Minneapolis renters get two layers of deposit protection: Minnesota’s statute, which requires a refund within three weeks with 1 percent interest, and a city cap that limits deposits to one month’s rent. In the city of Minneapolis, about 100,800 of 192,700 occupied homes, or 52.3 percent, are rented, according to the U.S. Census Bureau’s 2020 to 2024 American Community Survey (Homzora Minneapolis dataset, Table B25003). The median gross rent is $1,371 a month (Homzora Minneapolis dataset, Table B25064), and the median renter household earns $53,427 a year (Homzora Minneapolis dataset, Table B25119), so the median rent equals about 31 percent of the median renter household’s gross income.
Homzora is a housing research publisher, not a law firm. This article explains the law in plain English and is not legal advice for your situation.
Quick answers
- Minneapolis cap: one month’s rent; if other upfront costs are charged, half a month’s rent payable over three months (City of Minneapolis, Security deposits).
- Refund deadline: three weeks after the tenancy ends, once the landlord has your mailing address (Minn. Stat. § 504B.178).
- Interest: 1 percent simple interest per year (Minn. Stat. § 504B.178).
- Penalties: an amount equal to the money wrongfully withheld, plus up to $500 in punitive damages for bad faith (Minn. Stat. § 504B.178).
How much a Minneapolis landlord can charge
State law sets no maximum deposit (Minn. Stat. § 504B.178), but Minneapolis does. The city limits the security deposit to one month’s rent. If the landlord also charges other upfront costs, the deposit can be only 50 percent of one month’s rent and must be payable over three months. If a government agency or nonprofit service provider referred the renter, the maximum is one and a half months’ rent (City of Minneapolis, Security deposits). At the Minneapolis median gross rent of $1,371, the standard cap is $1,371.
All fees must be disclosed
Minnesota requires every nonoptional fee to appear in the lease, with rent plus those fees shown as the Total Monthly Payment on the first page, and requires advertisements to include nonoptional fees in the total rent. Violations can bring treble damages (Minn. Stat. § 504B.120).
The three week rule
Within three weeks after the tenancy ends, and after receiving your mailing address or delivery instructions, the landlord must return the deposit with interest or give you a written statement of the specific reason for withholding any part of it. If you must leave because the building was legally condemned through no fault of yours, the deadline is five days (Minn. Stat. § 504B.178).
What can be withheld
Only amounts reasonably necessary to cover unpaid rent or other money due under the lease, or to restore the unit to its condition at the start of the tenancy, ordinary wear and tear excepted. The landlord must prove the withholding by a fair preponderance of the evidence (Minn. Stat. § 504B.178).
Interest
The landlord must pay 1 percent simple, noncompounded interest per year on the deposit, running from the first day of the month after the deposit is paid in full (Minn. Stat. § 504B.178).
Penalties
A landlord who fails to comply owes the tenant the withheld amount plus interest, and an additional penalty in the same amount. If the landlord keeps the deposit in bad faith, a court may add punitive damages of up to $500 per deposit. Bad faith is presumed when the landlord breaks the return rules, unless it returns the deposit within two weeks after a lawsuit begins (Minn. Stat. § 504B.178).
You cannot use the deposit as last month’s rent
A tenant generally may not withhold the last month’s rent on the theory that the deposit covers it, with limited exceptions such as a month to month tenancy where no notice to quit has been served. A tenant who does so after written demand and notice can owe a penalty (Minn. Stat. § 504B.178).
When the building is sold
Within 60 days after the landlord’s interest ends, the landlord must either transfer the deposit with interest to the new owner and notify you, or return it to you (Minn. Stat. § 504B.178).
A worked example
Suppose you paid a $1,371 deposit and moved out May 31, giving your forwarding address that day. The three week deadline is June 21 (Minn. Stat. § 504B.178). If the landlord keeps $500 without a written statement of specific reasons, you could recover the $500 with interest plus an equal penalty, and a court could add up to $500 in punitive damages for bad faith (Minn. Stat. § 504B.178).
A sample demand letter
Date: 2026. To: [landlord]. Re: Deposit for [address]. My tenancy ended on 2026, and I provided my mailing address on 2026. Under Minnesota Statutes section 504B.178, my deposit with 1 percent interest, or a written statement of specific reasons for withholding, was due within three weeks. [I have received neither.] [I dispute these deductions: (list).] Please send [amount] to [address] by 2026. Sincerely, [name].
Minneapolis rules that matter
- Deposit cap: one month’s rent, with lower limits when other upfront costs are charged (City of Minneapolis, Security deposits).
- Pre eviction notice: the city requires 30 days’ written notice before an eviction for nonpayment, longer than the state’s 14 days (City of Minneapolis, Renter rights; Minnesota Attorney General, Landlords and Tenants: Rights and Responsibilities).
- Retaliation ordinance: city protections for reporting code violations, requesting repairs, and joining a tenant association, effective May 2, 2026 (HOME Line, City Ordinance Update (May 2026)).
- Rent setting algorithms: landlords may not use algorithms that rely on nonpublic competitor data to set rents, effective March 1, 2026 (HOME Line, City Ordinance Update (May 2026)).
Key terms
- Total Monthly Payment: rent plus all nonoptional fees, shown on the first page of the lease (Minn. Stat. § 504B.120).
- Ordinary wear and tear: normal deterioration that cannot be deducted.
- Bad faith: wrongful retention that can bring punitive damages.
- Referred renter: a renter referred by an agency or nonprofit, for whom Minneapolis allows a higher cap.
Build your evidence file
Landlord and tenant disputes are usually decided by documents. Keep these together from the day you sign:
- The signed lease, every addendum, and every renewal.
- Receipts or bank records for the deposit and each rent payment.
- Dated photos and video of every room at move in and move out.
- Copies of every repair request and the landlord’s replies.
- Every notice you send or receive, with proof of delivery.
Keep copies somewhere other than your phone, such as an email to yourself, so they survive a lost device.
Before you sign your next lease
- Ask who owns and who manages the property, and get contact details in writing.
- Read the clauses on early termination, subletting, renewal, late fees, and notice before you sign.
- Confirm the deposit amount, where it will be held, and how it will be returned.
- Walk through the unit, note existing damage in writing, and keep a signed copy.
- Ask how much notice the landlord gives before a rent increase or a non renewal.
Help in Minneapolis
HOME Line is a nonprofit that offers a free, confidential tenant hotline for renters throughout Minnesota at 612.728.5767 (HOME Line). The City of Minneapolis lists additional legal resources on its renter rights page (City of Minneapolis, Renter rights). Rent, income, and tenure figures in this guide are free to download from the Homzora Minneapolis data library.
Questions to ask at move in
- Where will my deposit be held, and will I receive that information in writing?
- Is there a move in condition checklist, and can I add items to it?
- What cleaning standard does the lease require at move out?
- How and where will the refund be sent?
- Who should I contact about the deposit if the building is sold?
Ask these before you pay. Answers in writing are far more useful than a conversation in the leasing office.
Mistakes to avoid
- Skipping move in photos. Photos are usually the deciding evidence on what damage existed before you.
- Leaving without a final walkthrough. Attend any inspection offered, or ask for one.
- Not giving a forwarding address in writing. It is the simplest way to make sure the refund reaches you.
- Letting deadlines pass. Send a written demand promptly once the refund deadline has passed.
How to document the unit
- Take a slow video of each room, narrating what you see, on move in day and move out day.
- Photograph appliances inside and out, including the oven, refrigerator, and dishwasher.
- Photograph floors in good light, close enough to show scratches or stains.
- Photograph windows, blinds, doors, and closet interiors.
- Email the files to yourself so the timestamps are preserved in your inbox.
Frequently asked questions
Is there a deposit limit in Minneapolis?
Yes. One month’s rent in most cases (City of Minneapolis, Security deposits).
How long does my landlord have to return my deposit?
Three weeks after the tenancy ends, once the landlord has your mailing address (Minn. Stat. § 504B.178).
Do I earn interest?
Yes, 1 percent simple interest per year (Minn. Stat. § 504B.178).
Sources
- Homzora Minneapolis dataset, Table B25003
- Homzora Minneapolis dataset, Table B25064
- Homzora Minneapolis dataset, Table B25119
- City of Minneapolis, Security deposits
- Minn. Stat. § 504B.178
- Minn. Stat. § 504B.120
- City of Minneapolis, Renter rights
- Minnesota Attorney General, Landlords and Tenants: Rights and Responsibilities
- HOME Line, City Ordinance Update (May 2026)
- HOME Line
- Homzora Minneapolis data library