Overview
Minnesota’s security deposit laws are outlined in the Minnesota Statutes § 504B.178. These laws regulate how landlords collect, hold, and return deposits, ensuring that tenants are protected from unfair practices while landlords maintain financial security for damages or unpaid rent.
The law sets firm rules around deposit limits, return deadlines, and interest payments. Non-compliance can result in penalties, including double damages.
This guide covers:
How much landlords can charge
Rules for returning deposits and paying interest
Allowable deductions
Penalties for non-compliance
Related Statute: Minn. Stat. § 504B.178
1. Security Deposit Limits & Storage Requirements
Maximum deposit: There is no specific statewide limit on how much a landlord can charge for a security deposit in Minnesota. However, it must be reasonable and customary.
Storage requirements: While Minnesota does not require landlords to hold the deposit in a separate or interest-bearing account, interest must still be paid.
Law Reference: Minn. Stat. § 504B.178 Subd. 2
2. Security Deposit Returns & Allowable Deductions
Return deadline: Landlords must return the deposit within 21 days after the tenant moves out and provides a forwarding address.
Permissible deductions: Deductions are allowed for unpaid rent, damage beyond ordinary wear and tear, and lease violations.
Itemized statement required: An itemized list of deductions must accompany any withheld amount, delivered to the tenant within the same 21-day period.
Law Reference: Minn. Stat. § 504B.178 Subd. 3
3. Interest Payments & Documentation Requirements
Interest payments: Landlords must pay simple interest on deposits held for more than one year. The rate is set annually by the state and is based on the average rate of interest paid on savings and money market accounts.
Failure to pay interest: If interest is not paid when required, it can result in penalties or legal action from the tenant.
Law Reference: Minn. Stat. § 504B.178 Subd. 2(b)
4. Penalties for Mishandling Security Deposits
Double damages: If a landlord withholds a deposit in bad faith or fails to return it within the required period, the tenant may be entitled to up to twice the amount withheld, plus interest.
Legal action: Tenants may sue to recover the deposit and damages in conciliation court if the amount is less than the state limit.
Law Reference: Minn. Stat. § 504B.178 Subd. 4
Key Takeaways
Minnesota does not cap the amount landlords can charge for security deposits.
Deposits must be returned within 21 days, with an itemized list of deductions.
Interest must be paid on deposits held longer than one year, based on a state-set rate.
Bad-faith withholding may result in double damages plus interest.
By following Minnesota’s deposit rules, landlords can avoid costly penalties, and tenants can ensure their deposits are handled lawfully and transparently.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. Readers should not act or refrain from acting based on any information included in this post without seeking legal counsel or other professional guidance specific to their situation. The information is provided “as is” without any representations or warranties of any kind, express or implied, including but not limited to the accuracy, completeness, or reliability of the content. Laws and regulations may change and vary by jurisdiction.
