St. Paul tenant sues landlords for alleged rent control violation

A St. Paul woman on Tuesday filed a lawsuit against the owner and property manager of her rented duplex, arguing they knowingly violated the city's rent stabilization law.

Attorneys from the nonprofit Housing Justice Center, which is representing tenant Amy Farah, say they believe she is the first renter to seek court enforcement of the voter-approved ordinance that took effect last year.

The 110-page complaint filed in Ramsey County District Court says that in June 2022, Farah's monthly rent in the W. 7th neighborhood increased 48%, from $1,150 to $1,704. St. Paul's ordinance caps annual rent hikes at 3% unless a property owner provides justification for a greater increase to the city.

Property manager Housing Hub and Larry Kasella, who owns the duplex through a trust, did not engage with the city's process for seeking an exception from the law, according to the lawsuit. In June 2022, after Farah filed a complaint with the city, the St. Paul Department of Safety and Inspections sent letters to Housing Hub and Kasella explaining the rent stabilization ordinance and warning that failure to comply "may result in litigation, a criminal citation or any other remedy available at equity or law."

City officials have said they have limited options to enforce rent stabilization, describing criminal citation as their main tool. Those cases have a high burden of proof and demand significant time and resources, officials have said.

Representatives for Housing Hub and Kasella, who are both named as defendants, declined to comment on the lawsuit. They said they had not been served as of Thursday afternoon.

"What I can respond to is the fact that this property has passed a rigorous inspection with the city of St. Paul and has a current rental license," said Joe Collins, CEO of Housing Hub, in an email. "We have also responded to all work orders. Housing Hub is committed to providing safe and affordable housing in the city of St. Paul."

Farah and her adult daughter have lived in their unit since 2016. Farah is physically disabled and suffers from depression, and she relies on her daughter for care and support. The duplex was sold to its current owner before the pair signed their 2022 lease.

"Once the Defendants assumed ownership and management of the Property, Ms. Farah's experience as a tenant of the Property quickly took a turn for the worse," the lawsuit says.

In June 2023, Farah's rent was raised again. The lawsuit said that including new fees for pets and a month-to-month renewal option, rent increased $98, a nearly 6% increase from 2022.

"Defendants have and are continuing to charge and collect thousands of dollars in illegal rent from Ms. Farah — and are likely engaging in this same unlawful conduct across other St. Paul properties," the complaint says.

In addition to the alleged rent control violation, Farah's lawsuit argues that her landlords breached requirements in her lease and state health and safety laws. The complaint lists a string of maintenance issues, including problems with the water heater, furnace and snow removal.

The suit also includes two other counts, which allege that the property owner and managers financially exploited a vulnerable adult and violated the Minnesota Consumer Fraud Act.

Farah is seeking repayment of overcharged rent, as well as other damages, attorney's fees and investigation costs. The suit also argues Farah is entitled to a civil penalty under the consumer protection law for up to $10,000.

"It takes a lot of courage for tenants in vulnerable circumstances to stand up for their legal rights," said Jim Poradek of the Housing Justice Center, adding that the nonprofit "is proud to be supporting Ms. Farah in this lawsuit."

The lawsuit also seeks a court injunction ordering Housing Hub to comply with rent stabilization and other housing laws at all its properties.

Earlier this year, Housing Hub agreed to pay $63,000 through a settlement with the state Attorney General's Office, which said the company was illegally withholding money from tenants' security deposits to cover ordinary wear and tear.

Collins previously estimated that Housing Hub manages 1,500 properties in St. Paul. He has said rent control makes it more difficult to conduct business and maintain good relationships with tenants, since the law prompted the company to delay some capital work and raise rents 3% across the board.