You paid $50 to apply for an apartment. You didn’t get it. Maybe nobody ever told you why. Is that $50 gone?
Not necessarily. But let’s kill an assumption first: Minnesota law doesn’t limit the screening fee to what the background check actually cost. It doesn’t cap the fee at all. I went looking for the cap in the screening-fee statute, in the chapter’s definitions section, and in every fee and deposit section of chapter 504B. It isn’t there.
What the Legislature did instead is more interesting. Minn. Stat. § 504B.173 doesn’t care much how big the fee is. It cares when the landlord takes it, when the landlord cashes it, and when the landlord has to give it back. And a landlord who skips the paperwork can end up refunding the fee whether or not you’d have gotten the apartment.
One thing up front. This piece covers state and federal law. If your city has its own rental-screening rules, those are a separate question.
Is there a limit on rental application fees in Minnesota?
Not a dollar limit. The statute never says how much. Chapter 504B’s definitions section, § 504B.001, doesn’t even define “applicant screening fee”.
The only word I found in chapter 504B about the size of the fee shows up in a different section, the one on prelease deposits, meaning money a landlord takes to hold a unit before there’s a lease. That section says a prelease deposit “does not include the payment of a reasonable applicant screening fee used to conduct a background check on the prospective tenant.” § 504B.175, subd. 1.
That’s a definition, not a cap. But read it the other way around. A “screening fee” that isn’t reasonable, or isn’t used for a background check, starts to look like money paid to a landlord before a rental agreement exists, which is how the statute defines a prelease deposit. And a prelease deposit can be taken only under a conspicuous written agreement saying when it comes back, and it has to come back within seven days of that happening. § 504B.175, subd. 2(a). A landlord who breaks those rules owes the deposit “plus one-half of that amount as a penalty”, unless the two of you actually sign a lease and the landlord applies the deposit to rent or the security deposit as the statute requires. Subds. 3, 4. That’s my reading of how the two sections fit together. I haven’t found a court that’s said so.
The landlord has homework before it takes your money
More than most landlords do. Under § 504B.173, subdivision 1, a landlord may not:
(1) 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;
So a fee to put you on a list for a building with nothing coming open is the exact thing clause (1) is aimed at. Notice the standard, though: “knows or should have known”. A landlord who honestly expected a unit to open up is in a different spot from one who’s collecting fees on a full building.
The landlord also can’t collect or hold your fee without giving you a written receipt if you ask for one, and the receipt can be built into the application form. Subd. 1(2).
Then the clause I’d most like every applicant to know. The landlord may not:
(3) 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.
That one changes the economics of the open house. Ten people apply for one unit, and the landlord can’t cash ten fees. Your check isn’t supposed to be cashed until everybody ahead of you is out of the running.
And before taking the fee at all, the landlord has to put two things in writing:
(i) the name, address, and telephone number of the tenant screening service the landlord will use, unless the landlord does not use a tenant screening service; and
(ii) the criteria on which the decision to rent to the prospective tenant will be based;
— Minn. Stat. § 504B.173, subd. 3(1)
Write that down if you’re applying somewhere. No written criteria, no screening company named (if one’s being used), and the landlord took your money anyway? That’s a violation before anybody’s looked at your credit.
When do I get my application fee back?
The statute names three situations.
| What happened | Fee comes back? | Where it says so |
|---|---|---|
| You were rejected for a reason that wasn’t in the written criteria | Yes, all of it | § 504B.173, subd. 2(a)(1) |
| The landlord offered the unit to an earlier applicant, who agreed to rent it | Yes, all of it | § 504B.173, subd. 2(a)(2) |
| The landlord never ran a reference check or never pulled a credit or screening report | The part not used for those purposes | § 504B.173, subd. 2(b) |
The second row is the answer to the question at the top of this piece. If the apartment went to somebody who applied before you did, the landlord owes your fee back. That’s one more reason the landlord isn’t supposed to cash it early.
The third row is the closest Minnesota comes to an actual-cost rule, and it’s narrower than people think:
(b) If the landlord does not perform a personal reference check or does not obtain a consumer credit report or tenant screening report, the landlord must return any amount of the applicant screening fee that is not used for those purposes.
It doesn’t say the fee has to match the cost of a report the landlord did pull. It says money that wasn’t spent on screening comes back when the screening didn’t happen.
As for how you get it back, the landlord can mail it, destroy your check if you ask and you paid by check, or hold it for you to pick up. Subd. 2(c).
They turned me down. Do they have to tell me why?
They have to tell you which rule you didn’t meet, and fast. The landlord must:
(2) notify the applicant within 14 days of rejecting a rental application, identifying the criteria the applicant failed to meet.
— Minn. Stat. § 504B.173, subd. 3
Fourteen days, from the rejection. And the notice has to point back to the criteria the landlord disclosed up front. Put subdivisions 2 and 3 together and the system works like this: the landlord tells you the rules before you pay, and if you’re rejected, the landlord tells you which rule sank you. If the reason isn’t one of the rules, you get your money back.
What can’t a landlord hold against me?
Since January 1, 2025, three things. The 2024 Legislature added subdivision 3a:
No landlord may deny a rental application based on any of the following:
(1) a pending eviction action;
(2) any court file that is not public, has been expunged, or has been destroyed; or
(3) any eviction action that has not resulted in a writ of recovery of premises and order to vacate, as that term is defined in section 504B.001, subdivision 15.
That came in through 2024 Minn. Laws ch. 118, § 12, which has no effective date of its own, so the act’s general clause controls: “Except as otherwise specified, this act is effective January 1, 2025.”
Clause (3) is the big one. An eviction case can be filed and then settled or dismissed without the landlord ever getting a writ. Under subdivision 3a, a filing alone isn’t a lawful reason to turn you down. The same 2024 act tightened the rules for the screening companies, too: a residential tenant screening service now has to check Minnesota Court Records Online no more than 24 hours before it issues a report, § 504B.241, subd. 4(b), and a person injured by a violation of § 504B.241 can sue the screening service or the landlord for the greater of $1,000 or actual damages, plus costs, investigation costs, and reasonable attorney fees. § 504B.245. I walked through those changes, and what expungement does to a screening report, at /news/minnesota-eviction-expungement/.
And the criteria themselves have limits. Minnesota’s Human Rights Act makes it an unfair discriminatory practice to refuse to rent because of a protected status, including “status with regard to public assistance,” or to use a rental application form that expresses a limitation based on one. § 363A.09, subd. 1(1), (3). I covered how Minnesota’s list runs longer than the federal one at /news/minnesota-fair-housing-discrimination-363A09/.
What if a screening report was the reason?
Then two other sets of rules kick in.
Under Minnesota law, if a screening company’s report was used within the past 30 days to deny you a rental, or to raise your rent or security deposit, the company has to show you what’s in your file, and where it came from, for free, if you ask and give proper identification. § 504B.241, subd. 1(b). If you dispute something, it has to reinvestigate, and it has to delete anything found inaccurate or that can no longer be verified. Subd. 2.
Federal law adds a notice of its own. A denial tied to your application counts as an “adverse action” under the Fair Credit Reporting Act. 15 U.S.C. § 1681a(k)(1)(B)(iv). When a landlord takes adverse action based in whole or in part on a consumer report, § 1681m(a) requires the landlord to give you notice of it, the screening company’s name, address, and phone number, a statement that the company “did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken”, notice of your right to a free copy of the report within a 60-day window, and notice of your right to dispute it. If a credit score was used, the landlord also has to disclose the score.
So on their face, a rejection that leaned on a consumer report triggers two notices: the federal adverse-action notice and Minnesota’s 14-day criteria notice. If the bad item came off a credit report rather than a tenant screening file, I wrote about what to do when a bureau verifies an error anyway at /news/credit-report-error-wont-get-fixed/.
The landlord’s penalty tops out at $100. Yours is $500.
Not a fortune. Subdivision 4(a):
(a) In addition to any other remedies, a landlord who violates this section is liable to the applicant for the applicant screening fee plus a civil penalty of up to $100, civil court filing costs, and reasonable attorney fees incurred to enforce this remedy.
Your fee, up to $100 on top, your filing costs, and reasonable attorney fees. The fee-shifting is what gives that teeth; a landlord who stonewalls a $50 refund can end up paying the lawyer who collected it. And it’s “In addition to any other remedies,” so it doesn’t crowd out a discrimination claim or a screening-report claim.
Now read subdivision 4(b). An applicant who gives “materially false information” on the application, or leaves out material information the landlord asked for, is liable to the landlord for damages, “plus a civil penalty of up to $500,” plus filing costs and reasonable attorney fees. So the Legislature priced a landlord’s violation at up to $100 and an applicant’s lie at up to $500. Fill out the application straight.
I couldn’t find a published Minnesota appellate decision applying § 504B.173. I searched CourtListener’s Minnesota appellate collection by section number, by “applicant screening fee”, and by the plain phrase “screening fee” with “landlord” and “applicant”. The one published opinion I found that cites the section mentions it in passing, in a case about utility billing. So what’s above is the text, read straight.
Two neighbors are worth knowing. The screening fee isn’t part of the Total Monthly Payment that has to go on page one of your lease; I covered that rule at /news/minnesota-apartment-fees-total-monthly-payment-504b120/. And once you do sign, the security deposit runs on its own statute, with its own deadlines, at /news/minnesota-security-deposit-504b178/.
The fee isn’t the landlord’s money until the landlord follows the rules.
Madgett Law, LLC
Madgett Law, LLC handles disputes between landlords and tenants and consumer claims in Minnesota. We also bring claims against tenant screening companies and landlords that keep reporting expunged eviction files, under Minn. Stat. §§ 504B.241 and 504B.245 and the federal Fair Credit Reporting Act. More on that work is on our general litigation page. If a screening fee, a screening report, or a rejection you can’t get an answer on is standing between you and a lease, send us a message.
Sources: Minn. Stat. § 504B.173 (2025), subd. 1(1)–(3) (no fee when no unit is available; receipt on request; no cashing until prior applicants are resolved), subd. 2(a)(1)–(2), (b), (c) (return of the fee), subd. 3(1)(i)–(ii), (2) (written disclosures before accepting a fee; 14-day rejection notice identifying criteria), subd. 3a (denials based on pending, non-public, expunged, or destroyed files, or evictions without a writ), subd. 4(a)–(b) (remedies). 2024 Minn. Laws ch. 118, § 12 (adding subd. 3a), §§ 22–23 (amending §§ 504B.241, subd. 4, and 504B.245), § 32 (general effective date, January 1, 2025). Minn. Stat. § 504B.001, subds. 1, 15 (definitions; writ of recovery). Minn. Stat. § 504B.175, subd. 1 (prelease deposit defined; reasonable applicant screening fee excluded), subd. 2(a) (written agreement; seven-day return), subds. 3, 4 (application to rent or deposit; remedy). Minn. Stat. § 504B.235, subds. 3, 4 (residential tenant report; residential tenant screening service). Minn. Stat. § 504B.241, subd. 1(b) (free disclosure after a denial within 30 days), subd. 2 (reinvestigation and deletion), subd. 4(b) (24-hour court-records check). Minn. Stat. § 504B.245 (civil action; greater of $1,000 or actual damages). Minn. Stat. § 363A.09, subd. 1(1), (3) (unfair discriminatory practices in rental; application forms). 15 U.S.C. § 1681a(k)(1)(B)(iv) (adverse action defined); 15 U.S.C. § 1681m(a)(1)–(4) (duties of users taking adverse action), law.cornell.edu/uscode/text/15/. This article is general information about Minnesota and federal law. It is not legal advice, it does not create an attorney–client relationship, and no particular outcome is promised or implied.