Unpaid Judgements and Rental Licenses

My proposed "unpaid judgments" ordinance amendments hit an unexpected snag in committee this Council cycle. After the public hearing last week in Public Safety and Regulatory Services (PS & RS) Committee, where two people, both representing landlords a (one being the staff from the Minnesota Multi Housing Association), expressed same concerns, the proposal was referred to the Rental Property Owners Advisory Committee for review.


Here's a little history on this issue. An article in the Minnesota Daily (“Landlords Ignore Suits,” 3-20-07, http://www.mndaily.com/articles/2007/03/30/71344) brought to my attention the fact that at least one landlord with multiple holdings in my ward is dealing with legal judgments against him by simply not paying them. As a result of that article I heard form many constituents that this has been a problem for them and others, especially younger and lower income renters.

Based on this, I asked staff if there was anything we could do as a City to address this. A staff work group formed and we quickly learned that one of the conditions of licensure for other types of businesses in Minneapolis is to not have outstanding unpaid judgments against you. Staff graciously helped me draft an amendment to the housing code to hold landlords to the same standard we hold other businesses.

I disagree that the proposal "duplicates" the judicial system's processes. We have established standards for doing business in Minneapolis, and this is one such standard. The process of getting a lien put on an unresponsive landlord's property could be extremely burdensome to a tenant, and we should be able to expect better from property owners. The fact that the existing judicial system process works for some landlords does not mean it works for tenants.

I have heard from staff that this ordinance will have no impact on rental housing receivers, as it is not targeted to the property in question but to the owner.

I moved a substitute at PS&RS that narrowed the focus of the proposed ordinance so that it deals only with judgments resulting from business operations involving rental property. It also clarifies that the ordinance should not be enforced against property owners who are making payments but have not yet paid the full amount, or who are appealing. Staff is working with my office to craft language to resolve both of these concerns.


Here is the exact language of the ordinance (the red text represents the new proposed part):


"Amending Title 12, Chapter 244 of the Minneapolis Code of Ordinances relating to Housing: Rental Dwelling Licenses.

244.1910. Licensing standards. The following minimum standards and conditions shall be met in order to hold a rental dwelling license under this article. Failure to comply with any of these standards and conditions shall be adequate grounds for the denial, refusal to renew, revocation, or suspension of a rental dwelling license or provisional license.


(11) There shall be no delinquent property taxes or assessments on the rental dwelling. The licensee or applicant shall have satisfied all judgments duly entered or docketed against the licensee or applicant by any court of competent jurisdiction arising out of the operation of a rental property business. This subsection shall not be found to have been violated if the licensee or applicant demonstrates that the underlying case or action leading to the entry of judgment is being properly and timely appealed or when the judgment is being paid in compliance with a payment plan accepted by either a court possessing jurisdiction over the judgment or the judgment creditor."

Some suggest that we don't want the City to become a "collections agency" for our citizens. I would counter that we do not want to reward property owners who disregard their legal responsibilities with a rental license. Holding the bad landlords out there accountable will help all of us: tenants, neighbors, and good landlords as well.


It is apparent that if this modest effort to better professional rental property owners is to be successful, my colleagues will need to hear from people outside City Hall. As the matter was referred to a property owners advisory committee I couldn't help but notice (once again) the glaring absence an official City tenant's advisory committee to help us make these kinds of decisions.

Looks like it is time to move the creation of that group higher up in my work plan.


In the meantime, it would help a great deal for me and other council members, to hear from tenants, community and neighborhood groups, landlords, others who support this idea.