Property Management
In Minnesota, a property manager who receives a security deposit must hold it in a:
ANon-interest-bearing account
BSeparate interest-bearing account if held for more than one year, with interest paid to the tenant✓ Correct
CJoint account with the owner
DTrust account only at a federally insured bank
Explanation
Minnesota requires that security deposits held for more than one year earn interest at a rate set by statute, with the interest to be paid to the tenant at the termination of the tenancy. The deposit must be kept in a separate account from the landlord's own funds.
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Key Terms to Know
Joint Tenancy
Co-ownership where two or more people hold equal, undivided interests with the right of survivorship — when one owner dies, their share passes to the surviving owners.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
State-Specific Concepts
Trust Account Rules
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