A Minnesota sublease agreement is a legal document between the existing tenant of a property (or “sublessor”) and someone who wants to rent part or all of that property (the “subtenant”). The subtenant is responsible for following the terms and conditions of the sublease and the original lease.
However, the original tenant remains responsible for ensuring the landlord gets their rent even if the subtenant fails to pay their share, and any breaches of the original lease agreement also fall to the tenant. If the lease explicitly prohibits subletting, this final decision can’t usually be appealed or renegotiated.
Laws & Requirements
Sublease and Assignment Provision Laws: Minnesota Landlord and Tenant Rights Act, p. 30.
Landlord-Tenant Laws: Chapter 504B of the Minnesota Statutes.
Security Deposit Obligations: A security deposit in Minnesota must be returned within 21 days of the end of the sublease.
Notices: A sublessor must give a subtenant 14 days’ written notice to pay rent or leave for at-will agreements or immediately when there’s no written sublease. They also need to provide 30 days’ written notice of their intent not to renew the sublease as well as the original lease.
Permission to Sublet
Tenants in Minnesota can legally sublet if their lease does not prohibit it.
- Laws: Leases should be reviewed for specific provisions regarding subletting requirements or prohibitions.
- Explicit Written Consent: Recommended but not legally required by default.
- Landlord’s Right to Reject: Landlords can screen potential subtenants and deny them for valid reasons.
Tax Obligations
Lodgings Tax
- State sales tax of 6.875% is due on short-term rentals of less than 30 days.
- Tax must also be collected on rentals lasting 30 days or more, except when a written lease mandates prior written notice for termination (Minnesota Statutes § 297A.61).
Tax Rates by County
- Counties and cities often impose additional taxes and may mandate permits, licenses, or inspections.
- Taxes vary by location; for instance, in Minneapolis, they include the State Sales Tax (6.875%), Hennepin County Sales Tax (0.15%), Minneapolis Sales Tax (3%), Transit Improvement Sales Tax (0.25%), and Minneapolis Entertainment Tax (3%).
Filing Frequency
- You must file short-term rental tax returns with the Minnesota Department of Revenue based on assigned filing frequencies: monthly (due the 20th day of the following month), quarterly (due the 20th day of the following month), or annually (due by February 5th of the following year).
- Returns are required even if no short-term rental income was earned during the filing period (“zero dollar returns”). Late filing may lead to penalties, interest payments, and potential legal actions.
Making Payments
- Payments for short-term rental taxes can be made electronically through the Minnesota Department of Revenue’s online portal.
- Accepted forms of payment typically include electronic funds transfer and credit card transactions, though the latter may involve convenience fees.
Sample
Related Documents
Rental Application
Helps landlords gather all relevant information to make informed decisions about potential tenants.