Minnesota Attorney General Keith Ellison last week announced that his office has obtained a court order halting Steven Meldahl — the landlord of 25 properties in North Minneapolis — from retaliating against his tenants when they contact city housing inspectors. The order was a result of his office’s lawsuit against Meldahl alleging he preys on low-income tenants in a systematic and widespread “eviction for profit” scheme.
As part of this scheme, Meldahl forces his low-income tenants to pay large security deposits and high monthly rent to live in dilapidated houses, which Meldahl not only refuses to adequately repair but requires his tenants to repair, contrary to law. Meldahl also requires tenants to sign leases that illegally forbid them from seeking health and safety inspections and repairs and threatens retaliation if they do. If they do, Meldahl evicts them — then refuses to return their security deposits, which he has sometimes required in amounts as high as $2,000 or more.
Meldahl has bragged that he has evicted 99 percent of his tenants. He has called himself “the most experienced inner-city landlord probably in the history of the city.”
Even though Meldahl has illegally suppressed inspections, City of Minneapolis housing inspectors have cited him for more than 1,300 housing-code violations at his rental properties since 2009.
“It’s almost impossible to afford your life and live with dignity and respect if you’re cheated out of safe, healthy, stable housing at a fair price. Tenants are consumers who deserve the same protections from fraud and abuse as all consumers — and State law gives the Attorney General broad authority to protect Minnesota consumers,” Attorney General Ellison said. “That’s why my office sued to stop Steven Meldahl’s ‘eviction for profit’ scheme that violates both State law and common decency. I’m glad the Court has seen fit to protect tenants from his illegal action.
“I’ll keeping using the powers of State law and my office to protect tenants the same as we protect all Minnesota consumers from fraud and abuse,” Attorney General Ellison concluded.
Attorney General Ellison’s office filed a civil lawsuit last week against Meldahl, who sometimes does business as S.J.M. Properties, Inc. The State alleges that Meldahl:
1) misrepresents tenants’ legal rights to habitable housing and unlawfully shifts the burden of making housing repairs, even normal wear and tear, from himself, as the law requires, onto his tenants;
2) deceptively tells his tenants that they cannot have their homes inspected by local authorities without his permission; and
3) charges his tenants late fees that exceed those allowed under law.
These allegations represent violations of the State’s Consumer Fraud Act, Deceptive Trade Practices Act, and the Habitability, as well as of State law regulating late fees.
The Attorney General’s office seeks permanent injunctive relief, restitution for harmed tenants, civil penalties, and attorneys’ fees.
The State’s lawsuit was filed in Hennepin County District Court. The Court issued a Temporary Restraining Order that requires Meldahl to stop retaliating against his tenants that contact the City of Minneapolis’s Housing Inspectors. The Court also froze 10 of Meldahl’s bank accounts.
In his order, Judge Patrick Robben wrote, “There is good cause to believe that the State will likely prevail on the merits of its claims that Meldahl has violated, is violating, and is about to violate” the Consumer Fraud Act and Deceptive Trade Practices Act. Judge Robben also wrote, “Under Minnesota law, tenants have an unwaivable right to report habitability concerns to the local authorities, without retaliation, as well as to live in habitable housing that complies with health and safety laws.”
Mark Iris, staff attorney of Mid-Minnesota Legal Aid, also announced that his organization, representing all current tenants of Mr. Meldahl, has filed a class-action lawsuit against Meldahl.
“Meldahl has been profiting off the backs of low-income tenants in North Minneapolis. These are people that already have few options and even fewer resources to assert their rights to safe and healthy housing,” said Mr. Iris. “Our lawsuit is merely an attempt to restore Meldahl's tenants with the fundamental housing rights that all other tenants in Minnesota are afforded: raising children in a home without exposure to mold or lead, being able to call on maintenance to have working appliances, paying a consistent and predictable monthly rent. We are optimistic that both lawsuits will have a direct impact on improving the housing conditions of Meldahl's tenants and indirectly benefit tenants across the state.”
Among the orders the City of Minneapolis has issued to Meldahl are: replace heating equipment so homes can be heated sufficiently; exterminate insects and vermin, which have included rats, mice, cockroaches, and squirrels; replace exterior doors that did not function; repair broken windows; repair or replace non-functioning appliances; remove interior water-damaged surfaces; install missing smoke detectors; remove an illegal bedroom; repair or replace electrical components; remove exit-window obstructions; repair or replace foundations; repair or replace plumbing; replace cabinets and counters; repair or replace exterior walls; repair or replace exterior stairs; install clothes dryer ducts; and repair or replace roofs.
In 2006, the U.S. Department of Justice sued Meldahl for failing to comply with the Residential Lead-Based Paint Hazard Reduction Act. Meldahl was ordered by the court to pay civil penalties and abate and mitigate the lead paint in 31 of his rental homes in Minneapolis.
Attorney General Ellison encourages anyone who has been victimized by Steven Meldahl and S.J.M. Properties, Inc. to file complaints with the Minnesota Attorney General’s Office by calling (651) 296-3353 (Metro area) or (800) 657-3787 (Greater Minnesota), emailing email@example.com, or submitting an online complaint form on the Attorney General’s website at www.ag.state.mn.us/Office/Complaint.asp.
Meldahl currently owns the following 25 properties in North Minneapolis:
• 3725 6th St. N.
• 3313 Lyndale Ave. N.
• 2942 Dupont Ave. N.
• 2819 Fremont Ave. N.
• 2322 Irving Ave. N.
• 2411 Irving Ave. N.
• 2610 Irving Ave. N.
• 2622 Irving Ave. N.
• 2306 James Ave. N.
• 2623 Knox Ave. N.
• 528 Morgan Ave. N.
• 1523 Morgan Ave. N.
• 3507 Morgan Ave. N.
• 810 Newton Ave. N.
• 1410 Newton Ave. N.
• 2910 Newton Ave. N.
• 2623 Oliver Ave. N.
• 2805 Oliver Ave. N.
• 2931 Oliver Ave. N.
• 3335 Oliver Ave. N.
• 2900 Queen Ave. N.
• 3115 Thomas Ave. N.
• 317 23rd Ave. N.
• 1118 24th Ave. N.
• 2219 29th Ave. N. # 1