Pet deposit and pet fee law in Minnesota: any deposit that secures the lease is covered, with interest
Minnesota Statutes 504B.178 applies to any deposit of money whose function is to secure performance of a residential rental agreement, other than one that is exclusively advance rent. A pet deposit that secures the tenant's performance is covered. It earns 1 percent simple interest, must be returned or accounted for within three weeks, and may be withheld only for unpaid rent or restoring the premises, ordinary wear excepted.
Does 504B.178 reach a pet deposit?
Subdivision 1 says any deposit of money, the function of which is to secure the performance of a residential rental agreement or any part of it, other than a deposit that is exclusively an advance payment of rent, is governed by the section. The test is the deposit's function, not its name. A "pet deposit" held to cover pet damage or lease compliance is a deposit under the section, and it carries the same interest, timing and burden rules as the base deposit. I found no dollar cap in the section.
Subdivision 2 provides that a deposit is held by the landlord for the tenant and bears simple noncompounded interest at 1 percent per year, computed from the first day of the month after full payment to the last day of the month in which the landlord complies with the return rules, or the judgment date, whichever is earlier. Interest under $1 is excluded.
What can you keep, and by when?
Under subdivision 3, the landlord must within three weeks after the tenancy ends, or within five days when the tenant leaves because of a legal condemnation not caused by the tenant, and after receiving the tenant's mailing address or delivery instructions, return the deposit with interest or give a written statement of the specific reason for withholding. Mailing first class within the time is enough. The landlord may withhold only amounts reasonably necessary to remedy defaults in rent or other funds due under an agreement, or to restore the premises to their condition at the start of the tenancy, ordinary wear and tear excepted. In any action, the landlord has the burden of proving the reason for withholding.
Subdivision 4 sets the penalty: a landlord who fails to give a timely statement, return a deposit as required on a sale, or complete the required initial and move-out inspections when requested under section 504B.182, is liable for the amount wrongfully withheld plus interest, and, as a penalty, an additional amount equal to the portion withheld with interest.
Example a made-up tenant leaves on Friday, December 4, 2026 and gives a forwarding address that day. The deposit with interest, or the written statement explaining each deduction, must be mailed by Friday, December 25, 2026. A pet-damage deduction needs a specific reason and proof, since the landlord carries the burden.
What about assistance animals?
The Minnesota deposit section does not address assistance animals, so federal law applies. Under 24 CFR 100.204 a housing provider must make reasonable accommodations in rules and policies needed for equal use of a dwelling, and the regulation's example is a seeing eye dog in a no-pets building. Do not collect a pet deposit for an approved assistance animal.
- Label every refundable pet payment as a deposit and track its interest.
- Request the forwarding address in writing at move-out.
- Offer the initial and move-out inspections the statute describes.
- Mail the statement within three weeks, with reasons specific to each item.
Where does DoorKeeping fit?
DoorKeeping keeps the lease, the pet addendum, the move-in photos and the rent ledger together, so the purpose of each charge and the condition of the unit on the first day are on file when you itemize a deduction. You decide what to charge and what to keep. This is general information, not legal advice: check the current statute, and ask a local attorney if a charge is disputed.
Sources
Questions
- Is a Minnesota pet deposit covered by the deposit statute?
- Yes if its function is to secure performance of the rental agreement (504B.178, subd. 1).
- What interest does a Minnesota deposit earn?
- Simple noncompounded interest at 1 percent per year (504B.178, subd. 2).
- Who has the burden on a Minnesota deposit withholding?
- The landlord must prove the reason for withholding (504B.178, subd. 3).