Investor · St Paul, MN · Member since 2020 · 12 posts · 3 votes
Hello! Looking for some input from landlords with rentals in the Twin Cities area. We are closing on a duplex in St Paul on May 26, 2021. The 1st floor tenant has a lease that goes through July 31, 2021. There is a tenant on the 2nd floor that participates in a social services program which covers a large portion of their rent. I've been in touch with the organizers of that program and they've asked if the 1st floor unit could be available for another client in that program when that lease terminates. We would like to pursue that option. Given the current eviction moratoriums in place, is it still within our rights to simply inform that tenant in writing that we will NOT be renewing the lease?
Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
5y
@Rich you can renew you just can't be the party that terminates the lease. You can raise the rent but you are capped at 20% increase from the March 2020 rent. That's a big increase. Sometimes an increase will make a tenant not want to renew, but if the increase pisses them off, it can backfire as they can stop paying and you can't evict. I definitely recommend explaining any increase you decide to propose.
Real Estate Agent · Saint Paul, MN · Member since 2015 · 224 posts · 214 votes
5y
@Rich Leone Unfortunately the eviction moratorium is still in place in Minnesota so you cannot non-renew at this time. Sounds like you've got a great opportunity for placing a tenant when the moratorium is over though!
Investor · St Paul, MN · Member since 2020 · 12 posts · 3 votes
5y
@Tim Swierczek, @Alyssa Strom - Thank you both for the insight. I will connect with the tenant post-closing and ask if his intention is to renew. If it is, can I assume I am able to renew on a month-to-month lease under the current conditions? His current lease I am inheriting was a 2 year lease.
Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
5y
@Rich you can renew you just can't be the party that terminates the lease. You can raise the rent but you are capped at 20% increase from the March 2020 rent. That's a big increase. Sometimes an increase will make a tenant not want to renew, but if the increase pisses them off, it can backfire as they can stop paying and you can't evict. I definitely recommend explaining any increase you decide to propose.
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
5y
@Rich Leone I can not tell you how many people keep getting this wrong.......
The current actions in place you can not send notice to evict, or to terminate lease, THAT IS IT! It does NOT say you must agree to renew.
So what can you do to flourish in the grey-zone of moratorium, you CAN convey to tenant that your current lease contract ends on ____ date and that you personally would prefer to adhere to that, that you would PREFER to not make a lease renewal, that you would PREFER to not extend the lease with them, and than ASK "so what plans did you have Mr/Mrs Tenant?".
You can talk to tenants, share how you "FEEL" all you want, including saying you'd like to not do ___, or your preferences, that is called Free Speech and is constitutionally protected. The moratorium is exclusive to given ORDERS to tenants, so simply don't order them, share your desires and feelings and see what they say. You would be shocked how many times tenants will say "oh, well, ok, we don't want to stay here then if you don't want to continue lease with us so ok, we will move out" which is 100% legal, it's called voluntary.
Same goes for lease renewals and rent increases, YES you can present that to tenants and it's 100% legal if it is voluntary. How often will tenants do that you say, about 97% of time.
There is so many landlords acting out of fearful ignorance at this time it just blows my mind. The standards put out there specify only what a person can't, meaning you CAN do everything and anything else, but it seems like so many are waiting for government to issue out a mandate of what you can do, before they do anything. If you waiting for government to issue a doctrine of what you can think, do, say, save yourself and sell everything and buy stock.
Investor · St Paul, MN · Member since 2020 · 12 posts · 3 votes
5y
@James Hamling Quick follow up on outcome: Offered renewal month-to-month, 4% rent increase. The tenant had been having rent discounted earlier in the year due to work issues related to Covid. Previous landlord was also allowing biweekly rent payments, which we do not allow. I shared that we did have another party interested in the unit and our preference was to rent to them (The 2nd unit in the duplex is occupied by a tenant under the HAP program. The social worker for that program has asked if the 1st floor unit would be available for another client). The tenant ended up providing notice for non-renewal by email so a good outcome from my perspective. Thanks for the advice!
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
5y
@Rich Leone Glad everything worked out for a positive resolution.
As a note for everyone, in MN with moratorium you do NOT have to sign or agree to make a lease month-2-month terms during moratorium, the moratorium itself automatically gives all expired lease's month-2month BUT with the power that when it ends so does the lease. If you write a month-2-month lease, now your putting yourself a bit over a barrel as to how to end that if you ever want to.
If adjusting rents up to market, I highly suggest just writing a normalized new term lease, no reason not to, even if the term is 90 days it's important to have clearly defined expectations in both performance AND duration. If duration is unknown, make it 1/2yr and put in a clause for early termination allowance, again clearly defining upfront expectations.
Investor · St Paul, MN · Member since 2020 · 12 posts · 3 votes
5y
@James Hamling Interesting twist with my tenant that has given notice to non-renew. He had originally indicated he would be paying June rent over two payments during the month (apparently an arrangement he made with the previous landlord). As of today, no payments received for June. Last week he asked for an eviction notice (per the assistance program he works with) so "I can get paid in full for June-July". I followed up with a few questions about the program, etc and no response yet. I'm pressing him for more information, but it doesn't make sense that a gov't assistance program would require an eviction notice given that the moratorium is still in place.
@James Hamling Interesting twist with my tenant that has given notice to non-renew. He had originally indicated he would be paying June rent over two payments during the month (apparently an arrangement he made with the previous landlord). As of today, no payments received for June. Last week he asked for an eviction notice (per the assistance program he works with) so "I can get paid in full for June-July". I followed up with a few questions about the program, etc and no response yet. I'm pressing him for more information, but it doesn't make sense that a gov't assistance program would require an eviction notice given that the moratorium is still in place.
I suggest asking him where he found that information as it sounds like he has some dated info, most likely from a dated online posting.
This was a thing, for a great many years actually, all pre-moratorium of course. There is no less than half a dozen programs I know of that would jump into action if/when a person has an eviction notice. Again, all dated.
At this time to give a person a notice of eviction, unless it is one of the very specifically authorized instances, it is not only not allowed but a CRIMINAL offense, not just civil it is CRIMINAL, MN Gov. Walz criminalized it. AND, it's also up to $10K per offense on top of jail time so I say good instinct NOT to give such.