Minnesota Statewide Rule
Minnesota Security Deposit Law: No Cap, 21-Day Return With 1% Interest
Key Facts
- Deposit cap
- No statutory cap
- Return deadline
- Within 3 weeks (21 days) after tenancy ends and after receiving the tenant's mailing address
- Itemized statement
- Required for any withholding; 1% simple annual interest payable
- Statute
- Minn. Stat. § 504B.178
- Penalty
- Withheld amount + interest, plus up to $500 punitive damages per deposit for bad faith
Summary
Minnesota sets no statutory cap on residential security deposits under Minn. Stat. § 504B.178. The landlord must return the deposit, plus 1% simple interest, within three weeks after the tenancy ends and after receiving the tenant's forwarding address, along with a written statement itemizing any withholding. Bad-faith retention exposes the landlord to penalty damages plus up to $500 punitive damages per deposit.
504B.178 INTEREST ON SECURITY DEPOSITS; WITHHOLDING SECURITY DEPOSITS; DAMAGES; LIMIT ON WITHHOLDING LAST MONTH'S RENT. § 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. § Subd. 3. Return of security deposit. (a) Every landlord shall: (1) within three weeks after termination of the tenancy;
Full Breakdown
Under Minn. Stat. § 504B.178, no statute limits how much a landlord may collect as a security deposit. The deposit must "bear simple noncompounded interest at the rate of one percent per annum." After a tenancy ends, the landlord must return the deposit, with interest and less any lawful deductions, within "three weeks after termination of the tenancy and after receipt of the tenant's mailing address or delivery instructions" (five days if the building is condemned through no fault of the tenant). With any withholding, the landlord must "furnish to the tenant a written statement showing the specific reason for the withholding." Deductions are limited to amounts the tenant owes under the lease and damage beyond ordinary wear and tear.
Violations & Penalties
Under Minn. Stat. § 504B.178, subd. 4, a landlord who wrongfully withholds owes the withheld amount plus interest as a penalty, in addition to the deposit itself. Subd. 7 adds "punitive damages not to exceed $500 for each deposit" for bad-faith retention; bad faith is presumed if the landlord fails to return the deposit within two weeks after a recovery action begins.
Frequently Asked Questions
How much can a landlord charge for a security deposit in Minnesota?
How long does a landlord have to return a security deposit in Minnesota?
What can a landlord deduct from a security deposit in Minnesota?
Sources
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