Property Owner Reminders From The City Of Minneapolis

Just like St. Paul, The City Of Minneapolis recently put several new tenant protection policies into place. The measures pertain to screening potential residents, security deposit limits, and advance notice of sale. Here is a breakdown of what these changes entail:

Renter Screening:

In Minneapolis, there are two options for screening potential renters. Owners can use the inclusive screening criteria in the ordinance or do an individual assessment. Even if a rental property owner doesn't charge an application fee, they have to use one of these options.

1. Inclusive Screening Criteria:

Under this option, standards can't be stricter than the standards in the ordinance, but they may be less restrictive. The inclusive guidelines cover criminal, rental, and credit history.

Criminal History:

-Cannot consider misdemeanors with dates of sentencing older than three years

-Cannot consider felonies with dates of sentencing older than seven years

-Cannot consider convictions for certain felonies with dates of sentencing older than 10 years, including: first-degree murder, second-degree murder, third-degree murder, first-

degree manslaughter, kidnapping, first-degree criminal sexual conduct, first degree assault, first degree arson and first degree aggravated robbery

Rental History:

-Cannot consider evictions where judgment was entered three or more years from date of application

-Cannot consider settlements entered one or more years before applicant submits application

-Cannot consider dismissed evictions or evictions resulting in judgment for the applicant

-Cannot screen out for insufficient rental history

-If a landlord requires an income equal to three times the rent or higher, the landlord must allow an exception where the applicant can demonstrate a history of successful rent payment with an income less than three times the rent

Credit History:

-Cannot screen based on credit score, but can consider information in a credit report if relevant to ability to pay rent

-Cannot screen out for insufficient credit history

2. Individual Assessment Option:

If a property owner wants to use criteria stricter than those in the ordinance, they must evaluate applicants using an individual assessment. The property owner must consider all additional evidence provided by the applicant to explain, justify, or negate the relevance of information revealed by screening.

In an individual assessment, a property owner must consider:

  • The nature and severity of the incidents that would lead to a denial

  • The number and type of the incidents

  • The time that has passed since the incidents occurred

  • The age of the individual at the time the incidents occurred

Security Deposits:

Security deposits are capped at a single month's rent. If a property owner chooses to ask for more than a single month's rent up front, the security deposit is limited to 50% of a single month's rent. In this case, the renter must have the ability to pay the security deposit in up to three installments.

A common example of this is when a landlord asks for both the first and last month's rent in advance--in this situation, the security deposit would be limited to 50% of a month's rent, and the renter must be able to pay the security deposit in installments over three months.

In situations where a renter has a referral from a government agency or non-profit service provider, one and one-half month's rent may be collected as a security deposit.

When returning a security deposit to a renter, landlords must include a copy of Minnesota Statutes 504B.178 and Minneapolis Code of Ordinances 244.2040.

Advance Notice Of Sale:

Owners of naturally occurring affordable housing must give the City at least 60 days' notice before making their property available for purchase.

Naturally occurring affordable housing includes apartments with five or more units in which at least 20% of the units are affordable to households earning less than 60% of area median income.

Changes can be hard to navigate sometimes, but that's what Housing Hub is here for! If you have any questions about what these new policies mean for you or your properties, give us a call and we would be happy to set up a meeting or Zoom call with you!

In case you missed it: New St. Paul Tenant Protections