs on walls
- Small nail holes from hanging pictures
- Worn carpet from regular use
- Faded paint due to sunlight
Damage beyond normal wear and tear includes:
- Large holes in walls
- Stained or burned carpet
- Broken windows or fixtures
- Pet damage to flooring or doors
Return Timeline
Landlords must return the security deposit within 21 days (3 weeks) of the tenant vacating the unit. The return must include:
- The remaining deposit amount (if any deductions were made)
- An itemized written statement listing each deduction and the amount
Interest on Deposits
Minnesota does not require landlords to pay interest on security deposits. However, if a landlord acts in bad faith in withholding a deposit, the tenant may recover damages.
Forwarding Address
If the tenant does not provide a forwarding address, the landlord must mail the deposit and statement to the tenant's last known address. The tenant has the right to provide a forwarding address in writing.
cite: Minn. Stat. § 504B.178(3)
Pre-Move-Out Inspection
Minnesota does not have a statutory requirement for pre-move-out inspections. However, tenants are encouraged to:
- Take photos or video of the unit at both move-in and move-out
- Request a walk-through with the landlord before surrendering the keys
- Document any existing damage at the start of the tenancy
A thorough move-in and move-out inspection can help prevent disputes over deductions.
Dispute Resolution
If a tenant believes their deposit was wrongfully withheld, they can:
- Send a demand letter to the landlord requesting the return of the deposit
- File a claim in Conciliation Court (Minnesota's small claims court, up to $15,000)
- File a complaint with the Minnesota Attorney General's Office
If the landlord acts in bad faith by withholding the deposit or failing to provide the required itemized statement, the tenant may be awarded the full deposit amount plus interest and reasonable attorney's fees.