What Background Checks Can a Minnesota Landlord do on Potential Tenants?
What Background Checks Can a Minnesota Landlord do on Potential Tenants?
Typically Minnesota landlords screen potential tenants through three main background checks. First a landlord may check a potential tenant’s criminal background through their criminal history. They can evaluate whether a potential tenant has prior felonies, prior convictions for violent crime, or other potentially problematic issues in the past.
Second, a Minnesota landlord can screen a client’s credit history and inquire into their financial means to pay for the rental unit. This is usually done through a third-party agency who gathers credit information and provides it to the landlord. Landlords should have specific credit criteria that is applied to all renters in order to avoid claims of discrimination or other impermissible activity.
Third, a Minnesota landlord may inquire into a potential tenant’s rental history. This usually involves contacting past landlords and inquiring as to the tenant’s past rent, past payment history, and whether there were any prior concerns. Again, landlords should formulate specific criteria concerning this check that is applied fairly and equally to all applicants.
Landlords should also check applicable city codes for their rental property to ensure that their city does not impose additional restrictions on these background checks. For instance, Minneapolis has recently imposed very stringent requirements on tenant screening that are far stricter than state law. Running afoul of these requirements could be costly and highly problematic for Minneapolis landlords.
Tenant Screening Requirements
Additionally, Minnesota Statutes Section 504B.173 places several requirements on landlords with regards to tenant screening, specifically tenant screening fees. First, a landlord must provide a tenant with the name of the screening service they use and the criteria they base screening on prior to accepting a screening fee. Additionally, this statute states that a landlord may not:
Charge an applicant a screening fee when the landlord knows or should have known that no rental unit is available at that time or will be available within a reasonable future time;
Collect or hold an applicant screening fee without giving the applicant a written receipt for the fee, which may be incorporated into the application form, upon request of the applicant; or
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.
Basically, a landlord must not charge a tenant a screening fee if they know that they have no unit available to rent, must give a written receipt for the fee, and must not use the fee if they have not dealt with all prior applicants. The last requirement can be particularly difficult for landlords who are considering a large number of applicants for a unit and wish to screen multiple potential tenants at the same time.
Additionally, Minnesota law provides that the landlord must return the screening fee if:
The applicant is rejected for any reason not listed in the disclosed criteria; or
A prior applicant is offered the unit and agrees to enter into a rental agreement
If the landlord does not end up doing the background check, the applicant screening fee must be returned (or whatever part of the fee that remains if some screening is completed). Lastly, if a tenant is rejected by a landlord, the landlord must provide the tenant with notice of the rejection within 14 days and must give the tenant notice of the reasons why they were rejected.
These requirements can be extremely burdensome to landlords, particularly those who do not regularly screen tenants. While many larger landlords screen hundreds of tenants a year, landlords with fewer units may only screen several tenants a year, making these requirements more difficult to remember and comply with.
If you are a Minnesota landlord or tenant with questions about the screening or background check process, call the experienced landlord-tenant attorneys at RAM Law PLLC. Our attorneys can be reached by phone at 651-468-2103 or through submitting our online consultation form.