Minnesota Security Deposit Law: Limits, Deadlines, and Penalties
What Minnesota landlords can charge, when deposits must be returned, and what it costs to get it wrong. Last reviewed 2026-08-12.
How much can a landlord charge in Minnesota?
Minnesota sets no cap on residential security deposits. Market practice is one month's rent; the deposit remains the tenant's money and earns interest while held.
No cap or separate rule; a refundable pet deposit is a security deposit subject to the same 1% interest and three-week return requirements.
When must the deposit be returned?
The landlord must return the deposit with interest, or provide a written statement of the specific reasons for withholding, within three weeks after the tenancy ends and the landlord receives the tenant's mailing or delivery address. The window shrinks to five days if the tenant must leave because the building is condemned.
Any withholding requires a written statement of the specific reasons; permissible grounds are limited to unpaid rent and restoring the unit to its move-in condition, excluding ordinary wear and tear.
What happens if a landlord misses the deadline?
A landlord who misses the three-week deadline is liable for the amount wrongfully withheld plus interest, and an equal amount again as a statutory penalty — effectively double. Bad-faith retention adds punitive damages up to $500 per deposit, and retention is presumed bad faith if the deposit is not returned within two weeks after the tenant files suit.
Interest and holding requirements
Deposits earn simple, noncompounded interest at 1% per year, computed from the first day of the month after full payment, payable when the deposit is returned.
No separate account, escrow, or bond is required; the deposit is statutorily the tenant's money held by the landlord, with the 1% interest obligation attached.
Recent changes to the law
Minnesota's 2023 landlord-tenant package (effective January 1, 2024) added § 504B.182, giving tenants the right to request joint move-in and move-out inspections that frame what can later be deducted from the deposit; the deposit statute's core terms (21-day return, 1% interest) were unchanged.
What Minnesota landlords get wrong
The three-week clock does not start until you have the tenant's forwarding address, so request it in writing at move-out and document when you received it. Since 2024, tenants can demand a joint move-in inspection and a move-out inspection under § 504B.182, and deduction disputes increasingly turn on those records — do the inspections even when not asked. Tenants may not apply the deposit to their last month's rent; doing so creates a statutory presumption of wrongful withholding by the tenant. The penalties stack quickly: withheld amount plus interest, doubled, plus up to $500 punitive damages for bad faith.
The law itself
Frequently asked questions
How long does a Minnesota landlord have to return a security deposit?
Three weeks after the tenancy ends and the landlord receives the tenant's forwarding address — both conditions must be met before the clock runs. The landlord must return the deposit with 1% annual interest or send a written statement of the specific reasons for keeping any of it. If the tenant had to move because the building was condemned, the deadline drops to five days.
Is there a limit on security deposits in Minnesota?
No. Minnesota law does not cap the amount of a residential security deposit, so the amount is whatever the lease sets — commonly one month's rent. Whatever is collected remains the tenant's money: it earns simple interest at 1% per year and must be accounted for within three weeks of move-out, with deductions limited to unpaid rent and damage beyond ordinary wear.
What can a landlord deduct from a security deposit in Minnesota?
Only amounts for rent or other funds owed under the lease and the cost of restoring the unit to its condition at move-in, excluding ordinary wear and tear. Each withholding must be explained in a written statement of specific reasons. Worn carpet and faded paint are ordinary wear; holes in walls, broken fixtures, and required cleaning beyond broom-clean are deductible.
What is the penalty for not returning a deposit in Minnesota?
A landlord who misses the deadline owes the wrongfully withheld amount plus interest, and then the same amount again as a penalty — effectively double. If the retention is in bad faith, a court can add punitive damages up to $500 per deposit. Bad faith is presumed when the landlord still has not returned the deposit two weeks after the tenant sues.
Keep reading
Deposit deadlines are easy to miss — until they cost you triple.
Vantric tracks your leases, deposits, and move-out dates in one place, built for landlords with 1–10 units.
Start Free TrialThis page is general information, not legal advice. Statutes change — verify against the official text linked above or consult a local attorney before acting.