Certain cities require a license if you desire to rent all or part of your property. For those cities that require a license the property must continually meet the conditions of the license. If you rent your property and do not have a required license you could be subject to criminal prosecution and a civil lawsuit. Call me if you intend to or do rent your property and I can assist in determining that you are in compliance with local, state and federal regulations.
Recently, a property owner tested the conditions of a rental license and lost. In the unpublished case of Sabri v. City of Minneapolis, 2011 WL 1642517 (Minn. Ct. App. May 3, 2011), the Court of Appeals upheld the City of Minneapolis' revocation of a rental license. That case involved a house that was legally zoned as a duplex. The property owner lived on the main floor and in part of the basement and the rental license allows for the rental of a unit on the second floor. The basement and the attic are legally uninhabitable units.
Based on a tenant's complaint, the City inspected the house in 2008 and determined that there were six separate occupied units in the house. The City issued a notice that the house needed to be returned to a proper duplex. A subsequent investigation revealed that the property owner complied with the notice. In 2009 the City again inspected the house based on a tenant's compliant. The tenant was occupying an unlicensed and illegal unit in the basement. The City again issued a notice to bring the house into compliance with City Code.
The City then provided the property owner with notice that it was beginning license revocation proceedings. The property owner, represented by an attorney, appeared at a hearing before an administrative hearing officer ("AHO"). The AHO "concluded that there was substantial evidence that [the property owner] had committed two violations of the city's housing code and recommended the revocation of [the] rental license." The City mailed a letter to the property owner and his attorney, at the address provided to the City, providing notice of the AHO recommendation and that a hearing was to be held before a City Council committee. Neither the property owner nor his attorney appeared at this hearing. Subsequently, the City Council revoked the rental license.
The property owner appealed to the Court of Appeals claiming that the decision was arbitrary and capricious and lacked substantial evidence, and that his due process rights were violated.
A decision of a city council like this must be supported by substantial evidence. "Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion or more than a scintilla of evidence". This is a very low standard. Here, the AHO record contained evidence obtained from the City's investigations of the violations. The inferences drawn from AHO record evidence are to be construed in favor of City (even if the court would have reached a different result). The Court of Appeals, based on this standard, found that there was substantial evidence.
As for the due process claim, the Court of Appeals found that there was no due process violation for lack of notice when notice was mailed to the addresses provided by the property owner.
A couple of things are drawn from this case. First, do not rent beyond the limits of your license, e.g., if you have a license for one unit do not rent out more units. An new or revised license would be required. Second, do not maintain your property in such a condition that it violates the terms of the license. Third, that the hearing at the City level is probably the most important hearing as it is at this level the record for review is created.
Based on a tenant's complaint, the City inspected the house in 2008 and determined that there were six separate occupied units in the house. The City issued a notice that the house needed to be returned to a proper duplex. A subsequent investigation revealed that the property owner complied with the notice. In 2009 the City again inspected the house based on a tenant's compliant. The tenant was occupying an unlicensed and illegal unit in the basement. The City again issued a notice to bring the house into compliance with City Code.
The City then provided the property owner with notice that it was beginning license revocation proceedings. The property owner, represented by an attorney, appeared at a hearing before an administrative hearing officer ("AHO"). The AHO "concluded that there was substantial evidence that [the property owner] had committed two violations of the city's housing code and recommended the revocation of [the] rental license." The City mailed a letter to the property owner and his attorney, at the address provided to the City, providing notice of the AHO recommendation and that a hearing was to be held before a City Council committee. Neither the property owner nor his attorney appeared at this hearing. Subsequently, the City Council revoked the rental license.
The property owner appealed to the Court of Appeals claiming that the decision was arbitrary and capricious and lacked substantial evidence, and that his due process rights were violated.
A decision of a city council like this must be supported by substantial evidence. "Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion or more than a scintilla of evidence". This is a very low standard. Here, the AHO record contained evidence obtained from the City's investigations of the violations. The inferences drawn from AHO record evidence are to be construed in favor of City (even if the court would have reached a different result). The Court of Appeals, based on this standard, found that there was substantial evidence.
As for the due process claim, the Court of Appeals found that there was no due process violation for lack of notice when notice was mailed to the addresses provided by the property owner.
A couple of things are drawn from this case. First, do not rent beyond the limits of your license, e.g., if you have a license for one unit do not rent out more units. An new or revised license would be required. Second, do not maintain your property in such a condition that it violates the terms of the license. Third, that the hearing at the City level is probably the most important hearing as it is at this level the record for review is created.
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