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New Landlord and Tenant Law Changes

By Renters Warehouse and Brenton Hayden

Some law changes have gone into effect recently that impact you as a
landlord here in Minnesota. Renters Warehouse wants to make sure your
practices are in compliance with the following:

Receipt for Rent


A landlord is now required to immediately provide a written receipt for rent or
other payments paid in cash if payment is made in person or within
3 business days if payment is not made in person. No particular form of
receipt is required, so you can keep it simple. However many office supplies
companies have receipt books that are carbon copy. This gives you and your
renter a receipt. When dealing with cash, proper documentation is the key to
good bookkeeping.

Applicant Screening Fees


1. A landlord may not collect or hold an applicant screening fee
without providing a written receipt for the fee upon request of the
applicant. You can incorporate the receipt into the application form so you
don't have to give anything additional to the applicant who requests a
receipt.

2. A landlord may not use, cash, or deposit an applicant screening


fee until all prior applicants have either been screened and rejected, or
offered the unit and declined to enter into a rental agreement. A landlord
must also return the applicant screening fee if a prior applicant is offered the
unit and agrees to enter into a rental agreement.

3. A landlord must disclose in writing, prior to taking the applicant


screening fee, the criteria on which the decision to rent will be based.
Screening criteria are important to ensure that each applicant is treated the
same and that applicants know on what basis their application will be
accepted or rejected. This is commonly known as your “Resident Selection
Criteria”. If you have not yet developed written screening criteria you should
devote thoughtful consideration and might consider consulting legal counsel
before simply adopting standard screening criteria. Here is an example.

EXAMPLE: Resident Selection Criteria

Resident Selection and Tenant Screening Criteria:

Fair Housing Statement - We are a fair housing provider. We do not


discriminate against persons on the basis of race, color, religion, national
origin, sex, familial status, disability, creed, marital status, public assistance,
ancestry, and sexual or affectional orientation.

Application Requirements - Your application must be filled out completely


and accurately. An incomplete application may be rejected or not processed.
Any misstatements or omissions made on your application, whether or not
discovered before you move into the building, is grounds for denial of an
application or termination of an existing lease. Information must be legible
and verifiable. If information given on the application cannot be checked out
and verified, this is a reason for rejection. Omission of information, such as an
address or employer, may be grounds for rejection.

Identification and Application Process - Every person over 18 must be


screened and must provide a government-issued photo ID.

Housing History - Applicants must have a positive housing history. We


require the name and last known telephone number of each landlord/property
manager/mortgage or contract for deed payee for each address you have had
for the last three years. Roommate references are not acceptable. A positive
housing history is one of the most important things considered in screening
an application. The refusal of a prior landlord to give a reference, or a
negative reference, may be grounds for rejection. In the case of first time
renters, young people, or students, this requirement may be varied subject to
additional requirements of management.

Eviction Filings - Unlawful detainers or evictions may be a basis for


rejection of an application.

Credit - A positive credit history is required. An adverse bank or credit


reference, high debt, past due or dishonored debt, or the absence of a credit
history may be grounds for rejection.

Income - Income from valid sources must be sufficient to pay the applicant’s
rent and other predictable living expenses. To be counted as household
income, amounts must be verifiable, reliable, and predictable.

Business Relationship - The relationship between a landlord and tenant is


a business relationship. A courteous and businesslike attitude is required
from both parties. We reserve the right to refuse rental to anyone who is
verbally abusive, swears, is disrespectful, makes threats, has been drinking,
is argumentative, or in general displays an attitude at the time of the unit
showing and application process that causes management to believe we
would not have a positive business relationship.

Occupancy - Maximum number of residents equal to two persons per


bedroom.
Criminal History - Applicants who have a criminal history may be rejected.

Employment Standard: All Applicants must be employed. The employment


must be verifiable.
End Example.

4. A landlord must notify the applicant within 14 days of rejection,


identifying the criteria the applicant failed to meet and must return the
applicant screening fee if the applicant is rejected for any reason not listed in
the required disclosure. Sometimes there is a combination of factors relevant
to the resident selection process and the landlord should make clear that
multiple factors informed the overall decision.

5. A prospective tenant who provides materially false information on


the application or omits material information requested is liable for
damages, plus a civil penalty of up to $500, civil court filing costs, and
reasonable attorney fees.

Abandoned Property
If a resident abandons personal property, a landlord must only retain the
property for 28 days. A 14 day notice to the resident before disposing of the
property is required ONLY if the landlord plans to sell the property. If the
landlord elects to discard or do anything other than sell the property, no
notice is required by state law.

Late Fees
Late fees for failing to pay rent on time are now limited to 8% of the overdue
rent payment. The only exception to this is if a federal statute, regulation, or
handbook provides for federally subsidized properties to charge late fees that
conflict with the 8% limitation.

Attorney Fees
Residential leases that contain a provision providing that management may
collect attorney fees from the resident will now be construed to provide
residents the right to collect attorney fees if successful in a legal action.
Resident collection of attorney fees will be limited to the same type of action,
circumstances, and to the same extent that management would be allowed
to collect from the resident under the lease.

Staying up to speed on the changes in legislation is very vital to running a


successful rental property. Failing to do so can cost you lost of money and
create un-wanted liability for you and your business. This is one main reason
many choose to hire a professional property management company like
Renters Warehouse. It is part of our job to have our ear to the ground and
protect the best interests of the landlord and tenant. To find out how Renters
Warehouse can help you, contact them today at 952.470.8888 or
info@renterswarehouse.com
Shared and Co-written by Brenton Hayden, Golden Valley- MN, CEO of
RentersWarehouse.com

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