Minnesota AG reaches settlement with HavenBrook Homes, other landlords
(FOX 9) - Minnesota Attorney General Keith Ellison announced Friday that his office has reached a settlement with multiple rental companies in a lawsuit that alleges the companies under-maintained hundreds of rental homes.
These rental companies, including HavenBrook Homes, Progress Residential and Pretium Partners, allegedly did not well maintain over 600 rental homes. In February 2022, Ellison sued HavenBrook Homes for "misrepresenting its property-repair practices" and keeping the properties they owned "uninhabitable" for tenants. The lawsuit alleged these properties had repeatedly lost heat, water leaks, haphazard fixes, mold, severe pest infestations and lack of hot water.
As part of the settlement, HavenBrook Homes will have to put $2.2 million into a restitution fund which will be held by the Attorney General’s Office for tenants, both current and former.
Some tenants of HavenBrook Homes were told they had to leave their homes during the COVID-19 pandemic, which violated an emergency executive order made by Gov. Tim Walz that limited rental companies when terminating leases. The lawsuit alleges that a tenant had elevated levels of lead in their blood, and HavenBrook Homes was not timely in repairs for their rental properties.
HavenBrook and Progress Residential will be required to forgive rental debt owed by all their former Minnesota tenants up to just under $2 million.
Progress Residential was added to the lawsuit in August 2022 after they acquired HavenBrook Homes.
READ MORE: North side monopoly: How investment funds scoop up affordable houses
Through the settlement, defendants Pretium Partners and Progress Residential plan to transfer their properties to affordable housing entities by this spring. The agreement also ensures that tenants who would like to keep their rental homes can.
According to Ellison, the defendants are not required to hand over their properties to new owners, but for the properties they don’t hand over, the defendants are required to comply with terms that make sure their tenants have safe housing. The property owners are required to follow both state and federal lead-paint hazard laws, respond timely to maintenance requests, provide tenants with copies of city inspection reports and abate rent if city-ordered repairs are not done by the set date.
Tenants with these rental companies are eligible for $1,000 per household in relocation assistance if they choose to move. They will also receive their full security deposit back with interest if they decide to move.
If the defendants don't sell their properties, current tenants who owe at least two months' rent can end their lease early and get past-due rent forgiveness.
Tenants who rent with Progress Residential will receive these offers directly from the rental company. The Attorney General’s Office will be in contact with current and former renters of the other rental companies to participate in the restitution plan.
"No Minnesotan should have to live in a home that loses heat, lacks hot water, and is infested with pests and mold due to a landlord’s negligence. Minnesota laws require landlords to provide safe and habitable homes for their tenants. When HavenBrook repeatedly failed to follow the law, my office sued them and has now secured a judgement that does right by HavenBrook’s tenants. Landlords cannot use their legal and economic power over renters to take advantage of them. Regardless of who manages a rental home, my office will continue to enforce the law against landlords who jeopardize the health and safety of their tenants to increase profits. This positive resolution is a milestone for ensuring that Minnesota tenants are treated with the safety, dignity, and respect that we all deserve," Ellison said in a statement on the settlement.