Q: My spouse and I own a house in Minneapolis and have people stay with us for one to three months at a time. Some pay rent at the going rate or a discounted rate, depending on their circumstances; we share common space as roommates. My understanding is that many of the rules, such as licensing and eviction, are more relaxed in a roommate situation than if we were renting out an entire apartment or house. What are our legal responsibilities as landlords, and who should we contact to receive more information?
A: The general rule in Minneapolis for renting out rooms in your house is that a rental license is required when the owner does not occupy the home, even if there is no rent paid or if the unit is occupied by a relative. In your case, a rental license is not required as long as you occupy the property (minneapolismn.gov/inspections/rental/index.htm). However, the number of roommates you can have living in your home is limited to maximum occupancy of one family plus two to four unrelated people, depending on your district. If you are renting to five or more people, you are governed by a Minneapolis ordinance related to roominghouses and must follow the requirements in that ordinance.
HOMELine at 612-728-5767 is a great resource when you have questions regarding roommates who rent space in your home. Even if you don't need a license, I would still have the terms of your agreement with your roommates in writing and signed by both parties so that you are protected. In addition, make sure to declare any rent you receive as income on your taxes, and follow the Minnesota Department of Revenue's rules relating to Certificates of Rent Paid.
Damage deposits
Q: My daughter is a student at the University of Minnesota and rents an apartment near campus. Her lease runs from August 2015 to August 2016. Before she and her roommates moved in, we paid a $350 damage deposit, along with first and last month's rent; so did her three roommates. All four girls have now subleased their apartment for the summer months. Each found their own sublessee, and the management company had each sublessee sign a lease. Obviously, we are out for the last month's rent that we already paid, but I would like the damage deposit back when she moves out in May. The management company tells me that we will not get the deposit back until August 2016, three months after she moves out. What should I do?
A: You should review your daughter's lease and the section on subletting; most likely it states that the original tenants will get their security deposit back when their lease terminates. Even though the apartment complex signed a lease agreement with the new tenants, your daughter's lease doesn't officially expire until August 2016. You should have your daughter and her roommates take photos of the apartment after they clean it and before they move out. They should also request a walk-through with the building manager and make a checklist regarding the condition of each room, so they won't be charged for any damage caused by the subtenants.
Did the subtenants pay a damage deposit? If the landlord has taken a deposit equal to the one paid by your daughter and her roommates, you can argue that the new deposit replaces their deposits, and that they should be paid this amount if their unit passes an inspection prior to the subtenants taking possession of the unit. Under state law, after your daughter's lease expires, her landlord must, within 21 days, either return the entire security deposit with interest or provide a written statement showing the specific reason for withholding all or part of the deposit.
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, 650 3rd Av. S., Minneapolis, MN 55488. Information provided by readers is not confidential.
