On Monday, March 1, 2021, several new provisions intended to promote stable, accessible, fair and equitable (“SAFE”) housing policies in the City of St. Paul will take effect. The policies, set forth in Chapter 193 of the St. Paul Legislative Code, affect all residential rental property in St. Paul.
The ordinance focuses on improved protections for tenants and fair access to housing for everyone, and are intended to address racial and economic discrimination in housing.
Historical data shows that Minnesota prison populations include persons of color at a much higher rate than that of white persons. As such, using a prospective tenant’s criminal record as an “automatic disqualification” has a greater adverse impact on persons of color. Furthermore, since persons of color make up a significant portion of the rental population, but have a significantly lower per capita income, criteria that “automatically disqualify” a prospective tenant based on his or her credit history may have a discriminatory effect.
The ordinance seeks to establish specific measures to protect tenants by imposing restrictions on tenant screening guidelines, security deposits and lease termination for cause.
Tenant Screening Guidelines
Under the ordinance, a landlord must provide a copy of written rental screening criteria to all prospective tenants before accepting an application to lease a property. In addition, a landlord must apply uniform screening criteria to all applicants.
In addition, there are a number of specific bases upon which a landlord is prohibited from disqualifying an applicant. Those bases fall into three categories: Criminal history, credit history and rental history.
A landlord cannot disqualify an applicant for any of the following reasons:
- Any arrest or charge that did not result in conviction of a crime;
- Participation in or completion of a diversion or a deferral of judgment program, including but not limited to: pre-charge or pretrial diversion, stay of adjudication, continuance for dismissal, or a continuance without prosecution;
- Any conviction that has been vacated or expunged;
- Any conviction for a crime that is no longer illegal in the state of Minnesota;
- Any conviction or any other determination or adjudication in the juvenile justice system, except under procedures pursuant to applicable state law;
- A petty misdemeanor offense. By law, a petty misdemeanor is not a criminal offense, and therefore cannot be grounds for denial;
- Any misdemeanor, gross misdemeanor or felony conviction stemming from reckless driving, driving without a license, driving with a suspended or revoked license, and DUI that did not result in additional charges for injury to a person;
- Any conviction for misdemeanor or gross misdemeanor offenses for which the dates of sentencing are older than three (3) years;
- Except as indicated in paragraph (10) below, any criminal conviction for felony offenses for which the dates of sentencing are older than seven (7) years. However, a landlord may deny an applicant who has been convicted of the illegal manufacture or distribution of a controlled substance under the Controlled Substances Act (21 U.S.C. 802), or for those same offenses that mandate denial of tenancy in federally assisted housing subject to federal regulations, including, for example, when any member of the household is subject to a lifetime sex offender registration requirement under a state sex offender registration program.
- Any criminal conviction for the following felony offenses for which the dates of sentencing are older than ten (10) years:
- first-degree assault
- first-degree arson
- aggravated robbery
- first-degree murder
- second-degree murder
- third-degree murder
- first-degree manslaughter
- kidnapping, or
- first-degree criminal sexual conduct
A landlord may not reject a prospective tenant based on
- A credit score by itself. However, a landlord may use credit report information to the extent the report demonstrates a failure to pay rent or utility bills.
- Insufficient credit history, unless the applicant in bad faith withholds credit history information that might otherwise form a basis for denial.
A landlord may not reject a prospective tenant based on:
- A prior eviction action, if the action occurred three (3) or more years before the applicant submits the application or if the action occurred during the three years immediately preceding submission of the application, but did not result in a judgment entered against the applicant.
- Insufficient rental history, unless the applicant in bad faith withholds rental history information that might otherwise form a basis for denial.
Moreover, if a landlord uses a minimum income test requiring an income equal to two and half (2.5) times the rent or higher, the landlord must allow an exception to that test where the applicant can demonstrate a history of successful rent payment with the same or lower ratio of income to rent.
Whenever local, state, or federal funding or loan requirements for tenant screening conflict with any portion of the screening guidelines discussed in the ordinance, the funding or loan requirements will take precedence over only those portions in conflict.
Security Deposit Limitations
Chapter 193 prohibits a landlord from demanding, charging, accepting or retaining from a tenant more than a single month’s rent as a security deposit. Furthermore, no landlord may demand, charge, accept or retain from a tenant pre-paid rent in an amount that exceeds the equivalent of a single month’s rent.
The ordinance includes one exception to these deposit limitations: If a prospective tenant could be disqualified based on tenant screening guidelines (see above), then a landlord may charge up to one additional single month’s rent as security deposit or prepaid rent as a condition to entering into a lease with that prospective tenant.
Just Cause Notice for Tenants
Just Cause Notice
Under the ordinance, a landlord may not issue a notice terminating tenancy unless the landlord is able to establish one or more of the following grounds for termination:
- Non-payment of rent. The tenant fails to pays all money owed and/or cures other violations of the lease after receiving a non-payment notice from the landlord, and the landlord does not pursue a valid non-payment eviction action under state law, but opts instead to terminate tenancy at the end of the lease.
- Repeated late payment of rent. The tenant repeatedly makes late payments of rent (5 or more times in a 12-month period). The landlord must provide the tenant with notice following a late payment that a subsequent late payment may be grounds for termination of tenancy (which includes non-renewal of a lease). If the tenant continues to make a late payment on no fewer than five occasions per year, the landlord must give the tenant notice to vacate at least equal to the notice period outlined in the original lease agreement terms.
- Material non-compliance. After receiving a written notice to cease from the landlord, the tenant continues, or fails to cure a material violation of the lease. This subsection shall not diminish the rights of a landlord, if any, to terminate a lease for actions permitted under applicable law.
- Refusal to renew. The tenant refuses to renew or extend the lease after the landlord requests in writing that the tenant do so. The landlord shall give the tenant notice to vacate at least equal to the notice period outlined in the original lease agreement terms following the tenant’s refusal to renew or extend the lease. This subsection shall in no way diminish the 15-30 day notice period as required by law for leases with automatic renewal provisions.
- Occupancy by property owner or family member. The property owner, in good faith, seeks to recover possession of the dwelling unit so that the property owner or a family member may occupy the unit as that person’s principal residence. The property owner or family member must move into the unit within 90 days from the tenant’s vacation. If a “Substantially Equivalent Replacement Unit” is vacant and available, that unit must be made available to the tenant at a “Substantially Similar Rental Rate” as the tenant’s current lease.
- Building demolishment and dwelling unit conversion.
- The landlord elects to demolish the building, convert it to a cooperative provided the landlord complies with the provisions of applicable state law, or convert it to nonresidential use, provided that the landlord must obtain a permit necessary to demolish or change the use before terminating any tenancy, or
- The landlord seeks, in good faith, to recover the unit to sell it in accordance with a condominium conversion, provided the landlord complies with the provisions of applicable law, or
- The dwelling unit is being converted to a unit subsidized under a local, state or federal housing program and the tenant does not qualify to rent the unit under that program.
- Rehab and renovation. The landlord seeks, in good faith, to recover possession of the dwelling unit that will render the unit uninhabitable for the duration of the rehabilitation or renovation. The landlord must provide 90 days’ written notice to the tenant, and shall provide relocation assistance to the tenant upon delivery of the written notice. If a “Substantially Equivalent Replacement Unit” is vacant and available in the building, that unit may be made available to the tenant at a “Substantially Similar Rental Rate” as the tenant’s current lease.
- Complying with a government order to vacate. The landlord is complying with a government agency’s order to vacate, order to abate, or any other order that necessitates the vacating of the dwelling unit as a result of a violation of city codes or other laws. The landlord must provide relocation assistance to the tenant upon delivery of the written notice. If a “Substantially Equivalent Replacement Unit” is vacant and available in the building, that unit may be made available to the tenant at a “Substantially Similar Rental Rate” as the tenant’s current lease.
- Occupancy conditioned on employment. The tenant’s occupancy is conditioned upon employment on the property (e.g., building caretaker) and the employment relationship is terminated.
- Exceeding occupancy. Tenant exceeds the occupancy standards under city code. However, no tenant may be evicted, denied a continuing tenancy, or denied a renewal of a lease on the basis of familial status commenced during the tenancy unless one year has elapsed from the commencement of the familial status and the landlord has given the tenant six months prior notice in writing. The provisions regarding familial status do not apply where there is nonpayment of rent, damage to the premises, disturbance of other tenants, or other breach of the lease. The terms of this section of the ordinance cannot be waived by the tenant; any attempt to do so is void.
All residential tenant leases, except leases for state licensed residential facilities, and subject to all preemptory state and federal laws, must include the following Just Cause Notice language:
The landlord under this lease shall not unilaterally terminate or attempt to terminate the tenancy of any tenant unless the landlord can prove in court that Just Cause exists. The reasons for Termination of Tenancy listed in the City of Saint Paul’s Just Cause Notice (Sec. 193.05), and no others, shall constitute Just Cause under this provision.
With any termination notices required by law, landlords terminating any tenancy protected by the new ordinance must advise the affected tenant(s) in writing of the reasons for the termination and the facts in support of those reasons.
The “Just Cause” provisions of the ordinance apply to every lease, whether oral or written.
Penalties for Violation
If a landlord violates the terms of the ordinance, the landlord could face criminal prosecution and/or imposition of fines by the City. The landlord could also face claims made by the tenant directly. Damages in an action brought by a tenant could include relocation payment assistance, as well as attorneys’ fees and court costs.
This new ordinance imposes additional burdens upon residential landlords to provide evidence of just cause for termination or non-renewal of a lease. The parties to a lease cannot waive the rights or benefits created under the ordinance. Of course, there is nothing in the ordinance to prevent a landlord and tenant from mutually agreeing to terminate a lease.
These are only a few of the provisions of the new ordinance. The ordinance also includes provisions specific to affordable housing. The full text of the ordinance is available at https://www.stpaul.gov/sites/default/files/2021-02/ORD%2020-14%20Final%20Language%20Signed.pdf
 “Substantially Equivalent Replacement Unit” is defined in the ordinance as “a dwelling which is decent, safe and sanitary, contains at least the same number of bedrooms and other living areas as [tenant’s current leased unit], and is available at a Substantially Similar Rental Rate.” “Substantially Similar Rental Rate” is defined in the ordinance as the rental rate of the tenant’s current unit, plus five percent (5%) or minus ten percent (10%) of the of a single month’s rent for the tenant’s current unit.