Dozens of tenants could get reprieve after court overturns evictions sought by Minneapolis landlord

Stephen Frenz, the landlord who was stripped of dozens of rental licenses last year by the Minneapolis City Council, suffered another legal setback on Monday when a Hennepin County District Court referee reversed his eviction of six tenants at a southside apartment building.

The ruling appears to have broader impact, forestalling evictions in four other apartment buildings owned by Frenz, according to Luke Grundman, managing attorney for Mid-Minnesota Legal Aid. About 60 evictions are in effect voided, said Jennifer Arnold of United Renters, a tenant rights group.

Frenz's company, Equity Residential Inc., illegally gave tenants at 3122 22nd Av. S. only two months' notice when it issued eviction notices in July, ordering tenants to leave by Sept. 30, court referee Melissa Houghtaling wrote in her memorandum.

"The statute is clear in its requirements," Houghtaling wrote. "Landlord must give notice in writing and the time of that notice must be three months if no rent is due. Here, no rent is due."

While the case was pending, Equity Residential sent tenants in the five buildings new eviction notices on Nov. 30. It gave tenants three months to vacate, so they won't have to leave until Feb. 28.

"Initially they [the tenants] were going to be thrown out at the end of September; now it is the end of February — that's a huge win," said Arnold.

Frenz has been in the hot seat since January 2016 when pro bono attorneys from Faegre Baker Daniels discovered in an unrelated case that he was in a secret financial partnership with Spiros Zorbalas.

Zorbalas, whose buildings had been in constant disrepair, had been banned from operating apartment buildings by the City Council in 2011. Frenz announced he bought 60 properties from Zorbalas, not disclosing that he and Zorbalas had hatched an arrangement where Zorbalas would retain 80 percent ownership.

Once the city learned Zorbalas was still an owner, it rescinded Frenz's rental licenses. Frenz sought to overturn the revocation before the Minnesota Court of Appeals last week.

With his licenses in jeopardy, Frenz sold off many of his buildings in 2017 through contracts for deeds. But the city concluded that under contracts for deed, ownership could revert to Frenz and Zorbalas if buyers missed mortgage payments. So the city refused to issue the new buyers rental licenses.

Rickey Misco, a former Frenz employee, bought five of Frenz's buildings on contracts for deed but was unable to get rental licenses. A court-appointed administrator took over Misco's buildings, did some repairs and collected rents. The administrator was discharged July 31 when Frenz resumed control of the buildings. Without licenses, he was barred from collecting rents.

Vanessa Del Campo Chacon, 42, who lives with her husband, daughter and son in one of the apartments affected by the court order, said Monday that she was "feeling much less anxious" as a result of the ruling and relieved she will be able to spend Christmas at home with her family.

She also expressed optimism that with fundraising efforts, tenants may be able to buy the buildings as soon as Frenz "is prepared to sell."

Frenz and his attorney, Douglass Turner, did not return phone calls Monday.

Randy Furst • 612-673-4224 Twitter: @randyfurst