As of March 2026, a Tier 3 rental license in Minneapolis triggers mandatory annual inspections and supplemental fees of $243 to $578. Following the March 11, 2026 veto of the 60-day eviction extension, owners remain under the 30-day pre-eviction notice requirement, but Tier 3 properties face increased scrutiny during the license renewal process.
The Cost of Tier 3 in 2026
The City of Minneapolis uses a “Condition-Based” fee schedule. If your property is in Tier 3, you are paying significantly more than Tier 1 or Tier 2 owners to maintain the exact same license.
| Building Type | Base Fee (2026) | Supplemental “Tier 3” Fee | Total Annual Est. |
| 1-3 Units (e.g. Duplex) | $121 | $243 | $364 + Per Unit Fees |
| 4+ Units (e.g. Apartment) | $231 | $578 | $809 + Per Unit Fees |
Three Critical Risks for Tier 3 Owners in 2026
1. Mandatory Pre-Lease Disclosures
Since 2025, Minneapolis law requires you to provide a Written Disclosure of Violations to every tenant before they sign a lease. You must explicitly state your Tier 3 status and list all open orders to correct. If you fail to do this, the tenant has the legal right to break their lease with just 30 days’ notice.
2. The March 2026 Algorithm Ban
Effective March 1, 2026, Minneapolis has banned the use of algorithmic rent-setting software (like RealPage) that uses non-public data. For Tier 3 owners already struggling with high overhead, this means you can no longer rely on automated tools to “optimize” your way out of high compliance costs. You need a manager who understands local market supply and demand without using prohibited software.
3. The “STOP Slumlords” Council Review
While the full STOP Slumlords Ordinance takes effect in 2027, the City Council has already increased its oversight of Tier 3 renewals. If your property has significant safety violations, your license renewal may be pulled from administrative approval and sent to a public City Council vote—where tenants are invited to testify against your management plan.
How to Move from Tier 3 to Tier 1
Remaining in Tier 3 is a financial anchor. To move up, you must:
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Maintain a “Points Score” of less than 8 over a two-year period.
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Resolve all 311 and Regulatory Services orders within the initial 30-day window.
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Pass a “Professional Management” audit if your license is under review.
Are you tired of the “Tier 3 Tax”? We specialize in taking distressed Minneapolis portfolios and bringing them back to Tier 1 status. Contact us Today.
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