Landlord group sues over Minnesota eviction restrictions

Updated 4:40 p.m. Tuesday

A Minnesota landlord group has asked a federal court to invalidate a remaining Gov. Tim Walz executive order barring most evictions, although the Legislature could change the rules before a judge steps in.

The lawsuit filed late Monday by the Minnesota Multi Housing Association and some of its members says the moratorium has deprived the rights of property owners to manage their units.

"If it is safe to go to the State Fair, it is safe for property owners to exercise their contractual and statutory rights to remove tenants who have violated the material terms of their leases or rental agreements, particularly when those violations have negatively impacted other residents’ use and enjoyment of their rental properties,” the lawsuit reads in part.

It comes as legislative negotiators have reached a deal to wind down the moratorium. 

The deal could be voted on later this week and creates a phased eviction moratorium off-ramp, with some protections lasting into June 2022. Walz has said he’d rescind the moratorium once a legislative solution is reached.

Cecil Smith, chief executive officer of the Minnesota Multi Housing Association, said the agreement falls short of what his members need.

“Our industry has been through an enormous ordeal for the last 15 months and this would be another year. We’re just looking for some certainty. And we’re asking the governor to end the moratorium,” Smith said in an interview Tuesday. “It’s his executive order and he can end it.”

Some groups supporting tenants welcomed the legislative deal. 

“I think this agreement is a huge step in the right direction in terms of giving people time to apply for emergency rental assistance,” said  Margaret Kaplan of the Housing Justice Center.

Attorney General Keith Ellison issued a statement saying the state would fight the lawsuit.

"We can all be glad that new covid cases and hospitalizations are falling, and that the numbers of people vaccinated are rising — but we aren’t out of the woods yet,” Ellison said. “The governor has reasonably modified the orders over time to create some common-sense exceptions. We look forward to defending the Executive Order in court and believe we will prevail."

Lawmakers said Monday they would press ahead with the off-ramp proposal during the special session.

Sen. Rich Draheim, R-Madison Lake, said removals could start this summer for material breaches of rental leases.

“Breaking your lease other than the payment portion of it,” Draheim said. “So if you’re selling drugs, if you’re destroying the property, have a pet where it says no pets, smoking when it says no smoking.”

People behind in their rent will be protected from eviction for longer, but if they don’t qualify or won’t apply for rental assistance programs that shield comes down beginning in September.

Under the agreement, anyone who is eligible for the federal help who has a pending application can’t be displaced until June 2022 solely for being behind in their rent. 

Rep. Mike Howard, DFL-Richfield, said it was a hard-fought compromise.

“Our bipartisan legislative agreement eliminates the governor’s executive order on the eviction moratorium and replaces it with a statutory off-ramp, rendering this lawsuit moot,” Howard said. “We look forward to voting soon on legislation that gives protections and peace of mind to both renters and landlords.”

All sides gave up some priorities in the legislative negotiations, Howard said. Democrats let go of a clause making it easier to keep eviction attempts off a renter’s record. Republicans went along with a requirement that landlords give 15-day notices before filing for an eviction.

The moratorium was a way to foster housing stability during the pandemic. Hundreds of millions of dollars in assistance is available for past due rent and utilities based on income status.

Landlords have complained that the state-administered RentHelpMN.org program has been slow to launch, contains multiple hurdles for property owners and can’t be used to gain access to back rent for tenants who moved out voluntarily.

“We just hear of checks trickling out, but it’s sloth-like and we don’t have clarity about where an application is, what stage it is at,” Smith said. “It’s just still not working.”