Minnesota Rental License

7 Replies

My husband and I are looking to purchase our next rental property in Duluth, Minnesota.  While researching we found properties that have "rental licenses".  What are these?  Does this mean that homes without a current rental license can't be tenant occupied?  What are the laws and implications of this?  In Southern California we don't have anything like this.  Any information or resources to find out more information is appreciated.  Thank you!  

I'm only familiar with St Paul rentals, Lindsey, but maybe it will help. In St Paul, rentals are inspected by the Fire Department for safety and any flagrant code violations. If the unit passes, the owner receives a "rental license" which is displayed in a front window or door. Personally, I like the program. I keep my units in good shape so its not really a burden. It gives the tenants further piece of mind. For Duluth, you may want to make a quick call to the city desk to find out more.

We have a few SFH rental properties in Duluth, MN. Joe is right, it means an inspection by the County (St. Louis for Duluth) fire inspector. If any compliance issues you'll be given a list of repairs necessary before a re inspection. In addition to the inspection there is a $2,500 license fee.

We include a statement in our offers "contingent on passing rental inspection."

As Joe said, the inspection should be welcomed as it's another set of eyes judginf your property. A bigger factor is the cost in Duluth, which needs to be factored in to your buy and hold numbers.

I actually own three houses in Duluth and know Duluth very well.   A few years ago Duluth tried to create a 300 foot rule meaning that one rental license could not be within 300 feet of another rental license unless that was already the situation then that house would be grandfathered in. They gave a date that all houses need to have rental license in by in order to be grandfathered in so many  homeowners who didn't want to rent their house out still went out and got a rental license. It's my understanding now if you buy a house that doesn't have a rental license you are able to " bypass this rule "by paying the fee of $2500 or maybe $3000.   In my opinion the city is somewhat difficult to work with. They seem like they come up with a new law against the landlords every few years. I may be interested in selling my three college rentals to you. Feel free to PM me if you want to discuss it further. 

Thank you @Joe Schaak, @Seth M. and @Brian Doyle for your input!!  I appreciate it.  The contingency in the offer about passing a rental inspection is a great idea.  Brian I'll PM you to get more information if you don't mind? Thank you again! 

Hi Lindsey, did you ever acquire any investment property in Duluth? If you have any other questions about the market and regulations, feel free to PM me.

Hi Alex,

My husband and I have not purchased any properties in Duluth, MN. We had submitted about 4 offers, went into negotiations but in the end could not come up with a mutual buying/selling price.

As determined as we are, we won't just buy to buy. It has to make sense for us financially but it's been a lot of fun throughout this process!

Thanks for checking up and wishing you continued success in RE!

a new trend is taking place on the licensure of rentals and this has come from so many suits being filed against the owners of these properties which have turned liability onto the county or city now-

the number one hot topic gaining leverage onto rentals is the NFPA- national fire protection agency-

the cities and counties are really looking into the code increases and the tightening up of accountability that is placed on the owner- for years the building division in most areas were there to do inspections and make sure dwellings were up to code requirements, the new turn is this is being handed over to insurance carriers and they are really sharpening there pencils and going above the code minimums- owners will have to pay for a regulator agent ie.. insurance underwriter to perform the inspections before licensing the dwelling as a rental- getting rid of the home inspector businesses 

enjoy

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