Return of deposit may turn on signing of lease

Q Can a renter back out of a lease after they've made a deposit? The term is six months. And is it legal to keep the deposit, or do we have to return it?

A Minnesota Statute 504B.175 covers pre-lease deposits. A pre-lease deposit is defined as a deposit that is put down in advance of the lease being signed as a way to hold the unit for a prospective tenant.

The statute governs when a pre-lease deposit may be collected, states that there has to be a written agreement covering that deposit and the circumstances under which it must be returned.

Generally, if the tenant backs out of signing the lease because they decide to go elsewhere, the landlord may keep the pre-lease deposit.

Minnesota Statute 504B.178 covers lease deposits, and states that those deposits must be returned, with the statutory interest, at the termination of the relationship, less any amounts that the landlord is entitled to withhold for amounts that the tenant owes to the landlord.

If the tenant signed a lease and put down a deposit, then you are covered by Minnesota Statute 504B.178 and can withhold from the deposit any amounts expended to re-rent the unit, such as advertising, and any rent that is not covered.

So, if you cannot find anyone until March or April, you can withhold those amounts from the deposit and have a claim against the tenants for any amounts not covered by the deposit.

If you did not comply with this statute, and the tenant never signed a lease, then you may not withhold the deposit, and if you do, you are subject to the penalties outlined in the statute, which include forfeiting the deposit amount plus an additional one-half as a penalty.

Notice of one month or two after lease expires? Q The current lease I have with my landlord expired in December 2007 after a 12-month term.

The lease states that I am required to give 60 days' notice if planning to vacate at termination of lease. The lease hasn't been extended and now I'd like to give my notice.

Do I only have to give notice for the period between payment of rent (30 days) or is the lease automatically renewed whenever I pay rent and therefore I would need to give 60 days' notice as it states in the lease?

A No, the lease isn't automatically renewed when you pay your monthly rent. You are currently on a month-to-month tenancy because your lease expired.

If your lease doesn't state anything about carrying over the notice period, then you only need to give a 30-day notice.

If there is a carryover provision, and as you indicated your lease contains a 60-day notice period, then there are different views on whether that carryover provision would apply to you.

Many tenants have successfully argued that this notice provision violates Minnesota Statute 504B.145, which prohibits the automatic renewal of leases for periods of two months or more.

However, courts have decided for the landlord on this same issue, so it is risky to assume that the notice provision is invalid and that you can simply give a 30-day notice. If you can give a 60-day notice, you should do so. If not, you should recognize that your landlord may come after you for the additional month's rent, and there is no guarantee that you will not have to pay it.