U.S. Supreme Court ends embattled Minneapolis landlord Mahmood Khan's appeals process

Up to 300 tenants found themselves in limbo on Monday after the U.S. Supreme Court cleared the way for Minneapolis to enforce a City Council decision to revoke the rental licenses of one of its landlords.

The high court refused to grant a hearing to Mahmood Khan, who appealed a 2016 council action stripping him of 42 rental licenses, most of which are affordable single-family homes and duplexes scattered around north Minneapolis.

Between 2008 and 2015, Khan racked up 3,550 housing violations and generated more than 2,200 visits from city housing inspectors.

"We never expected the United States Supreme Court to accept this case and it was just another instance of delay on the part of Mr. Khan," said Minneapolis City Attorney Susan Segal.

Segal said the city had agreed to postpone enforcement of the license revocation until Khan had exhausted his appeals.

The Supreme Court decision ends Khan's options to appeal, Segal said, and the city will move forward on revocation and work with the tenants.

At the same time, she added: "The city is very concerned about negative impacts on tenants and making sure they are cared for during the transition period."

How that will work remains unclear, given that Khan's tenants are generally earning low incomes, and the city faces a severe shortage of affordable housing.

Noah Schuchman, director of regulatory services, said the city would enforce the license revocations with tenants' considerations in mind.

The city "has discretion on the timing of any vacation of Mr. Khan's properties," Schuchman said in an e-mail. "We are committed to providing appropriate notice to residents and will be able to provide additional information at a later date, once we have had time to plan and communicate with residents and community stakeholders."

Luke Grundman, managing attorney for the housing unit at the Minneapolis office of Mid-Minnesota Legal Aid, said that it had been hard for tenants to understand the urgency of their situation because it was difficult to predict when the appeals would be exhausted. He said many tenants don't know what their rights are. He said he had been previously told by Schuchman that tenants would get plenty of time before they faced eviction, and he doubted the city will start evictions soon.

"I don't think they will move quickly because they will face an outcry if they do," Grundman said.

He said that even if the properties are sold, there is no guarantee the city will grant rental licenses to the new owners, because of the condition of the buildings.

"A buyer would face a significant hurdle in getting them fixed," he said.

Khan said Monday that his tenants will suffer as a result of the high court decision.

"To me it is a loss for my tenants," he said. "It is not as much of a loss for me. I can sell [the properties]. There is a housing shortage and there's a seller's market."

The average age of his properties was "a hundred plus years old," he said, and the total value of the properties, which include 11 duplexes, could be in the range of $5 million.

In 2015, James Gurovitsch, an administrative hearing officer, endorsed the city decision to revoke the licenses.

"These requests for services at Mr. Khan's properties have led to an inordinate number of site visits by housing inspectors to the properties resulting in an astounding number of written orders," he wrote. The number of site visits and re-inspections to these properties has caused a drain on city resources and would not be necessary if the owner was proactive in his management of these properties."

Khan said that the 3,550 housing violations he received were not so many when one considers he at one point had about 90 properties and the violations occurred over seven or eight years. He said some of the buildings he bought had 100 violations before he repaired and rented them out.

Kahn is not the only landlord to face license revocation proceedings by the city. Last month an administrative hearing officer issued an opinion that city regulators could strip about 60 rental licenses from Stephen Frenz, who they contend repeatedly failed to disclose that controversial landlord Spiros Zorbalas continued to have an ownership interest in his properties. The city revoked Zorbalas' license in 2010.

A City Council committee will hear the Frenz case on Nov. 28, then forward its decision to the City Council, which will then vote on whether to revoke the licenses.

Randy Furst • 612-673-4224

Twitter: @randyfurst