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Can tenants withhold last month's rent?

  • Article by: KELLY KLEIN
  • September 15, 2012 - 2:39 PM

Q I have not been able to get my tenants to pay their rent before their lease ends, which worries me because they have done extensive damage to the house. Can a landlord collect last month's rent before a tenant's lease ends?

A Minnesota law prohibits a tenant from withholding the last month's rent on the grounds that the security deposit will serve as payment for that rent, provided the landlord provides written notice of the statute and demand for payment. The penalty to the tenants for failure to pay after you give them the written demand is an amount equal to the portion of the deposit that the landlord is entitled to withhold from their security deposit to cover damage, plus interest on the security deposit, plus the amount of unpaid rent. Since this is a high penalty, tenants will often pay the last month's rent once they receive a landlord's written notice of this statute and demand for payment.

Most landlords send written demands by certified and regular mail. Make sure your written notice identifies the statute (Minn. Stat. 504B.178, subd. 8) and notifies your tenants that there are penalties for withholding the last month's rent on the grounds that the deposit shall serve as payment for that rent. The purpose of a security deposit is to protect the landlord by having some money set aside in case the tenant damages the property, which is why the security deposit cannot be used to cover last month's rent, unless it is agreed upon by both parties.   

Pet deposit

Q I took a $200 pet deposit from a renter. This person broke his lease before the year was up. My lease clearly states the damage deposit will not be returned if this is done. I don't mention anything about the return of the pet deposit in my lease. Do I have to return the pet deposit or is it considered a payment for the privilege of allowing a pet in the rental property?

 

A It really depends on your lease language. Technically, there is no such thing as a nonrefundable deposit, but you can have a nonrefundable pet fee in your lease. Minn. Stat. 504B.178 states that all deposits must be refunded in accordance with that statute, i.e., you can withhold amounts the tenant owes you for damage or unpaid rent. If the lease outlines that the pet deposit is to cover damage related to the pet, and there was no such damage, it needs to be refunded. If the lease is unclear, a court will interpret the lease against the party who drafted it -- usually the landlord. If the lease just indicates the tenant is required to pay a pet deposit, and does not outline the circumstances to which it is to be applied, then it is likely that a court may determine that the pet deposit is solely for pets (because why else would there be a separate deposit?). So, if that is the case, you would be able to keep a portion to cover any damage caused by his pet and return the remaining amount. 

Kelly Klein is a Minneapolis attorney. Participation in this column does not create an attorney/client relationship with Klein. Do not rely on advice in this column for legal opinions. Consult an attorney regarding your particular issues. E-mail renting questions to kklein@kleinpa.com, or write to Kelly Klein c/o Star Tribune, 425 Portland Av. S., Minneapolis, MN 55488. Information provided by readers is not confidential.

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