Housing court orders Minneapolis landlord Stephen Frenz to return $27,813 to tenants

A Hennepin County housing court referee has ordered controversial Minneapolis landlord Stephen Frenz to return $27,813 in rent to six tenants in what is believed to be the largest rent abatement for multiple tenants in the 27-year history of Minnesota housing courts.

Citing "persistent infestations" of roaches, bedbugs and mice, plus problems with heat and lack of repairs, referee Mark Labine filed his decision on Wednesday ordering Frenz to return 50 percent of the rent he collected at a south Minneapolis apartment house, most of it over the past two years.

Frenz has already received a record $187,390 sanction for "bad faith litigation conduct" and faces a lawsuit seeking class-action status involving thousands of tenants. The hearing to determine whether class-action status is granted will be Friday in Hennepin County District Court.

The city of Minneapolis has also taken action to strip Frenz of his right to hold rental licenses for more than 60 of his properties. The action comes after revelations that another landlord, Spiros Zorbalas, still has a financial interest in apartment buildings he claimed to have sold to Frenz once he was banned from having rental licenses in the city.

Larry McDonough, a Dorsey & Whitney attorney who wrote the law that created housing courts in Hennepin and Ramsey County, said he believed there has been no larger total abatement order ever issued, although he said it is not the single largest abatement award for a single tenant.

McDonough is not involved in the case.

"I'm happy," said Michael Cockson of Faegre Baker Daniels law firm, the lead pro bono lawyer for the tenants who are receiving abatements.

"The tenants got the remedies they deserved. I'm disappointed it took well over a year and all the hurdles they had to go through to simply let the truth be heard," he said.

Frenz's attorney, Matthew Engel, declined to comment on the case or whether he plans to appeal.

The tenants, led by Inquilinxs Unidxs por Justicia (Renters United for Justice), a tenants' rights group, sought legal help in January 2016 because of heating problems during a severe cold spell at 3057 14th Ave. S. in Minneapolis.

During the court proceedings, the tenant attorneys discovered Frenz created phony leases in hopes of persuading a housing court referee to dismiss the suit on grounds that a majority of tenants did not support the lawsuit. When the ruse was discovered, Frenz withdrew the leases and his original attorneys resigned from the case.

Even though the abatement amount was historic in size, McDonough said that he believed Labine's abatement award was too small. "Anyone who has lived through an infestation would say that it's probably the worst thing they have ever experienced," he said.

"I think the infestation of this magnitude should have justified a complete abatement."

Ayde Reales Morales and her partner, Antonio Recinos Salguero, will receive an abatement totaling $4,694. "I want to thank Inquilinxs Unidxs por Justicia because without the group uniting us, this wouldn't have happened," she said.

"I feel good because we've suffered a lot," Salguero said, "from the bedbugs to the cockroaches and the floods from the sewer backup."

Randy Furst • 612-673-4224