I am often asked whether Smart landlords should charge a security deposit as a condition of leasing rental premises. The short, cocktail party answer, answer is no, probably not.
Under Minn. Stat. 504B.178, the property owner has to return the security deposit with interest within 21 days of the date that the tenants move out and provide instructions for the delivery of the security deposit to the property owner. There is a fairly recent Minnesota Court of Appeals case – in my view, decided wrongly – that says that the only thing that matters is the 21 days.
In the tenant friendly state that we live in, judges tend to be very strict with the 21 days. I actually had a case several years ago where the property owner did not return the security deposit until the 23rd day after the tenants left. In addition, the tenants were arguably still in possession because they had personal property remaining in the rental premises.
Under the statute, the tenant can sue for the amount of the security deposit, double that amount as a penalty, and an additional $500 if the judge finds that the security deposit was withheld in bad faith. In the case I just referred to, that is almost exactly what happened, except that the judge did not find that the security deposit had been withheld in bad faith.
Tenants have the right to sue for the security deposit, double that amount is a penalty, and an additional $500 if a judge finds that the property owner withheld the security deposit in bad faith. I would take that right to sue away from the tenants by returning the entire amount of the security deposit. In the memo line of the check, I would put something like "no waiver of damages beyond ordinary wear and tear." I would go so far as to take a photograph of the check, asked the post office to hand stamp the envelope, and take a photograph of the envelope with the hand stamped postmark before it is deposited in the mail.
If a property owner has charged a security deposit, I wouldn't fret, but just return the entire amount. The property owner can send it to the last known address of the defendants, which may very well be the address of the rental property. If the tenants did not set up mail forwarding with United States Postal System, that is their problem.
For all property owners, I would not charge security deposits going forward. However, I am a firm believer that tenants need to have some skin in the game. Under the current law, as this is written in October 2025, the property owner is okay charging the first month's rent before a tenant moves in. If a property owner is on the fence or a background check did not come back as clean as the property owner might like, I might charge last month's rent as well, and consider not renting to that particular tenant, if the property owner is permitted to decline a rental application in the property owners municipality.
The property owner is always wise to check local ordinances and applicable statutes to make sure that they are not running afoul of the city Council or legislature. Although the reasons that have to be given for declining a rental application is beyond the scope of this post, the property owner generally has to be able to state a non-discriminatory reason for declining the application. In other words, the property owner cannot decline a rental application due to a protected class status (race, religion, ethnicity, sexuality, gender identity, etc.).
Every tenant situation is unique, and I recommend that property owners 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 763-290-0445 to discuss their unique situation. I typically do not represent tenants.
A property owner can expect that I will charge a consultation fee of $250 for a 30 minute consultation by way of telephone, video, or in person, whatever is best for the property owner. If there is a written lease or agreement for possession of the property, I will want to see that. If the property owner has provided any notices or if there are other pertinent communications between the property owner in the tenant, I want to see those as well. In addition, I would like to see anything else that the property owner thinks is important.
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) 290-0445 to set up an appointment to discuss your situation.
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Under Minn. Stat. 504B.178, the property owner has to return the security deposit with interest within 21 days of the date that the tenants move out and provide instructions for the delivery of the security deposit to the property owner. There is a fairly recent Minnesota Court of Appeals case – in my view, decided wrongly – that says that the only thing that matters is the 21 days.
In the tenant friendly state that we live in, judges tend to be very strict with the 21 days. I actually had a case several years ago where the property owner did not return the security deposit until the 23rd day after the tenants left. In addition, the tenants were arguably still in possession because they had personal property remaining in the rental premises.
Under the statute, the tenant can sue for the amount of the security deposit, double that amount as a penalty, and an additional $500 if the judge finds that the security deposit was withheld in bad faith. In the case I just referred to, that is almost exactly what happened, except that the judge did not find that the security deposit had been withheld in bad faith.
Tenants have the right to sue for the security deposit, double that amount is a penalty, and an additional $500 if a judge finds that the property owner withheld the security deposit in bad faith. I would take that right to sue away from the tenants by returning the entire amount of the security deposit. In the memo line of the check, I would put something like "no waiver of damages beyond ordinary wear and tear." I would go so far as to take a photograph of the check, asked the post office to hand stamp the envelope, and take a photograph of the envelope with the hand stamped postmark before it is deposited in the mail.
If a property owner has charged a security deposit, I wouldn't fret, but just return the entire amount. The property owner can send it to the last known address of the defendants, which may very well be the address of the rental property. If the tenants did not set up mail forwarding with United States Postal System, that is their problem.
For all property owners, I would not charge security deposits going forward. However, I am a firm believer that tenants need to have some skin in the game. Under the current law, as this is written in October 2025, the property owner is okay charging the first month's rent before a tenant moves in. If a property owner is on the fence or a background check did not come back as clean as the property owner might like, I might charge last month's rent as well, and consider not renting to that particular tenant, if the property owner is permitted to decline a rental application in the property owners municipality.
The property owner is always wise to check local ordinances and applicable statutes to make sure that they are not running afoul of the city Council or legislature. Although the reasons that have to be given for declining a rental application is beyond the scope of this post, the property owner generally has to be able to state a non-discriminatory reason for declining the application. In other words, the property owner cannot decline a rental application due to a protected class status (race, religion, ethnicity, sexuality, gender identity, etc.).
Every tenant situation is unique, and I recommend that property owners 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 763-290-0445 to discuss their unique situation. I typically do not represent tenants.
A property owner can expect that I will charge a consultation fee of $250 for a 30 minute consultation by way of telephone, video, or in person, whatever is best for the property owner. If there is a written lease or agreement for possession of the property, I will want to see that. If the property owner has provided any notices or if there are other pertinent communications between the property owner in the tenant, I want to see those as well. In addition, I would like to see anything else that the property owner thinks is important.
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) 290-0445 to set up an appointment to discuss your situation.
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