Struggle with unlicensed north Minneapolis rental house highlights challenges for renters with limited options

Nicholas Zobel, a recovering drug addict, had a hard time finding a place to live after graduating from his sober house at the end of 2022. His treatment program offered him a list of second-chance landlords. He called every number. One landlord called him back, offering a small single-family house in north Minneapolis.

The house, located at 5049 Vincent Av. N. was in bad shape, with a recent city inspection documenting windows that don't lock, missing electrical fixtures with exposed wires, no faceplates on the outlets and water-damaged walls. Lacking other options, Zobel signed a lease.

But months after moving in, he discovered an even bigger problem: the rental was unlicensed, meaning it can't legally be leased for money. Zobel, feeling scammed, decided to take the property owner to housing court to get his rent back.

"All I know is I've been taken advantage of and I'm trying to get over this as soon as possible," he said. "In my opinion, my unfortunate situation is a result of a bigger community problem. So many other people have been in this situation before me. How many actually have taken the time and investment to challenge these landlords?"

It turns out a complicated ownership dispute is tangling up the licensing process for 5049 Vincent Ave. N., which hasn't had a rental license for nearly a year.

Tenant advocates say Zobel's story isn't unheard of among renters who don't have a wealth of options. Recent ordinances prohibiting discrimination against tenants based on long-past criminal records or whether they would be using public assistance to pay the rent, aim to help solve the problem, but remain difficult to enforce.

"We hear stories, unfortunately, fairly often about folks who are struggling to find safe — let alone affordable — housing when they have less-than-pristine background checks," said Rachael Sterling, a housing attorney with the renters' advocacy group HOME Line. "There are landlords out there who have substandard housing, who just refuse to make repairs because they know that their tenants are stuck."

A Problem House

Neighbors said they saw virtually no upkeep on the house at 5049 Vincent Av. N. and a high turnover of tenants with limited options.

Nikki McComb, who has lived next door since 2017, said she's seen a stream of tenants coming out of treatment and shelters, some who kept to themselves, others who got into loud fights and appeared to be dealing drugs. The landlord started blocking her calls after all the complaints she had made about the dilapidation of the property she described as "unlivable."

"I've had to report the property multiple times. I've also had to report the tenants. I have not had to report Nick [Zobel] because he's been a different type of tenant," said McComb.

City Council Member LaTrisha Vetaw who represents the area, said she was aware of those complaints and would consult city inspectors about the regulatory tools at the city's disposal.

"It was my understanding that [the landlord] may have some more properties all over north, like some transitional housing, because I think he rents to ... people with backgrounds who traditionally can't find somewhere to live," she said.

Ownership confusion

According to Hennepin County property records, Daniel Yesnes of Comking Real Estate Ventures is the owner of 5049 Vincent Av. N.

But Yesnes disputes that, and denies being responsible for the house's maintenance because he sold it last January in a contract-for-deed transaction to a man named Opeyemi Christopher Olawuyi. Yesnes had a rental license for the property that expired in March 2023, but the city won't renew the license under Olawuyi's name until the county records him as the new owner, Yesnes said.

He blamed a "glitch" for why the county hasn't updated its records.

A contract for deed is a type of transaction in which the buyer borrows from the seller instead of a bank, often because the buyer doesn't qualify for a regular mortgage.

"The buyer is able to occupy the home after the closing of the sale, but the seller still retains legal title to the property," the state's Department of Commerce website says. "Actual ownership passes to the buyer only after the final payment is made."

The Hennepin County Recorder's office says the same: A contract-for-deed sale only changes the ownership after the contract has been fulfilled.

Yesnes maintained that is "completely wrong" and insisted that Olawuyi is the current owner of 5049 Vincent Av. N., not him.

"I can sell you real property on contract for deed, you are now the owner," he said. "I've had a real estate license since 1977, so I have a general clue how things work."

Olawuyi owns More Properties, which specializes in buying blighted houses. After Zobel filed an action in housing court to get his rent back, Olawuyi and Yesnes sent Zobel an eviction notice — another issue pending in the housing court case.

"If Nick is claiming that the house is in bad condition, I give him options," Olawuyi said. "I said, 'You know what? Two months of rent, I give you 30 days to leave this house. I'm willing to negotiate with you because I don't want you to be in a place that is not comfortable.'"

Zobel refused, still wanting all the rent back that he had paid while the house went unlicensed—$1,429 a month for nearly a year — plus damages for the breathing problems he said he started to experience only after it rained and mold flared up a bedroom wall. Olawuyi said even if he wanted to, he didn't have "that kind of money."

Code violations

Olawuyi vowed to fix the code violations that the city inspector found, but emphatically denied there was any mold to repair because the word "mold" doesn't appear in the repair order.

Zobel paid out of pocket for testing to verify that the black specks carpeting the walls and windows are mold.

But Pat Hilden, the city's interim director of inspections, said rental housing inspectors need only to identify mold by odor and sight. "And then we tell people, as we did in this case, to remove any of the moisture or the building material that has got the appearance of mold, remove all that, fix wherever the moisture is coming from and then repair it properly. And that was in the order that we submitted."

The mold ordinance, cited in the inspection report, was updated last year to clarify that it is not enough for landlords to simply paint over the mold, which inevitably reappears.

Hilden said when a landlord illegally collects rent through an unlicensed property, the tenant can go to housing court, as Zobel did, and try to get reimbursed. A second option is to make use of the city's relocation assistance, which offers up to three months of rent back, charged to the owner.

Zobel and Olawuyi are scheduled for trial in housing court Feb. 9.