Frequently Asked Questions
The following information is only intended as a brief response to frequently asked questions regarding rental property management in Minnesota. Rental housing is regulated by many local, state and federal laws and regulations. Before renting your units familiarize yourself with the laws and good business practices. The answers given here are neither professional nor legal advice. You should contact your attorney or other advisor to discuss any legal or other issues you may have.
Q: What is tenant screening?
A: Tenant screening is the process used to review a prospective renter's application. For each rental property it is common practice for owners to establish the criteria they use for screening, and then these criteria are used to qualify renters. The criteria need to be in compliance with fair housing laws. Some things to consider are:
•Complete accurate information on the application
•Proper identification documentation (i.e. license, state issued I.D., etc.)
More information on screening residents is available in "The Fundamentals of Rental Property Management in Minnesota".
Q: How do I qualify potential renters?
A: To start, you should always use a written application form to gather vital information about the prospect including proper legal name, social security number, date of birth and sources of income. Visit MHA's Online Store for a written application form. For a list of MHA members that perform resident screening, see our MHA Membership Buyer's Guide and select “applicant screening” in the directory category pull down box.
If you charge an applicant screening fee a number of requirements apply, including mandatory written disclosure of screening criteria prior to accepting the screening fee, a prohibition on using, cashing, or depositing the screening fee until all prior applicants have either been screened and rejected or offered the unit and declined to enter into a lease, and notification to the applicant within fourteen days of rejection, identifying the criteria the applicant failed to meet. For complete information on applicant screening requirements, see Minnesota Statute 504B.173: https://www.revisor.mn.gov/statutes/?id=504B.173
Q: How do I do a background check on a potential tenant?
A: With all of the considerations and liabilities involved in applicant screening, many landlords choose to hire a third-party screening service. This can help distance you from the decision or handling disputes and help you meet fair housing guidelines. For a list of MHA members that perform resident screening, see the MHA Membership Buyer's Guide and select “applicant screening” in the directory category pull down box. Further information on how screening residents including how to select the right company is available in "The Fundamentals of Rental Property Management in Minnesota".
Q: Do I have to run a background check if I know my prospective renter?
A: Treating all renters in your property uniformly is important so you do not violate fair housing laws. You should perform the same background check on any prospective renter at your property.
Q: Do I have to allow a dog on my pet-free property if the resident has a disability?
A: Allowing a guide dog, working dog, or a companion animal is considered a “reasonable accommodation” which is required under the federal Americans with Disabilities Act (ADA).
Q: Can I restrict families with children?
A: Familial status is a protected class under fair housing laws. It is illegal for landlords to discriminate against people with children (familial status). However, there are some exceptions. For more information visit the U.S. Department of Housing and Urban Development (HUD) website.
Q: What are the protected classes under Minnesota Fair Housing law?
A: The protected classes under the Minnesota Human Rights Act are: race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation, and familial status. It is illegal discrimination under Minnesota law to refuse to sell, rent, or lease housing to prospective residents, or have different rental terms, on the basis of one of these protected classes. This area of law is complicated, subject to frequent change, and contains some narrow exceptions. It is strongly advised that you inform yourself about Fair Housing laws by attending educational courses, reading published materials on the topic, and consulting with your attorney or other advisor.
Q: What is the Section 8 Housing Choice Voucher program?
A: The Section 8 Housing Choice Voucher program is a government-funded program that helps low-income households pay the rent in market-rate rentals. The program is administered by local housing authorities in the community. You can find the housing authority for your area by visiting the local non-profit www.HousingLink.org. You are responsible for screening the prospective renter according to your criteria. Once you have approved the applicant and are ready to enter into a lease, the local housing authority will inspect the unit for basic health and safety issues and will ask you to sign a Housing Assistance Payment (HAP) contract. This stipulates the amount of rent the renter is responsible to pay directly to you and the amount the housing authority will pay directly to you. You cannot charge the renter any additional side rent. That is a violation of the program rules. Once your unit has passed inspection and the contract has been signed the renter can move in and you will begin receiving rent payments from the housing authority. If the renter moves in before the unit passes inspection, the housing authority will not pay rent for the period before the unit passes inspection.
Q: Do I have to participate in the Section 8 program?
A: Under federal and state law, an owner's participation in the Section 8 program is voluntary. In 2010, the Minnesota Court of Appeals affirmed that an owner may choose not to participate in the Section 8 program without violating Minnesota law.
Q: Where do I go for more information on the Section 8 program?
A: To find out more on the Section 8 program contact your local Housing Authority or go to www.HousingLink.org. HousingLink is a local non-profit agency that works with the housing authorities to connect renters being issued vouchers to available rental properties.
Q: How long until I have to give the security deposit back?
A: You are required to refund any security deposit plus interest, or give the tenant a written explanation as to why the deposit will not be returned, within 21 days of the termination of a tenancy. An owner can withhold from the security deposit any unpaid rent, damages to the unit beyond ordinary wear and tear and other funds due pursuant to an agreement. Visit MHA's Online Store for a schedule of the interest rates owed for various time periods. For complete information on the security deposit see the Minnesota Statutes 504B.178.
Q: What is the current interest rate for security deposits?
A: Minnesota law requires the landlord to return a tenant's deposit, minus any allowable deductions, together with the current interest rate of 1%. The law does not apply, however, if the interest due on the deposit is less than $1. For complete information on the security deposit see the Minnesota Statutes 504B.178.
Q: Do I need to use a lease?
A: You should always use a written lease. A written lease helps avoid problems at a later time regarding the terms and conditions of your rental. If you have 12 or more apartments in your building, you are required by Minnesota law to use a written lease.
Q: Is a lease required if I just have a single family home that I am renting out?
A: It is always a good practice to use a written lease. Some cities require a written lease for all properties. Check with your local community for specific information.
Q: What insurance do I need?
A: At a minimum, you'll need liability and property damage insurance. You may also want to strongly consider an umbrella policy. Contact your insurance agent for specific recommendations on the coverages you will need to meet your circumstances and needs. Insurance agents are also listed in the MHA Membership Buyers' Guide. Choose insurance on the directory category pull down menu.
Q: How can I prove the damage to my apartments was done by this resident?
A: Good rental management practices are your best protection against problem renters and property damage. Walk through the property with a new renter and make a visual inspection together. Many owners use a move-in/move-out inspection form designed for this purpose. Other owners take digital photos or a video to illustrate the condition of the apartment at move-in.
Both parties should sign an agreement stating that the photos or video are an accurate depiction or sign the written inspection form. Next, make and sign an agreement as to what maintenance, if any, should be done. Once the repairs are made both parties should sign off on them. Keep these documents in the renter's file.
Then at move-out you have documents and/or photos that you can use to prove any resident damages and to support deductions from the security deposit.
Q: Do I need to check on the background of potential caretakers?
A: The state of MN requires a criminal investigation prior to hiring any employee who has or would have the means, within the scope of the individual's duties, to enter a resident's dwelling unit. In general terms this law applies if the potential employee will have access to keys to a tenant's home. The employer is required to perform a criminal background check compliant with the Kari Koskinen law. Certain criminal offenses prohibit hiring individuals entirely.
If the prospective employee has not been a MN resident for the past 10 consecutive years the law requires a search of the national criminal records repository or a search of the criminal justice data communications network in the state or states where he or she has resided over the past ten years. Fingerprints are required to access the national criminal records.
Your screening company can help you submit these forms. To obtain a Kari Koskinen Background Check sample consent form or for more information regarding your obligations under the law, please visit the Minnesota Department of Public Safety website at https://dps.mn.gov/divisions/bca/pages/background-checks.aspx. For complete information on this law, see Minnesota Statute 299C.67 to 299C.71.
Q: Can I enter the apartment at any time to do maintenance?
A: Generally, an owner may enter a resident's unit for a “reasonable business purpose” after making an effort to give the resident reasonable notice. A few examples of reasonable business purpose include: showing the apartment, performing maintenance, and checking on a resident the landlord believes is violating the lease.
There are certain exceptions when an owner can enter a unit without prior notice, such as when a resident's safety is in question or to prevent injury to property or people. Complete details can be found in MN Statute 504B.211.
Q: Does the state of Minnesota require any forms or other requirements?
A: Minnesota Statutes, Chapter 504B, governs the landlord/tenant relationship and includes things like the amount of interest to be paid on security deposits, what to do with abandoned property and landlord disclosures.
In addition, by January 31st of each year, you are required to give a Certificate of Rent Paid (CRP) to each of your residents from the prior year. Visit the MN Department of Revenue's website for full details. There are also requirements for CO and smoke detectors. Information on both of these requirements can be found on the Minnesota Fire Marshal's website.
Any housing built prior to 1978 may contain lead paint. The federal government has mandated that a disclosure form and a pamphlet, "Protecting Your Family From Lead in Your Home" be provided to each rental household. The disclosure form and pamphlet are available for purchase on the MHA website at mmha.com. Full details of the requirements can be found on the Environmental Protection Agency website.
Q: What is a CRP?
A: By January 31st of each year, you are required to give a Certificate of Rent Paid (CRP) to each of your residents from the prior year. Forms and instructions are available on the Minnesota Department of Revenue website.
Q: Do I have to get a rental license?
A: Many cities in Minnesota require that you register and/or obtain a license for your rental property before the first renter moves in. This requirement may apply to any size rental property, even a single family home.
Q: How do I get a rental license?
A: Typically the process to obtain a rental license includes an application, payment of a licensing fee, a property inspection, and issuance of the license. Call the city offices where your property is located and ask for rental licensing requirements. The city will provide you with forms and information.
Q: What's involved in an inspection? What do they look for?
A: The inspector will look at the exterior and interior of the building and the yard. Following are a few examples of items and conditions that may be covered in a city licensing inspection:
• soundness of windows, doors, siding, foundation, roof, gutters and steps;
• secure windows and doors that operate correctly with no broken glass or peeling paint;
• smoke/CO detectors installed as per code; and
• plumbing, electrical and heating systems installed and maintained according to code and operating correctly.
Call your city for requirements that are specific to your property.
Q: Do I have to go to court to evict someone, or can I just tell them to leave?
A: While an owner cannot forcibly remove a resident, lock them out, or shut off utilities, an owner may give the resident written notice to vacate by a specified date, or when the lease term has expired. The specified date to vacate must comply with the terms of the lease, or in the absence of a lease be a minimum of one month ending on the last day of the month from the date of the written notice.
Q: If the resident refuses to vacate, how do I begin an “eviction action” within the court system?
A: This is a complex process. The steps are outlined in MHA's free brochure entitled, "How to File an Eviction Action in Minnesota." You may also want to contact an attorney.
Q: What do I do with residents' belongings after they have moved out?
A: Occasionally a resident will leave behind personal property after vacating a unit. Minnesota statutes require that you store this property for twenty-eight days. You may charge back reasonable moving and storage costs to the resident, but you cannot refuse to give the property back if the resident asks for it. After twenty-eight days, and with proper notice to the resident if you sell the property, you may sell or dispose of the property. Proceeds from selling the property may be used to cover outstanding debt, however any money earned in excess must be returned to the resident. For further details and requirements refer to Minnesota Statute 504B.271 or the Minnesota Attorney General's "Landlords and Tenants: Rights and Responsibilities" handbook.
Q: What is normal wear and tear in an apartment?
A: Any unit will show signs of wear and tear after being occupied, including such ordinary things as scuff marks on the walls, minor stains or wear patterns in carpet and nail holes in drywall. Your expense to repair ordinary wear and tear in a unit during turnover is considered a normal cost of doing business and cannot be charged back to a resident or deducted from the security deposit.
Another thing to keep in mind is the definition of “ordinary” will be relative to the length of the residency. A unit that has been continuously occupied for several years will have much more normal wear and tear than one that has only been occupied for a few months.
Q: Where do I get a lease?
A: Apartment lease forms are available from the MHA and other sources. The MHA lease covers the basic lease issues, but you should supplement any lease you use with specific terms that apply to your building and situation. To purchase a lease visit MHA's Online Store.
Q: Can I photocopy MHA leases and other documents?
A: No, the MHA lease is a copyrighted document. Using copies of a copyright-protected document without permission of the owner is copyright infringement. When the MHA Lease is purchased, the consumer has paid for the right to use the document for its intended purpose which is to provide the contractual language for a lease agreement between the user and specific renter(s).
Q: How do I find a company to manage my small apartment building?
A: Ask for referrals from other owners. The Minnesota Multi Housing Association also maintains a list of companies that will manage small buildings.
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