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Attorney General Ellison secures victory against Minneapolis landlord's 'brazen and deplorable' illegal practices

Court orders Steven Meldahl to permanently stop deceiving tenants about lease terms, pay $133K fine and attorneys’ fees

 

November 17, 2021



Court finds former tenants’ trial testimony ‘credible and compelling,’ citing conditions at Meldahl properties of ‘Biblical plague proportions’; Meldahl’s behavior ‘nothing but having full knowledge of his actions and undertaking them in bad faith’

Court: ‘State has a substantial interest in preventing and deterring such brazen and deplorable illegal business conduct’; ‘a meaningful penalty is necessary to send a message that landlords are not above the system and that consumer protection laws must be followed’

November 16, 2021 (SAINT PAUL) — Late yesterday, Judge Patrick Robben in Hennepin County ruled that Minneapolis landlord Steven Meldahl knowingly and in bad faith violated the rights of 267 families who rented from him, primarily in North Minneapolis. The order in Attorney General Ellison’s lawsuit against Steven Meldahl follows an eight-day trial on the State’s claims that Meldahl falsely represented to his tenants that he could prevent them from having their homes inspected by the City of Minneapolis and that he could charge them late fees greater than 8 percent, which are prohibited under Minnesota state law.

The court declared Meldahl’s conduct illegal and entered a permanent injunction that prevents him from engaging in those deceptive practices. The court also fined Meldahl $500 for each of the 267 renting families, for a total of $133,500, and ordered him to pay the State’s attorneys’ fees and costs in pursuing the case. The State will determine its fees and costs and will file them with the court by December 13, 2021.

The court also ordered Meldahl to fully comply with all existing City of Minneapolis inspection orders and not to make any changes to his business structure in an attempt to avoid doing so.

“I am thankful for the brave tenants who did not back down to a landlord trying to take advantage of his power over the tenants and shared their powerful stories. Minnesota landlords are required to provide habitable homes and ensure that they are safe for our renting families,” said Attorney General Keith Ellison. “The landlord's behavior is appalling and unacceptable and I am glad the court agreed. Tenants in Minnesota have rights under the law and the majority of landlords comply with those laws. I will continue to enforce the law against those landlords who take advantage of their power over tenants and violate the law.”

Tenants who testified at trial described appalling living conditions that they struggled to afford when Meldahl raised their rent repeatedly after they paid rent late: see summaries of the dramatic testimony of former Meldahl tenants Shakerra Evans, Kelley White, Akilah Willingham, Da’Vonna Taylor, Dawn King, Mary Davis, Antonio Hunt, David Casburne, Tessa-Monique Kasanowski, Rena Washington-Lemon, and Nathan McGraw in ¶¶ 10-59 on pp. 4-9 of the court’s order.

The order states, “The Court largely found their testimony credible and compelling” (¶ 10, p. 4) and summarized it thus:

The Court heard extensive testimony from numerous former Meldahl tenants describing living conditions in their rental units that can only be described as appalling. Infestations suggestive of Biblical plague proportions—squirrels, mice, rats, gnats. Tenants being resigned to simply keeping the bathroom door closed to try and isolate a squirrel infiltration. Ongoing water damage destroying property, in one instance even causing a ceiling to collapse. A common credible refrain from tenants was of a landlord that was alternatively unresponsive or blamed tenants for the problems. The Court heard testimony about a landlord who had a tortured relationship with the truth, and would make up stories to try and deflect tenants. Meldahl has repeatedly bragged about his record of evicting a large proportion of his tenants. Meldahl’s efforts to paint himself as a gruff-talking benefactor making rental properties available to those lacking credit to get approved for leases elsewhere rang hollow given the horrible rental conditions described, and his seeming indifference to his tenants’ plight. (¶ 5, p. 2)

The court additionally writes: “Such unrelenting behavior can be characterized as nothing but having full knowledge of his actions and undertaking them in bad faith.” Recognizing the Attorney General’s authority to intervene, the court wrote, “The State has a substantial interest in preventing and deterring such brazen and deplorable illegal business conduct harming a vulnerable part of Minnesota’s population.”

In imposing a $133,500 civil penalty on Meldahl, the court declared that “… a meaningful penalty is necessary to send a message that landlords are not above the system and that consumer protection laws must be followed… Public policy also favors placing landlords on notice for failing to properly document the various aspects of their business such that they may be held accountable for their behavior by those seeking to be made whole.”

History of Attorney General’s lawsuit against Meldahl

Attorney General Ellison filed the case against Meldahl and his business, S.J.M. Properties, in September 2019 and immediately secured an injunction against Meldahl’s practice of barring his tenants from contacting health and safety inspectors. In 2019 the court also granted the State’s request to have all of Meldahl’s properties inspected, which revealed 383 housing code violations at 27 of his properties that the City ordered him to remedy.

In February 2021, the court ruled that Meldahl’s practice of charging tenants an additional $50 per month in supposed “rent” on top of an 8% late fee when they paid their rent late violated state law capping late fees at 8%. It set for trial the State’s claims that Meldahl’s practices were deceptive, in violation of Minnesota’s consumer-protection laws.

Other tenant-related consumer-protection litigation

In August 2021, Attorney General Ellison has filed another consumer-protection lawsuit against a landlord. Attorney General Ellison sued Schierholtz and Associates, Inc. for charging the residents of Broadmoor Valley manufactured home park in Marshall unlawfully high late-rent fees and persistently failing to maintain the park and its roads to the standards required by law. In the lawsuit, Attorney General Ellison asks the court to order Schierholz to abate the unlawful conditions in the park and seeks permanent injunctive relief, restitution for harmed residents, civil penalties, and attorney’s fees.

Minnesota law requires manufactured home park owners to maintain their parks in a clean, orderly, and sanitary condition. The State’s lawsuit alleges that Schierholz has not maintained Broadmoor Valley to this standard, causing undignified living conditions for its residents and severely disrupting their lives.

Filing a complaint as a tenant

Tenants in Minnesota who believe their landlord is violating their rights are encouraged to file a report with the Attorney General’s Office, or to call (651) 296-3353 (Metro area) or (800) 657-3787 (Greater Minnesota). For information about your rights as a tenant, visit the Office’s online publication titled Landlords and Tenants: Rights and Responsibilities.

 

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