Minnesota Court of Appeals Reins In City of Minneapolis

[NOTE:  this post originally appeared on The Vanilla Shell on January 25, 2011]

Ask any landlord within the City of Minneapolis what it’s like to do business there and you’re likely to get at least one story about a fight with the City over a property.  Having dealt with City officials on occasion, I can tell you that they are not the easiest to deal with when it comes to my landlord clients. 

The City of Minneapolis wants affordable housing for its citizens; that point is not disputed.   How it achieves this goal, however, is often questioned.  That’s because the City of Minneapolis isn’t all that keen on having an abundance of homes serving as rental properties. 

The City is not altogether unreasonable in its view.  One or two problem property owners having control over a large inventory of properties can pose problems (lack of maintenance, problem tenants, etc.).  However, the great majority of landlords I know who own properties in Minneapolis are doing their best to be law abiding, good landlords. 

Still, we often see governments legislate based upon a few select instances, and the City of Minneapolis is no different.  Last year, the City imposed a “rental conversion fee” which mandated an additional $1,000.00 penalty from a landlord seeking to convert a single family property to non-homestead.  The City Council President even went on a local real estate radio show and confirmed that the fee was in fact intended to discourage rentals within the City of Minneapolis. 

Simply put, landlords often encounter stiff opposition from the City and I’ve often heard complaints about “getting the runaround” when seeking relief from the City.  It seems like the only time when the City moves rapidly in relation to rental housing is when it is keen on demolishing a home.

That was exactly the situation in a case decided by the Minnesota Court of Appeals in December 2010.  In the case of Khan v. Minneapolis City Council, the Court determined that the City had acted arbitrarily in ordering the demolition of a building without a proper finding that it constituted a “nuisance” under the Minneapolis Code of Ordinances (“MCO”).

In Khan, the City initially made a finding that a property owned by Mahmood Khan was, in fact, a nuisance, and ordered its demolition.  Mr. Khan subsequently appealed the decision and an agreement was reached giving him a period of time to perform a set of repairs as specified within the agreement.  At the conclusion of the time period, Mr. Khan had completed, in his opinion, “90-95%” of the work.  Still, the City objected to the quality of the repairs and the items yet to be completed and lifted its stay of the previously entered demolition order. 

Mr. Khan, however, did not throw in the towel.  Instead, he appealed the decision to the Minnesota Court of Appeals (NOTE:  since the City Council’s decision is quasi-judicial in nature, an appeal can be made to the Court of Appeals directly instead of resorting to a District Court lawsuit).  The Court of Appeals found that the proper procedure following the alleged non-performance of the rehabilitation agreement was for the City to make a renewed finding that the property still constituted a nuisance based upon the test set forth in the MCO. 

The Khan decision isn’t earth shattering, but it does give small landlords hope that they have a means of redress against the City of Minneapolis’ frequent heavy-handedness in dealing with their properties.