Court appoints administrator for 43 buildings owned by Minneapolis landlord

A Hennepin County housing court referee on Monday appointed an administrator to oversee 43 rental properties owned by Mahmood Khan after the embattled Minneapolis landlord lost his rental licenses and exhausted his legal appeals.

The unprecedented decision by referee Mark Labine was hailed as victory by tenants' rights advocates because the tenants, most of whom have low incomes, had been informed by the city's regulatory division that they would face eviction on Feb. 28 unless they moved.

The city had begun organizing efforts with nonprofit groups to seek alternative housing for the tenants. In an affidavit submitted earlier to the court, Noah Schuchman, head of regulatory services, said he supported the appointment of an administrator.

"I feel good about this," said Tecara Ayler, who had been renting a house from Khan on the 3400 block of Penn Avenue N. and had been given orders to move out. "It does relieve some of the pressure. … We still don't know what happens next."

Never in the history of Minnesota have so many rental properties been put under one administrator by a court, said Larry McDonough, who heads pro bono legal work for the Dorsey & Whitney law firm, and has represented some 10,000 tenants and landlords over the past 34 years.

McDonough, who is not involved in the case, said it was also unprecedented that a tenants' remedies action was used in court to have an administrator appointed. Such actions, which are rare in and of themselves, are normally aimed at getting a landlord to make repairs.

"It's a huge victory for the tenants," he said, and sends a message to other tenants and landlords that if they lose their license it does not mean tenants will be evicted.

The request for the administrator was brought by pro bono attorneys at Faegre Baker Daniels on behalf of tenants who faced eviction.

The buildings are all either single-family homes or duplexes and house several hundred tenants. Some tenants have complained that some of the properties are in disrepair.

Labine agreed to the request by Faegre lawyers to the appointment of James Bartholomew of Lighthouse Management of New Brighton. Bartholomew testified Monday that he will appoint a property manager to collect rents and bring in inspectors to determine what repairs need to be made on the buildings, and whether it makes financial sense to do so.

A hearing on his findings has been scheduled for March 23.

Faegre attorney Jim Poradek said Labine's action will "allow a professional crisis manager to figure out how to solve the problems."

Khan submitted a memorandum to Labine on Monday opposing the appointment of an administrator, blaming a combined effort by the city "and big law firms" united against him. "This lawsuit is like being spat upon by thieves and this court should waste no time in turning it away," he wrote.

After the court hearing, Khan appeared to have changed his view. "It's beneficial for everyone," he said.

In 2015, the Minneapolis City Council voted to revoke all his rental licenses after he lost two licenses over rental violations. Under a city ordinance designed to root out bad landlord practices, if a landlord loses two licenses, he automatically faces revocation of all his licenses for five years.

Khan appealed the revocations all the way to the U.S. Supreme Court, which refused to hear the case, setting in motion the city action that banned Khan from renting properties in Minneapolis.

In a letter to Khan last week, Schuchman warned him that he could face criminal charges if he continued to rent out his properties. Faegre attorneys presented an affidavit to Labine Monday indicating that Khan had just brought in a new renter. Khan denied in an interview that he was continuing to take on new renters.

He said that of the 43 buildings he currently owns, five or six are vacant and he has sold three of them.

Kevin Woods, who lives on the 4000 block of Dupont Avenue N., applauded the appointment of an administrator.

"I'm happy someone has taken over," he said. "Maybe someone will do some things." Woods said the house has been plagued with problems including water leakage, which has led to high water bills and an electrical system that frequently malfunctions.

Randy Furst• 612-673-422