Buying a Rental Property in St. Paul: The Rent Cap, the Fire C of O, and What to Check Before You Offer

St. Paul is one of the few Midwest cities where the city's rental rules can change the numbers on a deal. The same duplex can be a good buy or a poor one depending on two things most listing sheets never mention: whether the rent cap applies to the building, and the state of its Fire Certificate of Occupancy. This is the checklist we'd want in hand before writing an offer.

1. Find out whether the 3% rent cap applies

St. Paul voters approved rent stabilization in 2021, and the city has amended it since. According to the city's Rent Stabilization page, the ordinance limits rent increases to no more than 3% in a 12-month period unless an exception applies. The most recent amendment was adopted by the City Council on May 7, 2025 and took effect June 13, 2025.

The question that decides your numbers is whether the building is exempt. The city says the 2025 amendment created an exemption for newly constructed rental properties. That gives you a practical rule:

• Older buildings, which covers most of St. Paul's duplexes, triplexes and single-family rentals: assume the cap applies until the city tells you otherwise.
• Newer buildings: they may be exempt. Ask the city which construction dates qualify, and get the answer for that address before you rely on it.

Don't underwrite "market rent" on day one. The most common mistake is pricing a St. Paul rental on what the unit could rent for. If the current tenants pay below market and the cap applies, you can't simply raise them to market. Pay for today's rents.

The exceptions, and what they're for

The city lists ways a landlord can go above 3%:

• Self-certification for increases between 3% and 8%, evaluated annually.
• After a just-cause vacancy, an increase of up to 8% plus inflation (CPI). The city's rules define which vacancies qualify.
• Staff determination and reasonable return on investment requests, for larger increases with justification, judged on factors set out in the ordinance.

Tenants and landlords have 45 days from the city's determination to appeal. Treat these as tools for a property that genuinely needs them, not as a plan to reach market rent. A deal that only works if an exception is granted is a speculative deal.

2. Check the Fire Certificate of Occupancy before you close

St. Paul requires that all residential buildings that are not owner-occupied have a Fire Certificate of Occupancy (the "Fire C of O"). Owner-occupied single-family homes and duplexes are exempt (city Fire C of O page). One- and two-unit rentals registered on or after January 1, 2007 receive a provisional certificate, which allows occupancy until the city inspects.

What that means for a buyer:

• Ask the seller for the current certificate and the most recent inspection report. Open orders or deficiencies are repairs you're buying.
• Converting an owner-occupied house or duplex into a rental? Expect to apply for a provisional certificate and pass an inspection. Budget time and money for it.
• Walk the property with the city's pre-inspection checklist (the Single Family & Duplex Pre-Inspection Checklist on the same page) before you finalize your rehab budget.
• File the change of ownership. The city lists a C of O Change of Ownership form. Call the city at 651-266-8989 to ask what's required and when.

If a seller can't tell you the certificate status, make that call before you sign anything.

3. Plan the tenant and deposit handover

Buying a rental doesn't end the tenants' leases. Under the Minnesota Attorney General's Landlords and Tenants handbook, when a landlord sells, the lease transfers to the buyer, who must follow it unless buyer and tenant both agree to change it. Price the building on the leases you're inheriting.

The deposits move with the building too. Under Minn. Stat. § 504B.178, subd. 5, within 60 days of the sale the seller must either transfer each deposit, with interest, to the new owner and tell the tenant the new owner's name and address, or return the deposit to the tenant.

Put this in the purchase agreement: a rent roll, a copy of every lease, each deposit amount, and who receives the deposits at closing.

4. Short-term rental plans need their own license

If you're thinking about furnished or nightly rentals, St. Paul requires a separate Short-Term Rental Host license before you advertise or host, renewed every year. For a non-owner-occupied short-term rental, the application needs a current Fire C of O or a provisional certificate application. Check the license and zoning requirements before you count on that income.

5. Run the numbers on the rules, not the listing

1. Rents: today's actual rent roll, increased by no more than 3% a year unless the building is confirmed exempt.
2. Repairs: your own inspection plus anything the Fire C of O inspection is likely to require.
3. Timing: how long until a provisional certificate is issued or inspection orders are cleared and the unit can be rented.
4. Exit: who buys this from you later, under the same rules.

If the deal still works on those numbers, it's a real deal. If it only works on market rents or a granted exception, walk away.

When buying a St. Paul rental is the wrong move

• You need fast rent growth to cash-flow. A capped building with below-market tenants won't get there quickly.
• You haven't budgeted for city inspections. Older housing plus a fire inspection can mean repairs you didn't plan for.
• You want hands-off ownership from out of state. St. Paul's licensing, inspection and rent rules reward an owner or manager who knows the city.

None of this makes St. Paul a bad place to invest. It means the rules are part of the deal, and they belong in the spreadsheet.

Where MireProperty fits

We buy, renovate and sell houses across St. Paul and the Twin Cities, so we deal with these rules on our own projects. If you're an investor or landlord looking for St. Paul rentals or fixer-uppers, call us at 612-416-8555 and tell us what you're looking for.

On the other side of the table? Read Selling a Minnesota Rental With Tenants Still Living There. You can also see the cities we work in on Areas We Serve, or read our FAQ.

Frequently asked questions

This page is general information, current as of October 2026, and not legal, tax or financial advice. Confirm rent stabilization status, Fire Certificate of Occupancy requirements and licensing with the City of St. Paul, and talk to a Minnesota real estate attorney, CPA and lender before buying.