Minnesota Statewide Rule

Minnesota Security Deposit Law: No Cap, 21-Day Return With 1% Interest

Some RestrictionsApplies statewide across Minnesota (2026)

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.

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

Last verified: 2026-06-27

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?

Minnesota law sets no statutory cap on security deposits, so a landlord may set the amount, though it is usually one to two months' rent. Whatever the amount, Minn. Stat. § 504B.178 requires it to earn 1% simple interest and be returned, less lawful deductions, after the tenancy ends.

How long does a landlord have to return a security deposit in Minnesota?

Within three weeks (21 days) after the tenancy ends and after the landlord receives the tenant's mailing address or delivery instructions, under Minn. Stat. § 504B.178. The deadline shrinks to five days if the building is condemned through no fault of the tenant. The refund must include 1% interest and a written statement of any withholding.

What can a landlord deduct from a security deposit in Minnesota?

A landlord may deduct unpaid rent and other amounts the tenant owes under the lease, plus the cost of repairing damage beyond ordinary wear and tear. Under Minn. Stat. § 504B.178 the landlord must furnish a written statement showing the specific reason for any withholding within the three-week return window.

Sources

Minn. Stat. § 504B.178 (Interest on Security Deposits; Withholding)

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