Minn. Stat. § 504B § 504B.175
PRELEASE DEPOSIT.
Operative Text
Subdivision 1.Definition. For the purpose of this section, "prelease deposit" means payment given to a landlord from a prospective tenant of a residential dwelling unit before the prospective tenant and the landlord have entered into a rental agreement. "Prelease deposit" does not include the payment of a reasonable applicant screening fee used to conduct a background check on the prospective tenant. Subd. 2.Limitations. (a) A prelease deposit may be accepted only if the landlord and prospective tenant enter into a conspicuous written agreement that includes: (1) the circumstances under which it will be returned; and (2) that the landlord is required to return the prelease deposit within seven days of the occurrence of a circumstance described in clause (1). (b) "Return" means postmarked within seven days except that upon the prospective tenant's request, a landlord may destroy the payment or hold it for retrieval by the tenant instead of returning it by mail. Subd. 3.Application on entry into rental agreement. If a prospective tenant and landlord do enter into a rental agreement, the prelease deposit must be applied to that tenant's security deposit or rent. Subd. 4.Remedies. In addition to any other remedies, a landlord who violates this section is liable to the payor of the prelease deposit for the amount of the deposit paid, plus one-half of that amount as a penalty. A landlord who enters into a rental agreement with a tenant is not liable under this section unless the landlord failed to comply with subdivision 3.
Minn. Stat. § 504B.175 governs "prelease deposits" — money a prospective tenant pays a landlord before any rental agreement is signed, not including standard applicant screening fees. The rule requires that any such deposit be covered by a written agreement spelling out when and how it will be returned, with a seven-day return deadline once a triggering circumstance occurs. If a lease is ultimately signed, the deposit must be credited toward the tenant's security deposit or first rent payment rather than kept separately.
Plain English — not legal advice.
Under Minn. Stat. § 504B.175, operators who collect prelease deposits must have a conspicuous written agreement in place before accepting any funds, clearly stating the conditions for return and the seven-day return window. If a rental agreement is later executed, the deposit must be applied to the incoming tenant's security deposit or rent — it cannot simply be retained. Landlords who skip the written agreement or fail to apply the deposit correctly face liability for the full deposit amount plus an additional 50 percent penalty.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Minn. Stat. § 504B.175 gives prospective tenants the right to a written agreement before handing over any prelease deposit, along with a guaranteed return of those funds within seven days once a return-triggering event occurs. If a landlord fails to follow these requirements, the tenant may be entitled to recover the full deposit plus one-half of that amount as a penalty. Tenants who believe their rights under this provision have been violated can document the circumstances, consult a tenant-rights organization, or explore remedies through the courts.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 15, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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