Minneapolis, MN Rental Property Rules: Security Deposit Rules (2026)
Key Facts
- Return deadline
- 21 days post move-out
- Interest rate
- 1% simple, annual
- State statute
- Minn. Stat. §504B.178
- Penalty
- Double withheld amount
Summary
Minnesota Statute Section 504B.178 caps rental security deposits and mandates return within 21 days after lease end, with itemized deductions and 1% monthly interest accrual on deposits held over a year.
504B.178 INTEREST ON SECURITY DEPOSITS; WITHHOLDING SECURITY DEPOSITS; DAMAGES; LIMIT ON WITHHOLDING LAST MONTH'S RENT. 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. Subd. 3. Return of security deposit. (a) Every landlord shall: (1) within three weeks after termination of the tenancy; or (2) within five days of the date when the tenant leaves the building or dwelling due to the legal condemnation of the building or dwelling in which the tenant lives for reasons not due to willful, malicious, or irresponsible conduct of the tenant, and after receipt of the tenant's mailing address or delivery instructions, return the deposit to the tenant, with interest thereon as provided in subdivision 2, or furnish to the tenant a written statement showing the specific reason for the withholding of the deposit or any portion thereof. (b) The landlord may withhold from the deposit only amounts reasonably necessary: (1) to remedy tenant defaults in the payment of rent or of other funds due to the landlord pursuant to an agreement; or (2) to restore the premises to their condition at the commencement of the tenancy, ordinary wear and tear excepted. Subd. 7. Bad faith retention. The bad faith retention by a landlord of a deposit, the interest thereon, or any portion thereof, in violation of this section shall subject the landlord to punitive damages not to exceed $500 for each deposit in addition to the damages provided in subdivision 4.
Full Breakdown
Minnesota Statute Section 504B.178 governs security deposits across Minneapolis rentals. Landlords must return the deposit, with simple interest at 1% per year, within 21 days of the tenant providing a forwarding address after vacating. Itemized deductions for damage beyond ordinary wear and tear must accompany any withholding. Tenants who do not receive timely return may sue for the full deposit plus a punitive amount equal to the wrongfully withheld portion. Minneapolis does not impose a separate deposit cap, but state law caps deposits to a reasonable amount, generally interpreted as one month's rent. Pet deposits must follow same rules.
Violations & Fines
Failing to return deposit within 21 days, withholding without itemized statement, or unreasonable damage deductions exposes landlords to small claims liability for double the wrongfully withheld amount plus interest.
Frequently Asked Questions
What counts as 'ordinary wear and tear'?
Can my landlord charge a non-refundable cleaning fee?
Sources & Official References
Other rules in Minneapolis
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