A lease agreement in Minnesota is a contract prepared to define the terms and conditions of the agreement between a landlord and a tenant.
With this document, the landlord can officially rent out their rental property for commercial or residential purposes in exchange for rent from the tenant. Some of the negotiations that must be agreed upon by both parties and then included in the lease agreement for signing include utilities, fees, and deposits. Therefore, Minnesota landlords should screen their tenants accordingly since it becomes legally binding once the document is signed.
Types of Lease Agreement
There are different types of lease agreements you can prepare in Minnesota. These are as follows:
Association of realtors
An association of realtors lease agreement in Minnesota is a contract prepared by a certified realtor who deals with transactions, such as communications and negotiations, between a landlord and prospective tenant. The realtor will assist the tenant in viewing the rental property and inform them about all of the landlord’s terms and conditions. Once an agreement has been reached, the realtor will provide a lease agreement in Minnesota to both parties to sign and receive a commission.
Commercial lease agreement
In addition, for the commercial lease agreement, details such as the lease duration, rent amount, security deposit, subleasing, exclusivity, and lease renewal must be included according to Chapter 336, Article 1, and Part 2: Minnesota Uniform Commercial Code laws in Minnesota. It is advisable to ask for professional advice in Minnesota before entering this contract.
Rent-to-own lease agreement
A rent-to-own lease agreement is a contract that gives the tenant a purchase option in Minnesota. That means a tenant renting out your rental property has the option of buying it from you. These details must be discussed and agreed upon before the lease agreement is signed. Also, it is crucial to screen the tenant to establish their financial ability to purchase the property. The purchase option is only viable within the lease period as a tenant.
Month-to-month lease agreement
A month-to-month lease agreement in Minnesota is a contract referred to as a tenancy at will. It has no end date, which means that if both parties uphold the contract, the lease agreement can continue for an unspecified amount of time. However, it can be terminated by either the landlord or the tenant, provided a 30-day notice. Therefore, it is essential to properly screen the tenant before renting out the space since this lease agreement can last long. While preparing this month-to-month lease agreement in Minnesota, the laws you need to observe are § 504B.135.
Room rental (roommate) agreement
A room rental or roommate lease agreement is a contract that specifies the living arrangement of roommates in a shared living apartment in Minnesota. All tenants sharing the apartment have to discuss and agree on the terms and conditions of their co-existence. They must all sign this lease agreement in Minnesota to be final and legal. For this lease agreement, the landlord is not involved.
Standard lease agreement
In Minnesota, a standard lease agreement is a legally binding contract that specifies the tenancy agreement between a landlord and the tenant. The tenant will first review the rental property, complete a rental application, negotiate terms and conditions with the landlord, and finally sign this lease agreement. Chapter 504B (Landlord and Tenant) must be observed when preparing this lease agreement, indicating that the first month’s rent and the security deposit should be requested before the tenant moves in.
In Minnesota, a sublease agreement is a contract between a sub-lessor and sub-lessee regarding a rental property where the sub-lessor is the original tenant. The landlord must be involved in this arrangement for security purposes. The original lease agreement between the landlord and the sub-lessor still stands even with this sublease agreement in place. The sub-lessor cannot extend any benefits or entitlements to the sub-lessee that surpasses the original lease. In addition, the sub-lessee will be required to handle rental costs, utilities, groceries, and any other finances related to the rental unit.
Minnesota Lease Agreement Disclosures
To avoid legal disputes and tenant conflicts, there are essential disclosures that, as a landlord, you must include in the lease agreement in Minnesota when preparing it.
The lease agreement disclosures include the following:
For all rental units, a lease agreement must include the landlord or manager’s information in Minnesota. The landlord’s full name and address are required in the contract to make it easier for tenants to send notices and communicate with the property owner.
Late fee disclosure
In Minnesota, the late fee disclosure is required in any lease agreement prepared for rental units that charge late fees when tenants delay paying rent. The details to include when writing this disclosure is the amount of fee, the rent due date, and the grace period allowed. In Minnesota, the late fee is usually 8% of the rent, and if the rent is paid within the mentioned grace period, then the late fee is not owed.
Inspection and condemnation
For any property in Minnesota with an inspection order citation issue regarding health and safety, the lease agreement must include the inspection and condemnation disclosure. The inspection orders must be attached to the rental agreement. This information must be made available to the tenant before the security deposit and rent have been paid. If the issued order is still pending and is not considered a health risk, the landlord can include it as a notice.
For any rental property with a foreclosure notice in Minnesota, the lease agreement must include the financial distress disclosure. As a landlord, you must also include the date of the foreclosure. Depending on the foreclosure date, you can only have periodic residential agreements with your tenants with a foreclosure notice, usually for less than two months. If the foreclosure issue has been resolved, you can have more extended or fixed-term rental agreements with your tenants.
Shared utility agreement
The shared utility agreement disclosure applies to rental units with multiple tenants and single meters. Landlords of such rental buildings are considered the bill payers and must inform the tenants of the utility bills they will be sharing.
Some of the details that should be provided under this disclosure include:
- The distribution of utility charges among the tenants
- The total utility costs from the shared utility meter
- The breakdown of the shared utility bill charges (in case a tenant requests these details for up to two years before, the landlord must provide this information)
Covenant of landlord/tenant
The covenant of the landlord/tenant not to allow unlawful activities is a necessary disclosure that must be included in the lease agreement for all rental units in Minnesota. The exact clause for this section of the contract should state that both parties have agreed to not indulge in any illegal or unlawful activities within the rental premises.
Some of these criminal activities include prostitution, robbery, domestic violence, stolen property or property obtained by robbery, and the use of controlled substances. The clause should also define the areas where such habits have been prohibited from happening.
This disclosure outlines all the legal duties and responsibilities that the landlord and the tenant will each uphold during the rental period. The aim is to prevent any illegal activities and unlawful use of the property.
The lead-based paint disclosure applies to all rental units built before 1978. Landlords will need to fill out and attach a lead-based paint disclosure form to their lease agreement to inform their tenants and highlight the risks posed by these paints. They are also required to provide Environmental Protection Agency (EPA) approved pamphlets containing information about lead-based paints’ hazardous nature.
It is important to specify if your rental unit allows marijuana use or not in your lease agreement in Minnesota. As a Minnesota landlord, you can restrict marijuana use completely, control where the marijuana users smoke, or even limit marijuana use to non-smoking techniques. This way, all tenants can co-exist peacefully with each other.
For the move-in checklist, you can either include this disclosure in your lease agreement or prepare a separate document that must be signed in Minnesota. This involves providing a list of property damages before the tenant moves in. This ensures that the tenant will be held liable for any other damages they might cause to the property.
Bed bug disclosure
If your rental unit has a history of bed bug infestation, you must disclose this information in the lease agreement. With this disclosure, you will need to provide guidelines for handling a bed bug infestation, including how to prevent a bed bug infestation and where to report any sign of it.
The asbestos disclosure is required in the lease agreement for a rental property built before 1981 in Minnesota. With this information, the tenant is aware of the asbestos, can take precautions against disturbing the asbestos fibers, and quickly inform you of any wall or ceiling deterioration. The tenant will also be prohibited from sanding, pounding, modifications, and repairs without your consent.
The lease agreement can include a mold disclosure to establish your rental property’s mold status in Minnesota. This protects you as the landlord against future liability from mold damages while guiding the tenant on how to stay away from the mold.
For security deposits in Minnesota, there is no maximum limit. However, as the landlord, you will be expected to return the security deposit to your tenant once the lease has ended, according to § 504B.178. Also, Minnesota state does not have a set due date for rent since that is an agreement made between a landlord and a tenant, with a possibility of a grace period.
For late rent fees, the maximum fee payable is 8% of the monthly rent according to § 504B.177. This information must be included in the lease agreement alongside a reasonable fee for Not-Sufficient Funds (NSF Check) for rent payment. In addition, based on the guidelines in § 504B.211, the landlord has a right to enter the rental property if they provide reasonable notice.
How to Write a Minnesota Lease Agreement?
Ensure that all the details mentioned below are included when writing a lease agreement in Minnesota. The aim is to ensure that your lease agreement is legal and viable according to Minnesota laws:
Names of the parties
The full and legal names of the landlord and the tenant(s) must be included in the lease agreement. However, if an agent or a property management company is available, you can include their legal business name instead of the landlord’s name.
The premises’ location, which is the physical address for the rental property, should be included in the contract. This will include details such as the city, zip code, and the lot or unit number.
The term information determines the types of lease, which can be fixed-term or flexible. Whatever the case, you need to specify the term information to establish the length of the rental agreement and even the lease’s end date.
You must inform the landlord about when the lease begins, the monthly rent, the due date, and where the rent should be paid for the rental amount.
The late fee for delaying paying rent must also be included in your lease agreement in Minnesota and should be reasonable. Ensure that you also specify the due date of the rent payment in this section.
Landlords in Minnesota should specify their security deposit, the amount to be paid before the tenant can occupy the rental unit. Apart from establishing that the tenant is serious about renting the space, the security deposit is also used for repairs for future damages.
The initial payment is the total amount of the first month’s rent and the security deposit that a tenant must pay to be allowed to move into the rental property.
The occupant’s section should include the full names of all tenants staying in the rental unit, and this will include the tenant signing the lease, the tenant not signing the lease, and even tenants who are minors. For Minnesota State, this information is vital for identifying who lives in the residential property. For commercial property, listing the occupants will help determine the rent price and establish the person allowed to use the leased space.
This explains which utilities or services a tenant does not pay when renting out the unit.
The parking information includes notifying the tenant whether they have a parking space or not besides the rental property. As the landlord, you must specify if there is a parking space and if it is reserved and designated for the tenant.
The landlord must inform the tenant about the installations and appliances they are allowed to have and those prohibited for the furnishings details. In addition, the lease agreement must be specific on the machines and appliances, such as dishwashers and washing machines.
The document must have a section where the names of the landlord and tenant, together with their mailing address and other communication details, are included. This way, both parties can easily communicate and send notices.
For the eviction details, the lease agreement in Minnesota must specify the eviction process for the tenant in case there is a breach of contract or they fail to make payments.
Your lease agreement should have an additional terms section where extra terms and conditions agreed upon by the landlord and tenant can be included if they are not present in the other sections.
Signature and date
The lease agreement in Minnesota must be signed and dated by both the landlord and the tenant.
Minnesota Lease Agreement
- A lease agreement in Minnesota is usually prepared according to the Federal and State laws to bind a landlord and their tenant in a legal contract. The landlord is paid, and the tenant gets a commercial or residential rental space in return.
- The lease agreement must include the required disclosures such as lead-based paint, mold, asbestos, bed bugs, etc.
- As a landlord or tenant, ensure that your rental situation aligns with the type of Minnesota lease agreement that you have prepared for signing.
- While preparing your lease agreement in Minnesota, you can use our samples to write a proper contract that will be viable and acceptable before the Minnesota courts.