Minneapolis Requires Owners to License Relatives

The Minneapolis Star Tribune reported last week that the city of Minneapolis has changed the rules for “relative homesteading”.

Relative homesteading is when an individual owns a second home, and allows a relative to live there, rent free. This helped the property owner qualify for owner-occupied property tax status, and, until now, avoid paying a $65 rental license fee and the avoid the required city inspections for rental property.

A 2008 change in state law requires a property to be registered with the city if the owner receives any kind of compensation for allowing occupancy of any part of the property.

Compensation does not have to be in the form of rent. It may be as simple as the relative living there maintaining the property in lieu of rent.

As a result of the new statute, the City of Minneapolis’ Inspections Department decided to require all single-family relative homesteaded properties to get licensed. This was done with a goal of increasing the safety of these properties through inspections.

The new rule doesn’t apply to small multi-family properties like duplexes and triplexes.