I am often asked how a landlord should handle a tenant's security deposit after the tenant moves out. The law is relatively clear in this case. Minn. Stat. 504B .178  governs security deposits in Minnesota, and provides that within 21 days of the date that the tenant moves out,

"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."

The landlord can withhold from the security deposit only amounts reasonably necessary to compensate the landlord for damages beyond ordinary wear and tear caused by the tenant. "Ordinary wear and tear" is just that – what you would reasonably expect to happen to a rental unit if someone lived in it for a period of time.

For example, if the carpet is worn or dirty in spots and the landlord needs to shampoo the carpet before the next tenant moves in, that is probably not a damage beyond ordinary wear and tear. If the tenant has ripped holes in the carpet or the carpet is significantly damaged – by pets, for example – and the landlord needs to replace the carpet, that might be an example of damage beyond ordinary wear and tear. You would not reasonably expect holes or gashes to be in the carpet after the carpet had been used normally for a period of time. Likewise, small nail holes in the walls (use for hanging pictures and knickknacks and the like) are probably ordinary wear and tear; however, big holes in the walls caused by the tenant are most likely beyond ordinary wear and tear.

So, the landlord needs to either return the security deposit pursuant to the tenants instructions or furnish a written statement to the tenant showing why the tenant is not getting all or a portion of the security deposit back. The statement should be sent by first-class mail to the tenant's last known address, which may be the rental unit if the tenant has not provided a forwarding address to the landlord.  The consequences for failing to comply are fairly severe. The landlord may also wish to send the statement by certified mail as well, just to be safe, although certified mail is not specifically required by the statute.

A landlord who does not follow the law concerning security deposits is liable to the tenant for the amount of the security deposit wrongfully withheld, double that amount as a penalty, and an additional $500 penalty if a judge finds that the security deposit was withheld in bad faith. Because the potential consequences of not following the law are very severe, I recommend that all landlords follow Minn. Stat. 504B .178 when it comes to dealing with security deposits after the tenant moves out.

Every landlord – tenant situation is unique, and I recommend that landlords talk to an attorney experienced in evictions and landlord tenant law before taking action based on this blog post.  To that end, I invite landlords to give me a call at 763-450-9494 to discuss their unique situation. I typically do not represent tenants.

WARNING: The information contained in this blog post does not constitute legal advice and may not be applicable to your situation.  Tim is licensed to practice law only in Minnesota, and the information contained in this blog post may not apply to jurisdictions outside of Minnesota.  Further, reading this blog post does not create an attorney-client relationship between you and Baland Law Office, P.L.L.C.  You should always discuss your situation with an attorney before taking any action based on what you may read in this blog.  To that end, please call (763) 450-9494 to set up an appointment to discuss your situation.



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