Revoke License

Negligent Landlords

When a landlord does not take care of their properties, the City Council has the power to revoke  the landlord’s rental license(s).  A landlord of 15 rental properties in North Minneapolis has had two of his rental licenses revoked and may have the remainder jeopardized as well.

The article from the Star Tribune details the events leading up to revocation of the landlord’s rental license: http://www.startribune.com/local/minneapolis/125272999.html

Under Minneapolis city ordinance, landlords are automatically banned from the rental business for five years if at least two of their licenses are canceled or revoked.

A landlord or tenant should contact an attorney with questions regarding the effect the landlord’s loss of rental license will have on the lease. 

Tenant hotlines are available for questions on Landlord/Tenant Law: 

http://www.homelinemn.org/

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Landlord/Tenant Options in the Face of Destruction

The destruction of the May 22nd tornado damaged a number of apartment complexes in North Minneapolis. Various landlords have to decide whether they are going to repair the damage to their property.

Read about some of the decisions landlords are facing after the damage of the tornado:

http://www.startribune.com/local/minneapolis/122914033.html?page=all&prepage=1&c=y#continue

Tenants of these damaged properties also have questions and concerns. Under Minnesota law, if a building is either destroyed, or becomes unfit for human occupancy because of a natural disaster or the elements, the tenant is not required to pay rent to the landlord.   If the rental unit is habitable but needs repairs, the tenant may be eligible for a rent reduction during the time that the unit is being repaired.  The landlord is responsible for repairing the damaged rental property and maintaining other property included in the rental agreement.

Further landlord and tenant rights and responsibilities can be found on the Minnesota Attorney General’s website:

http://www.ag.state.mn.us/consumer/housing/lt/lt2.asp

Contract for Deed and Tenants…

Contract for Deed: The Pros and Cons.

 The contract for deed is increasing in popularity for people that cannot get bank loans to finance a house. While some people support the contract for deed process, others are concerned that buyers are uninformed and do not understand the risks involved.  A recent article in the Star Tribune discusses the effect of contracts for deed on properties in neighborhoods of north Minneapolis.

 

A contract for deed is an agreement between an owner of property and a buyer in which the owner finances the property for an agreed upon purchase price. At this point, the property owner retains the title to the property but the buyer takes possession and makes repayments on the loan in installments to the owner of the property.  The contract for deed helps individuals buy homes when banks refuse to lend.

 

However, there are concerns that with the need for affordable housing, contract for deed properties exploit vulnerable residents.  The regulations for contracts for deed are loose and property owners are not held under landlord law to repair the properties.

 

For a better understanding of contracts for deed, contact your attorney with questions.

 

To explore some of the concerns individuals have with contract for deed properties in north Minneapolis, follow the link below to the article. 

 

http://www.startribune.com/local/minneapolis/122780224.html?page=all&prepage=1&c=y#continue

New Laws…

Overhaul of MN Landlord-Tenant Law?

A few weeks ago, Minnesota Governor Tim Pawlenty signed into law what some people view as the predecessor (or stepping stone) to a full tenant’s “Bill of Rights.”  It contains some significant changes that impact landlord-tenant relations – yet, many people are calling for even more.  For now, this will have to suffice…

Check out the news story:

http://www.startribune.com/politics/blogs/93588644.html?elr=KArksUUUoDEy3LGDiO7aiU

Also, take a peek at this summary of some of the changes:

http://homelinemn.org/blog/act-now/tenants-bill-of-rights/

I just wanted to make you aware that changes have taken place – and changes may continue in the future.  Here are some of the “highlights” of this legislation:

  • Caps on late payment penalties
  • Landlord screening controls (regarding fees and criteria disclosure)
  • Added penalties for landlord misconduct

The new law also includes a few compromises that benefit landlords – including civil damages or penalties if applicants do not accurately disclose the appropriate information.

I will keep you posted regarding the practical implications we discover as the various provisions take effect over the next six months.

Mortgage Crisis: Landlord Problems = Tenants’ Problems?

More “ripples” from the mortgage crisis…

In my last post, I mentioned the impact of the foreclosure crisis on the rental market.  Well, here is yet another scenario seen in the “wake” of the crisis: tenants that pay the rent, but landlords that don’t pay the mortgage. Take a look at this article that chronicles such tenants’ struggles:

http://www.twincities.com/ci_15147999?IADID=Search-www.twincities.com-www.twincities.com&nclick_check=1

Among their battles with landlords, real estate agents and financial institutions, these tenants face legal battles to stay in their homes (at least, temporarily) when a landlord’s mortgage has been foreclosed (or, will be foreclosed – in the case of a landlord that simply abandons the property).  Unfortunately, there is no guarantee that new owners of the property will provide any assistance, accept rent payments or allow tenants to stay.  However, tenants do have legal rights during the foreclosure process.

The Protecting Tenants at Foreclosure Act of 2009 is a federal law that provides temporary protection for tenants with landlords in foreclosure.  It seeks to allow tenants to arrange for alternative housing in a timely fashion and prevent tenants from being forced out of their homes seemingly without warning.  In general, a tenant has the right to stay under the current lease (if it was entered into before receiving notice of the landlord’s foreclosure) until the time at which a new party owns the property.  This timeframe can vary depending on the length of the “redemption period.”  Regardless of when that time is, the tenant does not have to move out of the property until he or she receives a 90-day notice to vacate the premises and those 90 days have expired.  The only major exception to the 90-day rule is if a new owner (or, even a subsequent buyer) intends to make the property his or her primary residence. There are other exceptions and issues which should be discussed with your attorney, as always different facts lead to different answers and solutions.

Foreclosure and Rental…

Several clients saw the attached video clip and wanted to discuss the ramifications with their houses.

http://www.cbsnews.com/video/watch/?id=6470184n&tag=contentMain;contentAux

The foreclosure crisis, and I call it a crisis because of the fact that it is happening all around to everyone, has the potential to affect the rental market. As highlighted in the video homeowners who are choosing to walk away are not going to be able to buy a house any time soon unless they have tons of cash. These ex-homeowners are most likely going to rent their next abode. A consistent fear for most landlords is whether a tenant will be able to pay. Because most ex-homeowners were not paying their mortgage for the last several months (strategic default) they have accumulated a healthy reserve for rent. At the same time, a landlord can logically infer that a potential tenant who just lost their house may not be the most responsible tenant to rent to. If the ex-homeowner just walked away from a legally binding contract with the bank why not walk away from a lease just as quickly when something else comes up? A simple solution for many landlords is to get more money on the front end of a lease. Although a potential tenant may not want to provide several months of rent up front, this may be there best bet to assure the Landlord that they are serious tenants. Another approach would be for a potential tenant to explain the business decision behind walking away from their previous house and make the Landlord better understand the rationale. The potential tenant can explain to the Landlord that they are actually stuck for several years at their next rental unit as they cannot come up with enough cash to purchase their next home, and that it takes a while for their credit score to bump back up. Until that time (which could be several years) the Landlord can perhaps be more assured of a good long term tenant.

Can You Please Just Give Me a Quick Review?

The first thing I tell people (clients, friends, family, whoever is asking) is that there is no such thing as a standard lease. There certainly are key clauses and specific language which should be in every lease, but because a lease is a business mechanism, there are going to be key varying clauses.

From time to time, I will be told that a perspective or potential tenant received a lease which says “Standard Minnesota Residential Lease” and there isn’t really any need to review. I try to quickly point out that there should always be some room for discussion. Because of the economy Landlords are indeed being more flexible. Sometimes a simple change such as moving rent payments to coincide with work paycheck distribution schedules or providing an option to move out if a tenant decides to buy/build a house can be drafted into a lease.

The ultimate goal of every lease I draft is to not ever have to rely upon the lease. The process of drafting a lease or negotiating a lease is to go over all details so as to prevent problems from arising in the future. In a carefully negotiated lease both parties will be more likely to abide by their responsibilities and be less eager to sue. Although there is some cost to reviewing leases, the money, time and aggravation saved in the long term is worth every penny!