New Minneapolis rent ordinance allows tenants to break leases if units aren’t ready

MINNEAPOLIS (FOX 9) - Following a popular new apartment building in Dinkytown not being ready for students to move in – while holding prospective tenants to lease agreements – a new ordinance has been signed by Minneapolis Mayor Jacob Frey that will allow tenants to break their lease if their unit is not ready by the agreed upon move-in date.

The new ordinance is intended to protect the rights of renters who sign pre-leases for new construction buildings. The ordinance says, "If a new rental construction has not received a certificate of occupancy on or before the move-in date established in the lease agreement, the tenant is entitled to: alternative housing provided by the landlord that is reasonably equivalent to the unit described in the lease agreement; reimbursement from the landlord of the total rent paid by the tenant each month to offset the costs of alternative housing; or withdraw from the lease agreement and receive all amounts paid to the landlord returned."

A landlord found in violation of the ordinance would be subject to administrative citations or adverse rental license action, according to the ordinance that amends Chapter 244 of the Minneapolis Code of Ordinances relating to Housing Maintenance Code.

According to Minneapolis City Council member Robin Wonsley, the ordinance was inspired by the Identity Dinkytown apartment building, which last fall enforced rental agreements on more than 550 students, even though their units weren’t ready for move-in as the school year began.

At the time, the Delaware-based corporation that owns the building — CA Student Living Dinkytown II, LLC — offered residents two options: stop paying rent and collect $150 a day for living expenses or keep paying and get placed in alternate housing, like a hotel, plus $80 a day.

"Residents reached out to my office asking us to use our full authority to ensure the situation at Identity Dinkytown never happens again, and my office worked quickly to do just that," said Council Member Robin Wonsley at a ceremonial signing Monday. "We could not be at this moment without the leadership and expertise of students themselves as well as city staff, University leaders, and organized labor."

Wonsley represents Ward 2 in Minneapolis, which encompasses the University of Minnesota area. The ordinance is effective immediately. 

"This ordinance makes a whole lot of sense, because it’s fair," said Frey on Monday. "We’ve got students who need to be able to move into their apartments on time and be able to attend classes. If you can’t do that, it’s not fair to anybody, and this ordinance helps correct that."

FOX 9 previously spoke with University of Minnesota students who were attempting to find alternate housing when they were told their apartments would not be ready. 

"The developers who abuse workers are often also the landlords who make their tenants pay for space that isn’t ready," said Dan McConnell, Business Manager of the Minneapolis Construction and Trades Council on Monday. "While this ordinance alone will not end the exploitation of workers, it will create a giant incentive to hire companies who treat their workers fairly and are looking to complete projects on time and on budget."

FOX 9 also previously highlighted concerns among construction workers of the apartment building who said they were receiving infrequent payments for work completed – one reason for the delay in construction.