With thousands of Minnesota tenants behind on rent, a new state law sets the rules for assistance

Four months in arrears on her monthly rent of $980, Delia Spencer-Hartwig got some welcome news last week.

The 31-year-old south Minneapolis woman was approved for rental assistance to pay back her landlord, courtesy of a statewide program dispensing federal funds to help renters and landlords affected by the COVID-19 pandemic.

The funds have yet to come through, but she can't be evicted from her one-bedroom apartment under a bill passed this month by the Legislature that says tenants cannot be evicted while their application for rental assistance is pending.

The rule, which remains in force through next May, is just one provision in the new law that spells out rules for lease terminations and eviction court cases over the next 10 ½ months.

Across Minnesota, tenants, landlords, attorneys and judges are getting briefed on details of the new law — some of them in seminars run by Larry McDonough, senior Minnesota fellow for the Lawyers' Committee for Civil Rights Under Law, a nonprofit organization of public interest lawyers focused on housing and civil rights issues.

"My hope is that enough tenants and landlords will get the rental assistance so that landlords will be made whole," says McDonough. "They won't have to evict tenants, the tenants won't be made homeless and the court system won't be overwhelmed."

Spencer-Hartwig, who works as a personal care attendant, had seen her income slashed because the assisted-living facility where she is employed didn't allow outsiders to enter the building during the pandemic. That made for hard times for Spencer-Hartwig, her 13-year-old daughter and 7-year-old son.

Rental assistance is "really important to me," she said. "If I can't pay the rent, I'd probably go homeless."

As a result of two congressional appropriations, Minnesota has received $672 million largely for rental assistance, of which $518 million is being administered by the Minnesota Housing Finance Agency, according to Commissioner Jennifer Ho.

"I think our initial estimation is, we could help upward of 50,000 renters," Ho said. "It's a win-win for the renter and owner when they can pay their back-due rent and pay all their bills."

The current rental assistance program culminates a process that began with Gov. Tim Walz's eviction moratorium in March 2020 and has been modified since.

In the legislative session that just ended, the Republican-led Senate passed a bill to end the moratorium quickly while the Democratic-led House voted to extend it for a longer period.

A conference committee hammered out a compromise, said Sen. Rich Draheim, R-Madison Lake, chairman of the Senate Housing Committee. It included a series of provisions that limited landlords' ability to evict tenants, with phased expiration dates.

Rep. Alice Hausman, DFL-St. Paul, said lawmakers were concerned about the large number of tenants in Minnesota who are behind on rent. The U.S. Census Bureau estimated June 21 that there were 72,000 tenants in the state who were not current on rent payments.

"We spent most of our time on the timeline" for phasing out the provisions that limit evictions, said Hausman, who chairs the Housing Committee in the House. The courts were concerned they wouldn't have sufficient resources to do the work if landlords across the state were allowed to abruptly file eviction notices, she said.

Minnesota renters can apply for the assistance at renthelpmn.org. A special option, called the Zero Balance Project, is available in Hennepin, Ramsey and Dakota counties. It allows landlords to start and lead the application on behalf of their renters.

Provisions in the law

Until June 30, Walz's moratorium didn't allow evictions for nonpayment of rent. Now a landlord may cancel a lease for nonpayment if the tenant was eligible for rental assistance from the state but refused to apply for it or failed to prove they applied. The landlord could terminate the lease for that reason and file an eviction court case if the tenant didn't move.

Since the moratorium, the pandemic has significantly affected the lives of many renters.

Bradley Raiche, 53, of Plymouth, builds and maintains data management services, but his work declined during the pandemic and he's seven months behind on $1,600 monthly rent. He applied for rental assistance in April, but didn't know if he's eligible and his landlord was threatening to file for eviction. Going to court, he told the landlord, is "an unnecessary, costly inconvenience."

Shana Williams, 51, who lives on St. Paul's East Side, had her hours cut at Cub Foods and also missed work because of a family emergency. She filed for rental assistance in May and was told authorities were still gathering information for her application. Meanwhile, her landlord has sued, saying she owes $3,273.60 in rent. "I am frustrated," she said.

Postal clerk Char Knick, 60, of Roseville, is two months behind on her $1,145 monthly rent. She contracted COVID-19 in February and has been unable to work since, so she applied for rental assistance Thursday. "I've borrowed money from friends and family and I am running up debt on my credit cards," she said.

Under the compromise approved by the Legislature:

• Landlords must give 15 days' notice before filing an eviction case against a tenant who failed to pay rent. State law previously did not require any pre-filing notice. The notice must include the amount of rent due and the availability of rental assistance. This mandate expires Oct. 12.

• Landlords have the option to evict if there are certain types of illegal activity on the property, serious endangerment of others or significant property damage. Previously, a tenant also could be evicted if landlords wanted to use the unit themselves; now a landlord can't force a tenant to leave for that reason. This rule also expires Oct. 12.

• Beginning Wednesday, a landlord can file for eviction on a material breach of the lease. McDonough said an example of a material breach is a tenant being so noisy that other tenants want to leave. An example of a nonmaterial breach is a landlord thinking their tenant is not cleaning enough, but nothing has been damaged.

• Starting August 13, a landlord may terminate a lease if the tenant owes rent and is ineligible for rental assistance. On Sept. 12, a landlord can file for eviction if the tenant owes rent and is ineligible for assistance.

Ho noted that most of those applying for rental assistance make less than $25,000 a year. But a person can earn up to $80,000, depending on the size of their family, and still be eligible.

McDonough said some landlords and tenants are dissatisfied with how long it's taking the Housing Finance Agency to send out the money, a problem he chalked up to growing pains.

"The agency is handling over four times as much federal funds as in a normal year," he said, adding that restrictions on how the money can be used also slow down the process.

Ho asked for patience as funds are doled out.

"We have more money than applications, so don't worry about [the agency] running out of money," Ho said. "We just need time to work through the high volume and the back and forth.