Security Deposit Demand Letter

A security deposit demand letter is a formal written request to your landlord to return your security deposit. Under Minnesota law, your landlord must return your deposit – or provide a written statement explaining any deductions – within 21 days after your tenancy ends and you provide a forwarding address ( Minn. Stat. § 504B.178 ). If your landlord misses this deadline or withholds your deposit without a valid reason, this letter is the first step toward getting your money back.

Sending a demand letter creates a written record that you asked for your deposit. If your landlord still refuses to return it, this letter strengthens your case when you file in conciliation court (small claims court).

When to Use This Template

• The 21-day deadline has passed: Your landlord has not returned your security deposit or provided a written statement of deductions within 21 days of your tenancy ending and your providing a forwarding address
• Improper deductions: Your landlord returned only part of your deposit and deducted amounts for normal wear and tear or other charges that are not allowed under Minnesota law
• No itemized statement: Your landlord kept part or all of your deposit but did not provide a written statement listing the specific reasons for each deduction
• Bad faith withholding: You believe your landlord is keeping your deposit without any legitimate reason
• Before filing in court: You want to give your landlord one final chance to return the deposit before you file a claim in conciliation court

Understanding Your Rights

The 21-Day Rule

Your landlord must return your security deposit within 21 days after both of the following have occurred:

1. Your tenancy has ended (you have moved out and returned the keys)
2. You have provided your landlord with a forwarding address in writing

The 21-day clock does not start until both conditions are met. If you moved out but did not provide a forwarding address, your landlord is not yet required to return the deposit. This is why it is important to provide your forwarding address in writing – ideally in your notice to vacate or in a separate letter delivered at move-out.

What Your Landlord May Deduct

Your landlord may withhold money from your deposit only for these reasons ( subd. 3 ):

• Unpaid rent: Any rent you owe through the end of your tenancy
• Damage beyond normal wear and tear: Damage you caused that goes beyond what is expected from ordinary use of the unit

Your landlord may not deduct for:

• Normal wear and tear (minor scuffs on walls, small nail holes, worn carpet from everyday use, faded paint)
• Cleaning costs if you left the unit in reasonably clean condition
• Pre-existing damage that was present when you moved in
• Repairs needed because of the landlord’s failure to maintain the property

Interest on Your Deposit

Your landlord must pay you simple interest at the rate of 1% per year on your security deposit for any period during which the landlord holds the deposit ( subd. 2 ). This interest must be included in the amount returned to you.

The Bad Faith Penalty

If your landlord withholds your deposit in bad faith, the court may award you a penalty of up to $500 in addition to the return of your deposit ( subd. 7 ). Bad faith means your landlord kept your money without a reasonable basis – for example, refusing to return the deposit without any explanation, fabricating damage claims, or ignoring your requests entirely.

Move-Out Inspection Rights

Under Minnesota law, you have the right to be present at a move-out inspection of your rental unit ( Minn. Stat. § 504B.182 ). Your landlord must provide you with reasonable notice of the inspection. The 2024 amendment to this statute strengthened the inspection notice requirement – your landlord must inform you of your right to be present at the inspection. Being present at the inspection helps you dispute any false damage claims later.

How to Use This Template

1. Download the template in your preferred format (PDF or DOCX).
2. Confirm the 21-day deadline has passed. Count 21 days from the date your tenancy ended and you provided a forwarding address. If 21 days have not yet passed, wait until they have.
3. Fill in your full legal name as it appears on your lease.
4. Fill in your landlord’s full legal name and address. For a property management company, use the company’s legal name and registered business address.
5. Include the rental property address, including apartment or unit number.
6. State the move-out date – the date you vacated the unit and returned the keys.
7. State the date you provided your forwarding address and how you provided it (in your notice to vacate, by separate letter, etc.).
8. State the amount of your security deposit, including any interest owed.
9. Calculate the interest. Multiply your deposit by 1% per year, then multiply by the number of years (or fraction of a year) your landlord held the deposit. For example, if your deposit was $1,000 and your landlord held it for two years, the interest owed is $20.
10. Describe any improper deductions your landlord has already taken, if applicable. Explain why each deduction is improper.
11. State the total amount you are demanding – your deposit plus interest, minus any deductions you agree are valid.
12. Set a deadline for the landlord to respond – 14 days is a common and reasonable timeframe.
13. Sign and date the letter.
14. Send by certified mail, return receipt requested. Keep a copy of the letter, the certified mail receipt, and the signed return receipt card.

What to Include in Your Letter

Your demand letter should clearly state:

• Your full name and current mailing address
• The landlord’s full name and address
• The rental property address you moved out of
• The date you moved out and returned keys
• The date you provided a forwarding address
• The amount of your security deposit
• The interest owed on the deposit
• Any deductions you dispute and why they are improper
• The total amount you are demanding
• A deadline for the landlord to pay (typically 14 days)
• A statement that you will file in conciliation court if the landlord does not return the deposit by the deadline
• A reference to the bad faith penalty under subd. 7

Key Provisions Explained

Demand for Return

The core of the letter states that your landlord has failed to return your deposit within the required 21-day period and demands immediate payment of the full amount owed, including interest.

Improper Deductions Section

If your landlord returned a partial deposit with deductions you believe are improper, the letter identifies each disputed deduction and explains why it is not valid. Common reasons a deduction is improper include:

• The damage described is normal wear and tear, not tenant-caused damage
• The damage existed before you moved in (reference your move-in inspection report or photos)
• The landlord is charging for improvements, not repairs (such as replacing old carpet with new carpet of higher quality)
• The deduction amount is unreasonable compared to the actual cost of repair

Bad Faith Notice

The letter puts your landlord on notice that you may seek the bad faith penalty of up to $500 under subd. 7 if the matter goes to court. This can motivate landlords to return the deposit rather than face a larger judgment.

Court Filing Notice

The letter states that if the landlord does not return the deposit by the deadline, you intend to file a claim in conciliation court. This demonstrates that you are serious about enforcing your rights.

Minnesota-Specific Requirements

Filing in Conciliation Court

If your landlord does not respond to your demand letter or refuses to return your deposit, you can file a claim in conciliation court (Minnesota’s small claims court). Here is what you need to know:

How to File

1. Go to the court in the county where the rental property is located or where the landlord resides
2. Fill out a Statement of Claim form (available at the court or on the Minnesota Judicial Branch website)
3. Pay the filing fee – fees vary by county and the amount of your claim (typically $50 to $90)
4. The court will schedule a hearing and notify your landlord

What to Bring to Your Hearing

• A copy of your demand letter and proof it was sent (certified mail receipt)
• Your lease agreement
• Proof of the security deposit amount (receipt, cancelled check, or bank statement)
• Your forwarding address and proof you provided it to the landlord
• Move-in and move-out photos or video of the unit
• Any written communication with the landlord about the deposit
• The landlord’s itemized statement of deductions, if you received one
• Receipts or estimates that dispute the landlord’s claimed repair costs

What You Can Recover

In conciliation court, you can ask for:

• Return of your full security deposit (minus any valid deductions)
• Interest at 1% per year for the time the landlord held the deposit
• Bad faith penalty of up to $500 if the landlord withheld the deposit without justification
• Court filing fees and certified mail costs

Conciliation court handles claims of $20,000 or less. Security deposit disputes almost always fall within this limit.

Common Mistakes to Avoid

1. Not providing a forwarding address. The 21-day clock does not start until you give your landlord a forwarding address in writing. If you never provided one, do so immediately – the landlord’s obligation to return the deposit does not begin until you do.
2. Sending the letter too early. Make sure 21 days have actually passed since both your move-out date and the date you provided a forwarding address. Sending a demand before the deadline weakens your position.
3. Not keeping proof of delivery. Send your demand letter by certified mail with return receipt requested. Without proof that your landlord received the letter, you have no evidence you made the demand.
4. Accepting a partial refund as final. If your landlord sends a partial refund, you can still demand the remainder. Cashing a partial refund check does not waive your right to the rest unless you signed a written release.
5. Not documenting the unit at move-out. Take dated photos and video of every room, appliance, and surface before you return the keys. This evidence is critical if your landlord claims damage that did not exist.
6. Forgetting to request an inspection. Ask for a move-out inspection in writing before you leave. Under Minn. Stat. § 504B.182 , you have the right to be present. An inspection protects you against fabricated damage claims.
7. Waiting too long to act. Minnesota has a six-year statute of limitations for breach of contract ( Minn. Stat. § 541.05 ), but the longer you wait, the harder it is to gather evidence and the less seriously courts may take your claim. Act promptly.
8. Not calculating interest. Many tenants forget that they are owed 1% simple interest per year on their deposit. Include this amount in your demand.

Related Documents

Related Resources

Getting Your Security Deposit Back in Minnesota

• Minnesota Attorney General – Tenants’ Rights – free handbook covering all major landlord-tenant topics
• HOME Line – free tenant hotline (612-728-5767) providing legal advice to Minnesota renters
• Minnesota Judicial Branch - Conciliation Court Forms – forms for filing in small claims court