Compliance, Risks, and Solutions.
As of January 1, 2025, Minnesota’s residential property managers are subject to new applicant screening requirements brought by the state’s statute 504B.241. This law redefines how information must be collected, verified, and used, raising the bar for compliance and placing new demands on property managers and their screening providers. The statute introduces significant changes that require greater diligence during the screening process. Key components include:
- Complete and Accurate Reporting: Screening reports must now include full names, dates of birth, and specific case outcomes when court records are used. This ensures that reports are comprehensive and accurate.
- Timely Data Verification: Those who are screening residential rental applications must verify the updated status of court files using the Minnesota Court Records Online (MCRO) within 24 hours before issuing a report.
- Fair Application Review: Applicants cannot be denied based on preliminary or incomplete information, such as pending eviction actions, non-public or expunged records, or cases that have not resulted in a writ of recovery and order to vacate.
Failure to comply with these updated requirements poses significant risks to property managers and their operations. If procedural errors or outdated information cause applications to be denied, property managers and owners will be legally exposed. But even when a screening system ensures that the new requirements are met, if the process to do so is not managed efficiently the result may be delayed approval decisions, applicant frustration, and resulting vacancy loss.
Unfortunately, heavily automated screening service widgets, including those that serve as add-on components within a rental community’s property management software system, often lack the flexibility and rigor to meet the new law’s demands. Due to the limited human oversight inherent in these types of systems, they are not equipped to interpret nuanced court outcomes. In addition, meeting the 24-hour verification requirement may be beyond the capabilities of static or batch-processing systems. And finally, one-size-fits-all solutions cannot adapt to the unique compliance needs of individual properties or regions, including those under the jurisdiction of this redetermined law in Minnesota.
For these reasons, property managers must determine whether their current screening provider can adequately address the law’s requirements and if not, they should make a change. The right partner can help its customers meet the statute’s requirements efficiently while also maintaining high standards of accuracy and timeliness. But time is of the essence, because the new law is already in place.
According to Kirk Peterson, Chief Operating Officer at Eden Prairie, Minnesota-based Rental Research Services, “Addressing the challenges created by the updated law requires more than most systems can provide. Rental Research Services understands the unique needs of the multi-family industry on a market-by-market basis, uses real people to vet information whenever necessary, and ensures our reporting is accurate, nuanced, and compliant with the law.” Peterson added, “Our company does more than deliver reports— we proactively communicate with our customers to make them aware of important changes before they happen. We also act as an advocate for the interests of multi-family owners and managers, engaging with and educating lawmakers who many not understand the needs of our unique industry or how their actions may adversely affect it.”
While the updated statute introduces challenges to Minnesota property managers, it also offers an opportunity to demonstrate their commitment to fairness, compliance, and community well-being. Adopting customized, compliant screening practices not only mitigates risks but also builds trust with residents and applicants. By addressing these changes proactively and partnering with a trusted screening provider, property managers can navigate Minnesota’s evolving legal landscape with confidence. This approach not only protects property managers and owners, but also positions them as leaders in professional and fair resident screening practices.