How Long Do I Have to Return a Security Deposit in Minnesota?

The 21-Day Rule

I get this question all the time from investors who own 3 to 12 doors in the West Metro. Minnesota law gives you 21 days after the tenancy ends to return the security deposit or send a written explanation of any deductions.

The clock starts the day the tenant moves out and returns the keys. Not when you inspect. Not when you feel like it. 21 days, period.

What Counts as a Valid Deduction

You can only withhold for three things: unpaid rent, damage beyond normal wear and tear, and unpaid utilities if the lease makes the tenant responsible. Cleaning is allowed only if the lease specifically requires the unit to be returned in a certain condition.

Normal wear and tear is real. A few nail holes, faded paint after three years, carpet wear in high-traffic areas — those are not deductible. Broken blinds, holes punched in walls, pet urine that soaked through the pad — those are.

Interest Requirements

The deposit must earn interest. Minnesota requires you to pay interest on the deposit at the rate set by statute. As of 2026 that rate is 1% per year. You calculate it from the day you received the deposit until the day you return it or apply it to damages.

Many small landlords skip this and get hit in small claims court. It is not worth the hassle. Track it.

Itemized Statement Requirement

If you keep any part of the deposit, you must send an itemized written statement listing each deduction and the reason. The statement has to go to the tenant within the same 21-day window. No statement, no deductions — you risk having to return the full amount plus interest and court costs.

Practical Steps I Use With My Own Rentals

When a tenant gives notice I start a simple checklist. I note the move-out date, schedule the inspection within 48 hours of keys returned, take dated photos, and keep every receipt for repairs. I mail the statement and any refund by day 18 so there is buffer.

If the tenant disputes the amount I always respond in writing within a few days. Most disagreements settle once they see the photos and receipts. The ones that go to conciliation court are rare, but when they do the paper trail wins.

Security deposit headaches are one of the fastest ways small investors lose money and time. Get the process right from the first tenant and it stops being a problem.