1.1                          A bill for an act 
  1.2             relating to landlords and tenants; regulating the 
  1.3             taking of prelease deposits; providing for a civil 
  1.4             penalty; proposing coding for new law in Minnesota 
  1.5             Statutes, chapter 504. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [504.38] [PRELEASE DEPOSIT.] 
  1.8      Subdivision 1.  [DEFINITION.] For the purpose of this 
  1.9   section, "prelease deposit" means payment given to a landlord 
  1.10  from a prospective tenant of a residential dwelling unit before 
  1.11  the prospective tenant and the landlord have entered into a 
  1.12  rental agreement.  "Prelease deposit" does not include the 
  1.13  payment of a reasonable applicant screening fee used to conduct 
  1.14  a background check on the prospective tenant.  
  1.15     Subd. 2.  [LIMITATIONS.] (a) A prelease deposit may be 
  1.16  accepted only if the landlord and prospective tenant enter into 
  1.17  a conspicuous written agreement that includes:  
  1.18     (1) the circumstances under which it will be returned; and 
  1.19     (2) that the landlord is required to return the prelease 
  1.20  deposit within seven days of the occurrence of a circumstance 
  1.21  described in clause (1).  
  1.22     (b) "Return" means postmarked within seven days except that 
  1.23  upon the prospective tenant's request, a landlord may destroy 
  1.24  the payment or hold it for retrieval by the tenant instead of 
  1.25  returning it by mail.  
  2.1      Subd. 3.  [APPLICATION ON ENTRY INTO RENTAL AGREEMENT.] If 
  2.2   a prospective tenant and landlord do enter into a rental 
  2.3   agreement, the prelease deposit must be applied to that tenant's 
  2.4   security deposit or rent. 
  2.5      Subd. 4.  [REMEDIES.] In addition to any other remedies, a 
  2.6   landlord who violates this section is liable to the payor of the 
  2.7   prelease deposit for the amount of the deposit paid, plus 
  2.8   one-half of that amount as a penalty.  A landlord who enters 
  2.9   into a rental agreement with a tenant is not liable under this 
  2.10  section unless the landlord failed to comply with subdivision 3.