Good Cause Required to Terminate Lease

January 12, 2010
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A household in Minnesota lived in a tax credit unit under a one-year lease, which stated that the lease could be terminated upon 60 days’ written notice. As the end of the lease term approached, the management company sent a 60-day notice to the household saying it would not renew the lease. The notice did not give any reason for the refusal to renew the lease. When the household did not move out when the lease expired, the management company evicted it. The household appealed its eviction, claiming that the nonrenewal was invalid because the notice did not specify “good cause” for nonrenewal. But the management company claimed that there was no good cause requirement for nonrenewals at tax credit sites, except under very limited circumstances that did not apply to the site. The management company claimed that the good cause requirement applies only when a site’s agreement with the state to maintain its low-income status terminates early because of foreclosure or because a buyer who will keep the site low-income cannot be found.

The Minnesota appeals court disagreed with the owner and told the trial court to reconsider the household’s eviction. The court said that the management company must have good cause to terminate the household’s tenancy at any time during its “extended low-income housing commitment” [Cimarron Village Townhomes, Ltd. v. Washington (7/27/99)].