Renter goes to court over rent increase
A Rochester man who saw his rent increase by $244 four months after signing a 14-month lease found temporary relief in court last week.
Adbikarim Mohamed, whose rent on a two-bedroom apartment at Villages at Essex Place climbed from $875 to $1,119 on July 1, said he was able to pay the extra this month by using money he had saved from a recent tax return, but he’s unsure how August’s rent would be paid.
“It is very difficult for me,” he said during court testimony Thursday. “Otherwise, I will have to stop paying for electricity.”
From the stand in the Olmsted County district courtroom, Mohamed outlined the income he and his 72-year-old, wheelchair-bound mother share. She receives $750 in a monthly Social Security check, while his sole income stems from work as her personal-care attendant, which is provided through Olmsted County as part of his mother’s disability support.
Mohamed is paid for 32 to 40 hours of work each week, even though his mother requires 24-hour care. At $12 an hour, his income is roughly $1,600 to $2,000 a month, which Mohamed said provides approximately $1,400 after taxes.
He said the combined incomes have allowed him to pay rent at Essex Place since 2013, when he first moved in with his mother to provide around-the-clock care.
They shared a two-bedroom apartment with a roommate before moving to a one-bedroom apartment in 2015.
In February, he said he was happy to pay an extra $35 a month to move with his mother to a two-bedroom unit next door. However, he said he wouldn’t have done so if he knew the rent could climb to more than $1,000 in the middle of his lease.
He said $875 fits his monthly budget, which includes $400 to $500 in food costs, $100 for electricity, $40 for a phone and $500 to help support his children, who live in another apartment at Essex Place.
“That would be easy for me,” he said of the original rent. “I can afford that because that’s what I signed.”
If he would have stayed in the one-bedroom apartment, the monthly rent would have increased to $937 under the recent adjustments at Essex Place.
In May, Plymouth-based Dominium Apartments decided to equalize its rents at Villages at Essex Place at the maximum allowable rent under the federal tax-credit that helps developers build lower-priced units.
“In April of this year, (the Department of Housing and Urban Development) announced new annual rent limits based on revised area median income data for tax credit properties like Essex Place,” Dominium spokesman Owen Truesdell said.
“Following the HUD announcement, we evaluated the Rochester housing market and based on a market survey, new construction and job growth we concluded that the housing market in Rochester was tight enough to increase rents to the maximum allowable amount. Increased rents will allow us to continue to invest in the property and maintain it as a quality place for residents to live.”
He said past practices kept some rents below the maximum allowed because the market was perceived as weaker, indicating lower rents were needed to help fill units.
“The strategy was not to go to the maximum rents,” he said.
In a case filed by Southern Minnesota Regional Legal Services on behalf of Mohamed, attorney John Buhta agrued last week that the unexpected increase puts Mohamed and his mother at the risk of homelessness or defaulting on other bills.
“They are one car problem or one hospital visit away from not being able to pay the rent at this amount,” Buhta told Third Judicial District Judge Kathy Wallace.
Mohamed said a recent 15-day hospital stay for his mother means he won’t be paid for the two weeks she was not at home, which adds to the stress on their budget.
Drew McNeill, an attorney for Dominium, said the potential for mid-lease increases was cited in each lease Mohamed has signed with the company since 2013.
He also noted that Mohamed was offered the opportunity to break the lease without penalty, but Mohamed has said it would be difficult to find alternative living arrangements for his mother due to her condition and wheelchair requirements.
McNeill said Dominium sees the case as one that could have implications beyond Mohamed’s situation.
“This isn’t exclusive to these tenants, this isn’t exclusive to this property, and this isn’t exclusive to this city,” he said, noting a current metro-area eviction case is being argued in relation to the same lease provision.
Truesdell also said the lease provision is common in many properties that fall under the Low-Income Housing Tax Credit Program used by Essex Place. He said it’s not exclusive to Dominium.
Buhta, however, said his co-workers hadn’t seen such a case.
“To my knowledge, this is the first time a local landlord tried to raise rent in the middle of a lease term,” he said.
Wallace also said she has never seen an eviction case filed by a landlord that resulted from a mid-lease rent increase.
While she questioned a fraud claim in the complaint, Wallace said other aspects of the case appear to have merit, and she cited a potential burden on Mohamed if he’s required to pay $1,119 until the case is resolved.
“The irreparable harm to Mr. Mohamed would be the strong possibility of eviction,” she said.
Instead, she ordered Mohamed to continue paying $875 per month under his lease. He’ll deposit $50 a month into an escrow account created by the court.
If Mohamed wins the case, the escrow funds will be returned to him. If he loses, Dominium will claim the funds and have the opportunity to seek the balance of a monthly $194 from Mohamed.
Buhta predicted the case could move to a trial in January, but McNeill indicated Dominium plans to seek an earlier dismissal of the case.
Wallace directed both attorneys to work out a tentative schedule for the case by Friday.