COTTAGE GROVE, Minn. — The problems started June 1, when Juan Castillo and his wife moved into their rented house on Irish Avenue.

The owners of Castillo’s Bakery in St. Paul had signed a one-year lease with Home Partners of America, a rent-to-own real estate investment company in Chicago.

The couple discovered that they couldn’t use either of the home’s two showers because a leak in one of the bathrooms caused water to seep down into the kitchen.

The Castillos joined a gym so they would have a place to shower.

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“I’m paying this much and I can't even use the shower,” Juan Castillo said of his $2,400 a month rental.

Castillo said he made repeated calls to the division responsible for HPA property repairs — Pathlight Property Management based in Plano, Texas. The leak finally was fixed about two months ago, he said.

Castillo said he wanted to get out of the lease but that doing so would cause him to lose his $4,540 damage deposit.

“I don’t want anything free,” he said. “But I don’t want them to take advantage of me.”

A pattern

The city of Cottage Grove got the same runaround when it tried to contact HPA about safety and compliance issues at the Castillos' rental.

At a Feb. 5 hearing, Cottage Grove City Council voted to deny a renter’s license for the property, along with two others. The denials will last six months.

“These three applications are the straw that broke the camel's back,” City Attorney Kori Land said.

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The move puts the Castillos and other renters in a bind: because they are renting unlicensed homes, the city will require them to vacate the premises in 90 days.

City Administrator Jennifer Levitt stressed that the move was for their own safety, and that the city is prepared to assist them in finding new quarters.

“The city takes this action seriously and recognizes that the tenants may not even have been aware of the landlord’s actions,” she said. “Council is very clear that we want to lend aid to those tenants.”

Land cited numerous code violations, including failed inspections at the Irish Avenue house for unsafe/unsanitary plumbing conditions, another at a home on Jeffrey Avenue, where an inspector found that an outlet in the kitchen did not have a ground fault circuit interrupter, a circuit breaker that prevents electric shock and overheating.

In March, the city made three attempts to contact HPA about fixing the outlet.

The home is rented by former Hastings girls’ hockey head coach Jeff Corkish his wife, Laura and their three children. They’ll be moving back into their home on Jensen Avenue, which was damaged by fire Jan. 31.

He said they’re glad to be moving back.

“After you have a house fire, you’re a little worried about that stuff. The fridge would keep shorting out. It was very inconvenient getting someone here when we needed them to be here ... it’s such a great big corporation you can’t get through to anybody.”

Lesson learned

HPA also missed the deadline for scheduling a home inspection at 9061 Jareau Ave. City code requires that owners request the inspection as part of the renter’s license application process.

“To the say the least, communication has been a problem with this company in trying to find someone to be responsive and to be responsible for these properties and these applications,” Land said. “City staff wants to work with property owners. They want things to work well.”

But HPA didn’t make it easy, she said. Connecting with the right party was a needle-in-a-haystack process because the company operates under at least seven different names, including Home Partners of America - A New Path to Ownership, Home Partners Realty Minnesota LLC, HP Borrower 2019 LLC and HP Minnesota LLC.

Land said they found an online listing for a local HPA agent, with an address in Stillwater, but that it had an asterisk that said “Don’t send anything to this address.”

The license denials will not affect the 17 legal units that HPA owns in Cottage Grove, Land said.

Mike Grossman, a spokesperson for Pathlight Property Management, said they would help the renters find new homes if needed.

"We're going to do everything we can to protect and help these residents," he said. "That could include moving them to another HPA property. We'll pick up the expenses."

At the hearing, regional manager Anthony Hughes introduced council to a St. Paul man who will serve as manager of compliance and will oversee inspections, follow-up and work orders.

“You will no longer have to deal with somebody in Plano,” he said.

“My major concern today is to let everyone know that you have our full attention," Hughes said. "My biggest concern is, I don't want to see the residents in these three homes displaced because of something our office team failed to do.”

Council debated whether to table the issue until the next council meeting, which would allow HPA two weeks to bring the properties into compliance.

Council member Dave Thiede said it wasn’t fair to penalize the tenants for the infractions committed by their landlord.

“I just don’t understand why we would not want to say ‘Take that commitment, make sure that commitments happens,’” he said.

Council member Justin Olsen said the city has made more than enough good-faith attempts to work with HPA.

“Clearly the intent here is not to displace residents or cause hardships,” he said. “That being said, I don’t think we accept any blame or responsibility for being responsible for displacing these residents because the situation they’re in is not our fault.”

Home Partners of America also rents properties in St. Paul Park, Forest Lake, Hugo, Woodbury and South St. Paul.