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Manor v. Gales

August 27, 2002

CHANCELLOR MANOR, APPELLANT,
v.
JUDY GALES, ET AL., RESPONDENTS.



Dakota County District Court File No. C00115847

Considered and decided by Hanson Presiding Judge, Anderson Judge, and Halbrooks Judge.

SYLLABUS BY THE COURT

A landlord suffers an adverse financial effect under the Department of Housing and Urban Development regulation found at 24 C.F.R. § 247.3(c) (2001), when it incurs administrative costs due to a tenant's repeated violations of a lease.

The opinion of the court was delivered by: Halbrooks, Judge

Reversed and remanded

OPINION

Appellant challenges the dismissal of its eviction action against respondents, arguing that the trial court erred in finding that appellant did not suffer an adverse financial effect from its repeated disputes with respondents so as to warrant eviction under the Department of Housing and Urban Development guidelines. Because we conclude that the administrative costs incurred by appellant constitute an adverse financial effect, we reverse and remand.

FACTS

Appellant Chancellor Manor owns an apartment building in Burnsville and rents to respondents Judy Gales and Rasheda Gales through a Department of Housing and Urban Development (HUD) subsidized program. Appellant has filed at least 68 late-rent notices and 8 prior unlawful detainer/eviction actions against respondents since October 1992. Respondents always eventually paid the rent due and the penalties and other costs that appellant could recover under the law. Appellant often worked out special arrangements with respondent Judy Gales to help her avoid missing work and incurring legal fees.

Appellant filed the latest eviction action on October 25, 2001, after respondents failed to pay rent for September and October. Appellant instructed respondents to vacate the premises by November 30, pursuant to a HUD provision in the lease permitting eviction for repeated minor lease violations that have an adverse financial impact on the program. After receiving this notice, respondents paid rent for September, October, and November. Respondents also tendered rent for December, but appellant rejected the December payment because it wanted respondents to vacate the apartment by November 30. Appellant denied respondents' internal appeal.

Wendy Howell, site manager at respondents' building, testified on behalf of the appellant at a bench trial. Howell testified that filing a late-rent notice involves filling out the required paperwork and then copying, filing, and mailing the forms. She stated that the steps to file an eviction action include preparation of the eviction forms by the home office, driving to the home office to pick up the forms, filing them at the courthouse, serving the documents on the subject-residents, and re-filing them at the courthouse. Howell estimated that the eviction-notice process takes approximately three hours, not including any time spent in the ensuing court proceedings. She also testified that respondents paid all the late fees and court costs that they owed, but that appellant paid its own attorney fees.

The trial court acknowledged that respondents had paid their rent late many times in the past, but found that appellant had recovered all its costs allowed under the law. While recognizing that appellant incurred attorney fees from these disputes, the trial court concluded that appellant could have avoided fees by having one of its employees represent it in these actions. As a result, the court dismissed the case on the ground that appellant failed to prove that it had suffered an adverse financial effect from respondents' late payments. This appeal follows.

ISSUE

Did the trial court err in finding that appellant did not suffer an adverse financial effect in its ...


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