Minnesota security deposit law requires timing, interest, and a written explanation if money is kept.

The main Minnesota rules

• Three-week return rule: the trigger includes termination of the tenancy and receipt of the tenant's mailing address or delivery instructions.
• Interest: Minnesota residential deposits generally earn 1 percent simple, noncompounded interest.
• Written statement: if the landlord keeps money, the landlord must explain the specific reason for the withholding.
• Mailing compliance: the timing issue can turn on when and how the landlord mailed the refund or written statement.
• Ordinary wear limit: the landlord may not charge the tenant for ordinary wear and tear.
• Special condemnation rule: a 5-day return rule can apply when the tenant leaves because of a qualifying legal condemnation.

What a landlord may withhold

Minnesota allows withholding only for amounts reasonably necessary to cover unpaid rent, other money due under an agreement, or restoring the premises to the condition at the start of the tenancy, ordinary wear and tear excepted.

In a deposit action, the landlord has the burden to prove the reason for withholding by a fair preponderance of the evidence. That is why photos, move-in records, move-out records, payment proof, and the landlord's written statement matter.

Move-out inspection rights

Minnesota also has inspection-related notice rules under Minn. Stat. section 504B.182. After notice of termination or before the lease ends, the landlord must notify the tenant in writing of the option to request a move-out inspection and the right to be present. If requested, the inspection should occur at a reasonable time, no earlier than five days before the lease ends, termination, or the planned move-out date. The point is to identify issues the tenant may fix before final deductions.

Do not assume the deposit can be last month's rent

Minnesota has a last-month-rent restriction. Do not assume you can stop paying rent because the landlord is holding a security deposit. If rent is unpaid, the landlord may claim it as a deduction and the tenant may face additional consequences.

If the property is sold or transferred

Minnesota has successor-landlord rules for deposits when the landlord's interest ends by sale, assignment, death, receivership, or another transfer. The deposit plus interest may need to be transferred to the successor with notice to the tenant or returned to the tenant. Save any transfer notice.

Remedies should be stated carefully

Minnesota law can support recovery of the wrongfully withheld deposit and interest, plus an equal amount of statutory damages when the conditions are met. Bad-faith retention can support punitive damages up to $500.

Those remedies are leverage, not guaranteed money. The stronger claim usually shows the tenancy ended, the landlord received mailing address or delivery instructions, the landlord failed to return the deposit with interest or give a proper written statement, and the withholding was wrongful or bad faith where those remedies are claimed.

Official sources

Source reviewed: April 2026.

• Minn. Stat. section 504B.178
• Minn. Stat. section 504B.182
• Minnesota Attorney General landlord and tenant handbook
• Minnesota Attorney General landlord and tenant handbook

What to do next

• Minnesota security deposit deadline
• Minnesota security deposit deductions
• Minnesota demand letter guide
• Minnesota evidence guide

The free guide explains the Minnesota rule. The paid system gives you Minnesota-specific letters that use the rule in order: address or delivery proof, deadline, interest, written explanation, deduction challenge, and final demand.