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You do have recourse here. If he won't return your deposit immediately, and you are forced to sue, you would want to name both parties. But, in any case you have a cause of action against the property manager alone since you are in privity of contract with him. And, due to his failure, you are entitled not only to your deposit plus interest, but also that same amount again as punitive damages. I have provided you the applicable MN statute below. You can file this case in small claims court without an attorney. Filing the suit will give you the collection options and leverage you need to collect the debt owed you. That's because once the suit is filed and a judgment awarded, you become a judgment creditor, and if he doesn’t then pay the judgment, you can have the sheriff serve a summons on him for a debtor examination. That forces him to meet you in court again and answer questions under oath about his assets. After that information is obtained, you have the power to garnish wages, attach bank accounts, have the sheriff seize other personal property, and/or place liens on any non-homestead property he owns to satisfy the judgment. In my experience, simply filing the suit is typically all you need to do to resolve this outside of court because most of the time, once served with a summons one is being sued, your debtor will want to settle out of court to avoid the judgment and the punitive damages.
"504B.178 INTEREST ON SECURITY DEPOSITS; WITHHOLDING SECURITY DEPOSITS; DAMAGES; LIMIT ON WITHHOLDING LAST MONTH'S RENT.
Any deposit of money, the function of which is to secure the performance of a residential rental agreement or any part of such an agreement, other than a deposit which is exclusively an advance payment of rent, shall be governed by the provisions of this section.
Any deposit of money shall not be considered received in a fiduciary capacity within the meaning of section 82.55, subdivision 26, but shall be held by the landlord for the tenant who is party to the agreement and shall bear simple noncompounded interest at the rate of three percent per annum until August 1, 2003, and one percent per annum thereafter, computed from the first day of the next month following the full payment of the deposit to the last day of the month in which the landlord, in good faith, complies with the requirements of subdivision 3 or to the date upon which judgment is entered in any civil action involving the landlord's liability for the deposit, whichever date is earlier. Any interest amount less than $1 shall be excluded from the provisions of this section.
Subd. 3.Return of security deposit.
(a) Every landlord shall:
(1) within three weeks after termination of the tenancy; or
(2) within five days of the date when the tenant leaves the building or dwelling due to the legal condemnation of the building or dwelling in which the tenant lives for reasons not due to willful, malicious, or irresponsible conduct of the tenant,
and after receipt of the tenant's mailing address or delivery instructions, return the deposit to the tenant, with interest thereon as provided in subdivision 2, or furnish to the tenant a written statement showing the specific reason for the withholding of the deposit or any portion thereof.
(b) It shall be sufficient compliance with the time requirement of this subdivision if the deposit or written statement required by this subdivision is placed in the United States mail as first class mail, postage prepaid, in an envelope with a proper return address, correctly addressed according to the mailing address or delivery instructions furnished by the tenant, within the time required by this subdivision. The landlord may withhold from the deposit only amounts reasonably necessary:
(1) to remedy tenant defaults in the payment of rent or of other funds due to the landlord pursuant to an agreement; or
(2) to restore the premises to their condition at the commencement of the tenancy, ordinary wear and tear excepted.
(c) In any action concerning the deposit, the burden of proving, by a fair preponderance of the evidence, the reason for withholding all or any portion of the deposit shall be on the landlord.
Any landlord who fails to:
(1) provide a written statement within three weeks of termination of the tenancy;
(2) provide a written statement within five days of the date when the tenant leaves the building or dwelling due to the legal condemnation of the building or dwelling in which the tenant lives for reasons not due to willful, malicious, or irresponsible conduct of the tenant; or
(3) transfer or return a deposit as required by subdivision 5,
after receipt of the tenant's mailing address or delivery instructions, as required in subdivision 3, is liable to the tenant for damages in an amount equal to the portion of the deposit withheld by the landlord and interest thereon as provided in subdivision 2, as a penalty, in addition to the portion of the deposit wrongfully withheld by the landlord and interest thereon."
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