Minnesota Session Laws - 1999, Regular Session

                            CHAPTER 97-H.F.No. 1178 
                  An act relating to landlords and tenants; regulating 
                  the taking of prelease deposits; providing for a civil 
                  penalty; proposing coding for new law in Minnesota 
                  Statutes, chapter 504. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [504.38] [PRELEASE DEPOSIT.] 
           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. 
           Presented to the governor April 22, 1999 
           Signed by the governor April 26, 1999, 1:10 p.m.