If you collect an application fee, by MN state law you must:

1. Provide your rental criteria in writing.

What income, credit, criminal, and/or rental history requirements must a renter meet to live at your property? Provide this to all potential applicants in writing. Some landlords put this on the back of an application, or hand it to prospective renters on a separate document. 

2. Provide the contact information of the screening company in writing.

If you use a tenant screening company, you must provide their name, adddress, and telephone number to the applicant in writing.

3. Use, cash, or deposit one application fee at a time.

You may only use, cash, or deposit one application fee at a time, and accept or reject the applicant based on whether or not they meet your rental criteria that was provided in writing.

4. Notify rejected applicants of the criteria they did not meet.

Did you deny an applicant? You must notify them within 14 days the criteria they failed to meet.

5. Refund the application fee if the applicant is denied for any reason not listed in the written screening criteria.

Did you reject the applicant for a reason that was not listed in the criteria you provided in writing? Then you must refund the application fee.

6. Only charge a fee equal to what it costs you to obtain the screening report.

If the screening company charges you $50 for the report, you can charge a $50 application fee. If they charge you $25, you can charge $25. In other words, you may only cover your costs.

7. Provide a written receipt for the application fee.

The receipt can be part of the application form.

8. Have an available unit within a reasonable amount of time. 

You must have an available unit now, or within a reasonable amount of time in the future, to collect an application fee. 

A Note on Denials: You can't deny an application based on the following pending cases:

A pending eviction.

Any court file that is not public, has been expunged, or has been destroyed.

Any eviction action that has not resulted in a writ of recovery of premises and order to vacate.

If a landlord violates these application fee procedures, they are liable to the applicant the amount of the screening fee, plus a civil penalty up to $100, civil court filing costs, and reasonable attorney fees incurred to enforce this remedy.

If an applicant provides materially false information on the application or omits material information requested, they are liable to the landlord for damages, plus a civil penalty up to $500, civil court filing costs, and reasonable attorney fees. 

See the MN Landlord Tenant Law that covers application fee procedures here.