City of Minneapolis and Owners of Former Stephen Frenz Properties Settle
The City of Minneapolis and the new owners of 18 apartment buildings formerly controlled by Stephen Frenz reached a settlement, just as trial was slotted to begin this week. The main terms of the settlement set out protections for the tenants in over 450 units across all 18 apartment buildings.
The properties have had problems for years. Many of the buildings were previously owned by Spiros Zorbalas. However, Zorbalas had his rental license revoked in 2012 for a myriad of reasons, primarily for leaving the apartment complexes in disrepair. After Zorbalas’ license was revoked, Frenz represented that he purchased the properties from Zorbalas. But in 2017 it was discovered that the men still co-owned the buildings. Because of this, and other complaints from tenants, Frenz had his rental license revoked as well, ending his reign as one of the city’s biggest landlords.
Last fall, both Frenz and Zorbalas agreed to pay $18.5 million to tenants in a class action lawsuit. Most of the 60 properties then-owned by Frenz have now been sold to new owners pursuant to contracts for deeds. The city originally refused to grant rental licenses to the new owners if the purchases were financed through a contract for deed, as that meant Frenz and Zorbalas would still retain some control over the properties. While many of the purchasers found alternative forms of financing, purchasers of 18 buildings refused, leading to the just-settled lawsuit.
Five other buildings are still currently owned by Frenz, who is threatening to evict all of the tenants for lack of payment. However, city ordinance states that landlords cannot collect rent unless they have a license. Tenants have offered to purchase the five buildings, but state that Frenz refused their offer. A public event supporting the tenants is being held on April 13th, but the future of those buildings remains uncertain.