Property Management
A Minnesota property manager is approached by a prospective tenant who offers to pay 6 months' rent in advance in lieu of a security deposit. The property manager should:
AAutomatically accept since prepaid rent is better than a security deposit
BAdvise the property owner and get their approval before agreeing to alternative deposit terms✓ Correct
CReject the proposal since advance rent is prohibited in Minnesota
DAccept only if the tenant has poor credit
Explanation
Accepting prepaid rent in lieu of a security deposit is an unusual arrangement that affects both the owner's risk management and financial planning. The property manager should present this to the property owner for approval. Minnesota law limits security deposits to two months' rent for unfurnished units, but prepaid rent is treated differently. Owner approval is essential before agreeing to non-standard lease terms.
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