The maximum occupancy for a dwelling unit located in in these zoning districts [R1, R1A, R2, R2B, R3] is one (1) family plus up to two (2) unrelated persons living together as a permanent household, provided the family plus unrelated persons shall not exceed a total of five (5) persons.

Ok.  Seems straight forward enough.  So what does this mean?

• Family is defined as:  An individual or two (2) or more related by blood, marriage or adoption, including foster children and domestic staff employed on a full-time basis.
• 6 guys living in a 6 bedroom house do NOT qualify under this ordinance.
• 12 family members living in a 6 bedroom house DO qualify.
• 3 family members and 3 couch sleeping friends, do NOT qualify.

Rental Licensing: Ordinance creating a furnace and boiler safety check and energy audit requirement for certain rental properties and repealing sections 244.680 and 244.685; and adding a requirement for a lead clearance inspection for certain rental properties and amending requirements related to lead safe work practices.

This new regulation can only add to more inspections as once the inspectors are inside your property, they are within their jurisdiction to call out other issues that need to be brought up to code also.  This will continue to push landlords that are barely making their mortgage payments to simply throw in the town and let their properties go into foreclosure.  Which will add to the blight on the city.

What is the scope of the energy audit mentioned?  Could the city require new windows and more insulation in attic and if you don’t comply they simply condemn the house as unfit?  Lastly, I suspect if this ordinance is passed we will next see that the City needs to add inspector headcount to satisfy this new requirement (adding to the bulging tax burden).  Where does it end?

The Minneapolis City Council will consider testimony from the public regarding proposed changes to the city’s rental license ordinance.
Date/Time 2/14/11 1:30 PM
Location Council Chambers, Room 317 City Hall

Lender-owned foreclosure inventory available for sale in the Twin Cities has fallen by 60 percent in the last year, falling from an estimated 4,886 at the end of last September to 1,960 this year. Short sales are a different story—basically holding steady over the last twelve months (Figure 1). Lender-owned Minnesota foreclosures now account for only 7.9 percent of the total inventory, while short sales represent 17.4 percent of total inventory.

The simple reason for this growing chasm is that foreclosures are selling roughly three times as frequently as short sales (Figure 2). Short sales are complicated transactions and many consumers have reported considerable delays and uncertainties associated with making an offer on a short sale home. These complications are likely the main cause of the relatively quiet sales activity.

Foreclosures are properties in which the financial institution has repossessed the home from the owner due to nonpayment of mortgage obligations. Short sales are unique arrangements where the financial institution and in default homeowner work together in an attempt to sell the home before it is foreclosed upon.

It’s encouraging to see the number of vacant foreclosures drop as they’re absorbed by new homeowners. But it’s discouraging to see that short sales remain such a substantial drag on the market’s forward momentum, especially when we consider that a portion of these short sales will eventually become lender-owned foreclosures.

1. Go to:  http://www.ci.minneapolis.mn.us.
2. Scroll down to the right hand side and click on property information.
3. Choose property look-up service.
4. Enter the address you are interested in.
5. As a test, put in 3227 Girard Ave N (you can put in a partial address like:  3227 Gir).
6. Scroll down to the bottom of the screen and look for “active parcel flags” (in the case of 3227 Girard-you will see that the property is condemned requiring code compliance and also has a VBR on it.)
7. If you click on Truth in Housing, this will show you if one has been done (by law one must have been completed PRIOR to property being put on the market for sale).
8. If the property is condemned, the Truth in Housing will become invalid and you will see a comment that says:  “condemned requires code compliance”.
9. If you do not see the link to Active Parcel Flag, this means the property is not condemned and does not a a Vacant Building Registration (or VBR).

Lastly, as part of our inspection period, we have started having our title company (for a nominal fee) run an assessment search to see what could potentially extra costs incured by the buyer at closing.  Lots of checks and rechecks to try and smooth out the process of buying foreclosed homes in Minneapolis.

The center was started several years ago as Minneapolis Mayor, R.T. Rybak encouraged the university to help solve the complex problems in North Minneapolis.  The goal was to create partnership aimed at building a stronger and healthier neighborhood that would tie together community and university expertise and resources and leverage these with city and county services and resources.

Once open, the UROC building will provide space for outreach and research programs centering around early childhood education, health disparities in relationship to income, 4-H, family development, and youth leadership to name a few.  Multiple private and federal grants will help establish programs that will benefit the residents of North Minneapolis.

You can read the entire interview here.

The community crime prevention/SAFE unit and the inspections division will be responsible for enforcement and administration of this new ordinance.  If a there is a police call (and probable cause) to a rental property in Minneapolis for any of the following violations (a conviction or arrest is not necessary):

1. Gambling
2. Prostitution
3. Sale or possession of controlled substances
4. Unlawful sale of alcoholic beverages
5. Noisy assembly
6. Unlawful possession, transportation, sale or use of a weapon
7. Disturbance of the peace

After the first offense for any of the above violations, the city will send the landlord a violation letter.  Within 10 days, the landlord will be required to submit a written management plan to the community crime prevention/SAFE unit.  Failure to submit a plan can result in the revocation, suspension, or refusal of renewal of the Minneapolis rental license.  These departments will work with the landlord and approve the plan.

If there is another violation at the same residence within 18 months of the initial violation, the landlord must again submit a “satisfactory” written management plan to the SAFE team within 10 days.  The management plan must detail all actions taken in the last 12 months by the landlord to abate the original problem and to prevent further violations.  Failing to submit a plan can result in the rental license being in jeopardy.  Additionally, the landlord or his designee must attend a property owner’s workshop prepared by the SAFE team.

A third violation within 18 months after the 2nd violation will put the license in jeopardy.

If the landlord has a pending eviction action against the tenant or his/her guest involved in the violation or has issued a writ to vacate within 30 days, the landlord may submit the eviction documents to the SAFE team within 10 days of the reciept of the violation notice.  If the eviction is being pursued “diligently”, there may be no adverse license action.  Further, any adverse license action to revoke, deny, suspend or not renew may be postponed or discontinued if it appears the landlord has taken appropriate action to prevent further violations.

This new ordinance could have far reaching effects depending upon its use.

• • The ABCs of property management
  • Working with the Minneapolis Police Department
  • Working with Housing Inspections
  • Tenant behavior issues
  • The risk of lead poisoning
  • Hennepin County Housing Court / mediation
  • Networking opportunities

DATE: Thursday, October 23, 2008
WHEN: 5 p.m. to 9 p.m.
(Registration at 4:30 p.m.)
PLACE: St. Mary’s Greek Orthodox Church
3450 Irving Ave. S.
Minneapolis, MN 55408
Cost: $20.00 — checks payable to City of Minneapolis (Includes cost of workshop, materials, DVD on Hennepin County Housing Court, and box meal.)

Pre-registration is required. RSVP by Thursday, October 16, 2008. (registration limited to 100 participants). REGISTRATION AFTER OCT. 16 WILL BE $30.

Return the registration form (http://www.ci.minneapolis.mn.us/police/outreach/docs/RPOW2.pdf)  $20.00 check payable to the City of Minneapolis by Thursday, October 16, 2008 to:

RPOW
Community Crime Prevention/SAFE
4119 Dupont Ave. N.
Minneapolis, MN 55412
Questions? E-mail ccpsafe@ci.minneapolis.mn.us or call the message line at 612-673-2812.

In April 2008, the City of Minneapolis “took charge” of 141 North Minneapolis properties previously owned by TJ Waconia.  The interesting twist is these properties are no longer owned by TJ Waconia, but by the banks that foreclosed on them.  Almost all of those properties are now on the market for sale via the MLS.

Recently, I was trying to write a purchase agreement on one of these properties.  I spoke to the listing agent to see if the property was still available.  They explained that they receently received an email detailing the following:

• A buyer would submit a purchase agreement as normal on one of these properties.
• Once it was accepted by the bank, the buyer’s agent would need to contact the Greater Metropolitan Housing Corporation, a non-profit.
• The non-profit will then have a new truth in housing inspection performed.
• The buyer will then be required to sign an assumption of all required repairs (which is typical with foreclosure properties).
• The buyer will also be required to submit a repair plan for the property including cost estimate, time tables, and contractor names.
• Once received, the non-profit will submit all this information to the attorney overseeing the lawsuit against TJ Waconia.  He will approve the sale.  How will approve it or what other information he may require is still uncertain.
• Only then can the closing be scheduled as the title company will need this approval in place to proceed.

Quote by listing agent for time requirement from acceptance to closing=90 days!

How does the City of Minneapolis believe this is going to help North Minneapolis?  What buyers are going to wait 90 days to close on one of these 141 properties where there are almost 600 other ones to buy?

• Minneapolis Rental Licensing Searching for Unlicensed Rentals
• New Minneapolis Rental Conversion Fee

I do understand the need for some regulation, even if I don’t agree with the above items. The newest tale in the Minneapolis Licensing saga came up at the end of last week. Our rehab contractor was at the City of Minneapolis checking on which customers would be required to pay the Rental Conversion Fee on the North Minneapolis houses that they just purchased.

When the city person checked the computer for a very nice 3 bedroom, 1.5 story house at 34xx Russell Ave N that a customer had recently purchased, she told our contractor that this property had lost its rental license. At first, this made no sense as I always understood that the property held the license, but just the owner/manager could lose the license on a house. I assumed (I guess now incorrectly), that if the house was sold, the new owner could apply and receive a Minneapolis rental license.

I was wrong. This house had its license stripped and even going through foreclosure, having a new owner, and paying the rental conversion fee, would not allow this property to be a rental. I have come to understand that the status of a rental license is like the “grandfather” status that we refer to in regards to code compliance. Definition of grandfather status: As building codes have changed over the years, houses previously built to the then current codes are said to be grandfather’ed in and they are not required to be updated to the current code standards. This is why you still see knob and tube wiring in houses built 100 years ago, even though that code changed 50 years ago.

Luckily this buyer was still in their inspection period and we quickly cancelled the contract. If we had not found this issue, this investor could have been left with a house thats only use was for an owner occupant. The only option would have been to flip the property, which could have been a difficult situation to resell even a rehab property in North Minneapolis.

The city said that restoring the license is very similar to obtaining a variance on any other city regulation. There is a large packet of information you need to complete. Then you will need to speak in front of the licensing board. I have been told that in these situations, you are almost always fighting an uphill battle as it is much easier for them to deny your request.

Despite buying and rehabbing almost 100 houses in Minneapolis, this is the first time that anyone in our group had seen this issue. I recommend that you confirm license availability prior to closing on your next Minneapolis Investment Property.