Q: I am a landlord of a condo unit in south Minneapolis that I have rented out for almost five years. My previous tenant was into her third year on our lease, with it expiring at the end of April 2019. The lease requests that renters give me a 60-day notice when the lease is about to expire, or renew it for another year.
My tenant recently gave her notice with months remaining on her lease. This tenant has always called or texted me regarding her problems or questions about the unit. With no warning, she e-mailed me, telling me that she had vacated her apartment. She stated in the e-mail that she wants her security deposit back, plus 1 percent interest, and that she left the unit in better condition than when she moved in, which is not true. She sent a threatening e-mail that included a statement saying she had better get her security deposit back, or she’ll take me to court and will end up getting all of her rent back that she has paid me, since I didn’t have a rental license. I honestly did not know that I needed a rental license.
Due to her sudden departure, I will be putting my condo up for sale to reduce some of the stress. Any ideas on how to proceed with this tenant? Do I wait for a Summons and Complaint to come from her before responding?
A: Do not wait for a Summons and Complaint to arrive from this tenant before getting in touch with her. Since she left the unit and told you she was breaking the lease early, you must send her a letter within 21 days from the day the lease was terminated, the day you received her e-mail. In that letter, you should include all amounts she may still owe you, such as past unpaid rent or utility bills, and costs you incur repairing damages to the unit beyond ordinary wear and tear. In your letter, include a list of itemized costs, along with a check for the remainder of her security deposit. Remember, your tenant lived in the unit for two years, and you are permitted by law to charge only for repairs or damage beyond ordinary wear and tear. The interest rate on your tenant’s security deposit is 1 percent simple interest. For example, if she paid you a $1,000 security deposit, that deposit would earn interest of $10 each year your tenant lived there.
In Minneapolis, landlords are required to purchase a rental license for every rental dwelling, including single-family rental dwellings, rental units in owner-occupied duplexes, and rooming and shared-bath units, except if they are in a licensed lodging house. The fee is nominal and based on a tier system. Most courts will not allow a tenant to be unjustly enriched by living rent-free just because their landlord didn’t realize they needed a $70 rental license. It would not be fair to landlords if tenants were able to collect all of their paid rent back, after receiving housing for over two years. If you obtain a license from the city, you could also include as a cost the rent she owes for the remaining months left on her lease. If you follow this course of action, you should obtain a rental license as soon as possible.
Your final option is to return her security deposit with interest, not charge her for damages, and rent or sell your condo when you’re ready. Make sure to obtain a rental license if you decide to rent out your condo instead of selling it.
Kelly Klein is a Minneapolis attorney. Participation in this column does not create an attorney/client relationship with Klein. Do not rely on advice in this column for legal opinions. Consult an attorney regarding your particular issues. E-mail renting questions to firstname.lastname@example.org, or write to Kelly Klein c/o Star Tribune, 650 3rd Av. S., Minneapolis, MN 55488. Information provided by readers is not confidential.