Minnesota Security Deposit Deductions: What Can Be Kept and What the Statement Must Show
Minnesota allows a landlord to withhold a deposit only for reasonably necessary unpaid rent or other funds and for restoring the unit, ordinary wear excepted, and puts the burden of proof on the landlord. Here are the rules and the penalties.
What can a Minnesota landlord keep a deposit for?
Only amounts reasonably necessary to remedy tenant defaults in the payment of rent or of other funds due to the landlord under an agreement, or to restore the premises to their condition at the commencement of the tenancy, ordinary wear and tear excepted (Minn. Stat. 504B.178, subd. 3). The Minnesota security deposit calculator shows the deadline.
What must the statement say?
It must show the specific reason for withholding the deposit or any portion of it. A vague total is not a specific reason; list each item, what was done and what it cost, and keep the invoices. It must be given or mailed within the three weeks.
Who must prove a deduction?
In any action about the deposit, the burden of proving by a fair preponderance of the evidence the reason for withholding all or any part is on the landlord (subd. 3(c)). Photographs, the initial inspection, invoices and the statement are the evidence a court looks at first.
Can a landlord charge for normal wear and tear?
No. Ordinary wear and tear is excepted from the condition the landlord may restore the unit to. A carpet worn by ordinary use or paint faded by time is not a proper deduction, but a burn, a large stain or a hole is.
Can a tenant skip the last month’s rent and treat the deposit as rent?
No. A tenant may not withhold rent for the last payment period on the grounds that the deposit should serve as the rent, except in a month-to-month tenancy where neither side has served a notice to quit. A tenant who does and stays in violation after a written demand is liable for a penalty equal to the part of the deposit the landlord could withhold other than for unpaid rent, and for interest on the whole deposit, in addition to the rent (subd. 8).
What if the landlord is late or wrong?
The tenant can recover the amount withheld and the interest as a penalty, in addition to the amount wrongfully withheld (subd. 4), and punitive damages up to $500 for a bad-faith retention, which is presumed if the landlord failed to comply with the return rules unless it returns the deposit within two weeks after an action starts (subd. 7).
A worked example
A tenant leaves with a $1,500 deposit and $300 of unpaid rent. The landlord also lists $350 to replace a carpet burned by the tenant, with an invoice, and mails a written statement with the specific reason for each item and a refund of $850 plus interest on day 18. Unpaid rent and restoring the unit beyond ordinary wear are both amounts the statute allows, and each reason is specific, so the landlord has complied. A $200 charge for repainting faded walls would be ordinary wear and tear and not allowed.
A checklist for landlords
Offer the initial inspection in the first 14 days; photograph the unit at move-in and move-out; keep invoices and receipts; list each deduction with its specific reason and cost; exclude ordinary wear; and mail the statement with any refund and interest within three weeks.
A checklist for tenants
Compare each charge with your photographs and the inspection record; ask for the invoices in writing; tell the landlord in writing which items you dispute and why; and keep a copy of the statement and the envelope.
Where to get help
Conciliation court, legal aid and the court administrator can explain how a dispute is brought. Bring the lease, the statement and your photographs.
Frequently asked questions
What can a Minnesota landlord deduct from a deposit?
Reasonably necessary unpaid rent or other funds due, and the cost to restore the unit, ordinary wear excepted.
Can a landlord charge for normal wear and tear?
No.
What must the landlord’s statement say?
The specific reason for withholding the deposit or any part.
Who has the burden of proof in court?
The landlord.
Can a tenant use the deposit as the last month’s rent?
No, and a tenant that does can owe a penalty.
Official sources
A local landlord-tenant attorney can review your situation — many offer a free consultation.
This is general information, not legal advice. It is based on the cited Minnesota statutes, rules and court opinions, and every case turns on its own facts. Confirm how the law applies to your situation with a licensed Minnesota attorney.