Letter Template Demanding Landlord Return Security Deposit to Renter

Letter Template

Sent by U.S. Mail

[DATE]

[LANDLORD]
[STREET ADDRESS]
[CITY], [STATE] [ZIP]

Re: [FORMER TENANT] & Your Violations of Minnesota Statutes Chapter 504B

Dear [LANDLORD]

This firm represents [FORMER TENANT] in the above referenced matter. As you know, [FORMER TENANT] rented your property at [TENANT’S FORMER ADDRESS]. The tenancy terminated on [DATE], and [FORMER TENANT] provided you with his mailing address on [DATE], [DATE], and [DATE]. Within three weeks (21 days) after the termination of the tenancy, and after receiving [FORMER TENANT]’s mailing address or delivery instructions, you were required to return his security deposit with interest or furnish to him a written statement showing the specific reason for the withholding of the deposit or any portion thereof. You did neither.

Under Minnesota Statutes Chapter 504B, [FORMER TENANT] is now entitled to seek the following amounts:

1. $[XXXX] security deposit
2. $[XXXX] statutory penalty for failing to return the security deposit (an amount equal to the portion withheld, plus interest)
3. Up to $500 statutory penalty for bad-faith retention
4. Interest at 1% simple per annum

We are prepared to proceed with legal action, including an action in conciliation court. If we instead commence an action in district court, we will seek the statutory costs allowed to the prevailing party under Minnesota law. We will also seek attorney fees, but only if your lease grants you the right to recover attorney fees, in which case the statute makes that right reciprocal in [FORMER TENANT]’s favor. Your exposure could be substantial.

[FORMER TENANT] would prefer to give you one last opportunity to settle this matter before proceeding with legal action. Accordingly, to fully settle this matter, send payment of $[XXXX] by [DATE] to

[FORMER TENANT]
[STREET ADDRESS]
[CITY], [STATE] [ZIP]

If you have any questions, please feel free to contact our office.

Sincerely,

**
[ATTORNEY]
Attorney at Law
[PHONE]
[EMAIL]**

What Minnesota Law Actually Provides

Before you send this letter, understand exactly what the security-deposit statute gives you and what it does not. Stating the wrong deadline or the wrong remedy weakens the demand, so get each item right.

The deadline runs from termination, plus your mailing address

A common mistake is to assume the clock starts when you hand over a forwarding address. It does not. The deadline is conjunctive: your landlord must return the deposit (with interest) or furnish a written statement of the specific reason for any withholding within three weeks after the termination of the tenancy, and after receiving your mailing address or delivery instructions. Both conditions must be met. The statute states the period as “three weeks,” which equals 21 days. Minn. Stat. § 504B.178, subd. 3(a) (available at https://www.revisor.mn.gov/statutes/cite/504B.178).

A separate five-day deadline applies if you left because the building was legally condemned through no fault of your own. Minn. Stat. § 504B.178, subd. 3(a) (available at https://www.revisor.mn.gov/statutes/cite/504B.178).

The penalty for failing to return the deposit

If your landlord misses the deadline, the law imposes a penalty on top of the deposit itself. The landlord becomes liable for damages “in an amount equal to the portion of the deposit withheld by the landlord and interest thereon . . . as a penalty, in addition to the portion of the deposit wrongfully withheld by the landlord and interest thereon.” Minn. Stat. § 504B.178, subd. 4 (available at https://www.revisor.mn.gov/statutes/cite/504B.178). In practice that effectively doubles the wrongfully withheld amount, and you do not need to prove bad faith to claim it.

The separate bad-faith penalty is a cap, not a fixed amount

Bad-faith retention adds a second, distinct penalty. The statute subjects the landlord to “punitive damages not to exceed $500 for each deposit in addition to the damages provided in subdivision 4.” Minn. Stat. § 504B.178, subd. 7 (available at https://www.revisor.mn.gov/statutes/cite/504B.178). The $500 figure is a ceiling, not an automatic award, so describe it as “up to $500,” not a flat $500. Retention is presumed to be in bad faith if the landlord failed to comply with the return requirements and does not return the deposit within two weeks after you commence an action to recover it. Minn. Stat. § 504B.178, subd. 7 (available at https://www.revisor.mn.gov/statutes/cite/504B.178).

Interest is 1% simple, and it does not accrue forever

Your deposit bears “simple noncompounded interest at the rate of one percent per annum.” Minn. Stat. § 504B.178, subd. 2 (available at https://www.revisor.mn.gov/statutes/cite/504B.178). Do not claim a higher, floating, or compounding rate. The interest is computed from the first day of the month following full payment of the deposit “to the last day of the month in which the landlord, in good faith, complies with the requirements of subdivision 3 or to the date upon which judgment is entered in any civil action involving the landlord’s liability for the deposit, whichever date is earlier.” Minn. Stat. § 504B.178, subd. 2 (available at https://www.revisor.mn.gov/statutes/cite/504B.178). Any interest amount less than $1 is excluded. Minn. Stat. § 504B.178, subd. 2 (available at https://www.revisor.mn.gov/statutes/cite/504B.178).

Do not overstate attorney fees

The security-deposit statute does not award attorney fees. It authorizes the deposit plus interest, the subdivision 4 penalty, and up to $500 in bad-faith punitive damages, and nothing more on fees. A separate residential-lease statute makes a fee provision reciprocal: if your lease specifies an action, circumstances, or an extent to which the landlord may recover attorney fees, you are entitled to attorney fees if you prevail in the same type of action, under the same circumstances, or are entitled to costs under section 549.02, and to the same extent as specified in the lease for the landlord. Minn. Stat. § 504B.172 (available at https://www.revisor.mn.gov/statutes/cite/504B.172). In other words, your attorney-fee recovery runs only where the lease grants the landlord that right (then made reciprocal) or where you are entitled to costs under section 549.02. Court costs are generally available to a prevailing party in an action commenced in district court under Minn. Stat. § 549.02, subd. 1 (available at https://www.revisor.mn.gov/statutes/cite/549.02). By its own terms, that section “does not apply to actions removed to district court from conciliation court,” and it governs district-court costs rather than conciliation-court costs (which are set by a separate regime). Minn. Stat. § 549.02, subd. 1 (available at https://www.revisor.mn.gov/statutes/cite/549.02). So do not rely on § 549.02 for cost recovery if you file in conciliation court: limit the threat to court costs as the prevailing party, and frame attorney fees as available only if your lease provides them (made reciprocal by statute) or if you are entitled to costs under section 549.02.

Where you can sue

If your landlord ignores the demand, you can bring an action to recover the deposit, including in conciliation court. The action “may be brought in the county where the rental property is located, or at the option of the tenant, in the county of the landlord’s residence.” Minn. Stat. § 504B.178, subd. 9 (available at https://www.revisor.mn.gov/statutes/cite/504B.178).