When landlords do not respond in a timely fashion to habitability problems, many states allow tenants to deduct the reasonable costs of necessary repairs from their rent. Minnesota merely offers a choice between various inefficient options and going to court.
A tenant decided to take a tour of the James J. Hill House in St. Paul. During the tour, a guide informed the tenant that the house is 124 years old and has had no significant alterations. The tenant retorted, “The Hills must have the same landlord I have.”
America is increasingly becoming a nation of renters.1 Renters occupy more than one-third of all U.S. households—equaling approximately 43 million households as of early 2013.2 In Minnesota, the number of renter-occupied households has increased substantially, to an estimated 603,133 by 2012.3 If you rent, it is inevitable that, at some point, you will want to request that your landlord make a repair. Unlike a homeowner, a renter has limited options regarding repairs.
In most states, including in three of Minnesota’s four neighboring states,4 tenants are empowered with the ability to choose the self-help “repair and deduct” remedy. As the name implies, this option allows a renter to pay for a repair and then deduct the cost of that repair from the tenant’s rent the following month. “Repair and deduct” is exceptionally well-suited for relatively inexpensive repairs related to essential services when a renter encounters an unresponsive landlord.
Rental Repairs in Minnesota
In Minnesota, a tenant is limited to far less efficient options, including: (1) waiting until the landlord gets around to making a repair; (2) paying for a repair out-of-pocket without the expectation of reimbursement; (3) withholding rent until a repair is made, which frequently results in the landlord filing an eviction action against the tenant; (4) moving and remaining liable for all rent owed during the lease term unless the landlord agrees to early termination, the lease has an early move-out clause, or the tenant is found to be constructively evicted;5 (5) requesting a city inspection; or (6) filing a petition for relief in court.6 Even though commencing a lawsuit should be a last resort for resolving any dispute, litigation has become the unnecessary starting point for scores of Minnesota tenants dealing with irresponsible landlords.
Despite tenants being entitled to rental properties kept in reasonable repair,7 Minnesota is one of a minority of states that has failed to provide tenants with any semblance of the “repair and deduct” remedy. Unless a city inspector is available to hastily visit a rental property and prompt the landlord to make immediate repairs—a dubious proposition for many landlords8—or the facts support the existence of a constructive eviction, Minnesota tenants are stuck between a rock and a hard place, or more appropriately, between a multitude of inefficient options and going to court. The latter option assumes that tenants are aware of their right to seek judicial relief and possess the wherewithal to follow through.
Even in situations where a tenant is aware of the potential for judicial action and has the necessary gumption, I have never counseled a tenant who understands the differences between Minnesota’s three rental repair actions: (1) a Rent Escrow Action (“REA”); (2) a Tenant Remedies Action (“TRA”); and (3) an Emergency Tenant Remedies Action (“ETRA”), each of which is detailed below. Moreover, each of these actions requires a filing fee, a court filing, and attendance at a hearing. Each step represents an obstacle for tenants—especially those living in underprivileged communities—and acts to unfairly shift the onus for ensuring rental habitability to tenants. “Given the relatively small sums typically involved … and the high cost of legal representation, any habitability remedy that can be asserted only by bringing judicial action against the landlord is doomed to nonuse.”9
Nonuse may be hyperbole, but limited use is borne out by the data. For example, in 2012, HOME Line, a statewide tenant advocacy organization, received 1,988 calls from Minnesota tenants regarding repair issues whereas only 249 REAs and ETRAs were filed.10 Hence, a myriad of Minnesota tenants failed to file a judicial action to address habitability issues after reporting their problems and learning about the impractical options available to them. This discrepancy supports the contention that an unfair burden-shift is occurring. A sidebar on the following page illustrates the disparity.
Repair & Deduct Nationally
Thirty-three states have adopted the “repair and deduct” remedy.11 In order to protect landlords, the use of “repair and deduct” is often narrowed by several limitations. The most common limitations include requirements that: (1) the landlord be notified of the problem in writing and be afforded a specified amount of time to correct the problem; (2) the repair be necessary and the cost be reasonable; (3) the cost of making the repair is capped; and (4) the tenant is permitted to invoke the only remedy a limited number of times.12 These limitations provide significant protection for landlords, because landlords are provided notice and a chance to correct the issue(s). If a landlord fails to address the problem(s), then the tenant is limited to making only necessary repairs at a reasonable cost.
Modernizing Minnesota’s Approach
For the past several years, HOME Line and the Legal Services Advocacy Project have led the fight to modernize Minnesota’s inefficient and litigious rental repair structure. The most recent legislative proposal was limited to providing tenants the right to make emergency repairs (the “2010 Proposal”).
The 2010 Proposal required tenants to: (1) provide landlords with 48 hours’ notice; (2) enlist the services of properly licensed individual(s); and (3) submit copies of any repair-related charges with the next rent payment. The 2010 Proposal also held a tenant liable to the landlord for any damages caused by a professional engaged by the tenant to perform repairs. The 2010 Proposal was, unfortunately, one of the earliest proposals negotiated out of a compromised bill. Since 2010, no elected official has stepped forward to sponsor a “repair and deduct” bill.
Despite the multitude of protections afforded to landlords in a majority of “repair and deduct” laws, such as in the 2010 Proposal, Minnesota landlords remain staunchly opposed to tenant self-help remedies and have been exceedingly effective at arguing against the adoption of a “repair and deduct” statute. In my judgment, the landlords’ opposition is void of any reasonable basis. A “repair and deduct” statute would merely ensure that Minnesota’s landlords abide by their statutory duty to keep rental properties in reasonable repair and their contractual duty to maintain habitability. It would impose no new obligations on landlords, rather enforce existing ones.
- Rent Escrow Action (REA): This action allows a tenant to pay rent into an escrow account when a landlord fails to make necessary repairs. After providing the landlord with 14 days’ notice, the tenant is permitted to pay any rent owed into court, rather than to the landlord. The purpose of an REA is to petition the court for an order requiring the landlord to make specified repairs, abate rent, and/or pay a fine. Minn. Stat. §504B.385 (2012).
- Tenant Remedies Action (TRA): This action shares many similarities with an REA, but there are a few key distinctions. Unlike an REA, a TRA does not require any rent be paid into court at the time of filing and can be filed by a “housing-related neighborhood organization,” such as a state, county, or local department responsible for enforcing housing-related codes on behalf of one or more tenants. Minn. Stat. §504B.395 (2012).
- Emergency Tenant Remedies Action (ETRA): This is an expedited action that is only available for tenants suffering a loss of essential services or facilities, such as loss of running water, heat, electricity, or sanitary facilities. Another important difference between an ETRA and a TRA is the notice requirement. An ETRA requires only 24 hours’ notice be provided to the landlord before filing. Minn. Stat. §504B.381 (2012).
A perfect example of why the “repair and deduct” remedy should be enacted in Minnesota is Mark, a renter in St. Paul, who has maintained a positive relationship with his landlord. A few months ago, due to no fault of Mark’s, the glass inlay in Mark’s front door shattered. The damaged inlay provided anyone with access to the building the opportunity to reach inside, unlock the door, and enter Mark’s apartment. Replacing the inlay was expected to cost a few hundred dollars. Mark immediately contacted his landlord about the situation, but his landlord failed to make the repair in a timely fashion. Concerned about his safety and the security of his possessions, Mark grew worried. He provided his landlord with notice in writing and contacted an attorney. Much to his dismay, Mark learned that Minnesota law would not permit him to simply hire a local glass company to repair the door and then deduct the cost from his rent.13 Mark wanted to continue living in the apartment and maintain a positive relationship with his landlord. He was extremely hesitant to file a legal action against his landlord, which would require a filing fee and risk damaging their relationship.14 Mark reluctantly paid for the repair out-of-pocket and has since requested that his landlord reimburse him, to no avail. Mark’s situation depicts the difficult choices faced by Minnesota tenants and the inefficiencies associated with Minnesota’s current statutory remedies.
T.J. Patton is an investigator at the Minnesota Department of Commerce and an avid volunteer at the Hennepin County Housing Court Project. He also serves as cochair of the Volunteer Lawyers Network’s (VLN) Housing Committee. Before joining the Department of Commerce, he was an associate at a Minneapolis law firm.
The author acknowledges with thanks the support of his wife, Elizabeth, and the assistance of Eric Hauge (HOME Line), Chris Hanrahan (VLN), and Larry McDonough (Dorsey & Whitney, LLP).
1 Joint Center for Housing Studies of Harvard University, America’s Rental Housing—Evolving Markets and Needs 1 (2013).
2 Id.; M. Anthony Carr, “Repair and Deduct Laws Give Tenants Options,” Realty Times (02/08/2007), https://tinyurl.com/laucrth. Last visited 06/13/2014.
3 U.S. Census Bureau, American Community Survey: Minnesota – Selected Housing Characteristics (2012), https://tinyurl.com/3fpopqw.
4 Iowa Code §562A.23 (2011); N.D. Cent. Code §47-16-13 (1978); S.D. Codified Laws §43-32-9 (1983).
5 Moving might present a viable option in certain situations, but tenants should be wary of abandoning their obligations under a lease. See, Minn. Stat. §§504B.125-135 (2012); see also, Lawrence R. McDonough, “Wait a Minute! Residential Eviction Defense in 2009 Still is Much More Than “Did You Pay the Rent?” 35 Wm. Mitchell L. Rev. 764, 772. Under certain circumstances, moving and then, if necessary, asserting a constructive eviction defense provides an exception to the general rule. Minn. Stat. §504B.131 (2012).
6 Minnesota tenants are statutorily empowered to seek recourse for repairs in court—which requires the tenant to “offensively” petition the court for relief—through a Rent Escrow Action, Tenant Remedies Action, or Emergency Tenant Remedies Action. Minn. Stat. §§504B.381, 504B.385, 504B.395 (2012).
7 Minn. Stat. §504B.161, subd. 1(a)(2) (2012).
8 Eric Hauge, “Cities and States Should do More to Protect the Tenants of Irresponsible Landlords,” MinnPost (01/30/2012), https://tinyurl.com/ka66hbc; Emma Nelson, “Tight Mpls. Housing Market Adds to Squeeze on Low-Income Renters,” Star Tribune (05/03/2014), https://tinyurl.com/kdxudjj.
9 James Charles Smith, “Tenant Remedies for Breach of Habitability: Tort Dimensions of a Contract Concept,” 35 U. Kan. L. Rev. 505, 532 (1987).
10 According to the Minnesota Court Information Office, there were 249 Rent Escrow Actions and Emergency Tenant Remedies Actions filed statewide in 2012. There were 264 such actions filed statewide in 2011.
11 Twenty-four states have adopted repair and deduct by statute while nine have adopted it by common law.
12 Posting of Michael Dahl to HOME Line blog, “My Landlord Won’t Make Necessary Repairs,” https://tinyurl.com/nasqu9k (08/10/2010).
13 St. Paul is one of a small number of Minnesota cities that have adopted a narrow “repair and deduct” remedy for tenants experiencing a loss of heat in the winter. St. Paul, Minn., Code Title 6, §49.03 (1983).
14 Mark’s damaged door would likely qualify for the filing of an Emergency Tenant Remedies Action due to his loss of an essential facility. Minn. Stat. §504B.381 (2012). The filing fee would be $327 in Ramsey County. Minn. Stat. §357.021 (2012). If the repair problem did not require urgent attention, then Mark could file a Rent Escrow Action, which requires a filing fee of only $80. Minn. Stat. §§357.022, 504B.385 (2012).