Pretium Partners’ and Ares Management’s Havenbrook Homes sued by Minnesota Attorney General for “shameful,” “deceptive,” and “fraudulent” practices in failing to repair and maintain rental homes

On February 10, 2022, Minnesota Attorney General Keith Ellison announced that he had filed a lawsuit against Havenbrook Homes, Front Yard Residential, and Pretium Partners, which collectively own more than 600 single-family residential rental properties in Minnesota. The lawsuit alleged that the company “failed to repair and maintain rental homes that lacked heat, had backed-up sewers, doors and windows that would not close, mold, even wild animals – and when it did, violated Minnesota’s lead-paint rules.”[1]

In January 2021, Ares Management acquired HavenBrook’s parent company, Front Yard Residential, in a joint venture with Pretium Partners – the country’s second largest owner of single-family rental homes.[2] Additionally, Ares Management’s Landmark Partners is invested in Pretium’s single family rental operation^.[3] For several months, tenants have alerted Pretium, Ares, and Landmark Partners and their investors to maintenance issues, increasing rents and fees, and a lack of communication with the company when issues arise.

In a 42-page complaint, Minnesota Attorney General Keith Ellison alleged that Havenbrook Homes failed to make repairs on their rental homes, failed to comply with Minnesota Lead Poisoning Prevention Law, and violated the state’s eviction moratorium by telling tenants to vacate their homes during COVID-19.[4]  Attorney General Ellison stated in a press release, “I filed this lawsuit because it’s my job to protect Minnesotans from fraud and abuse, and tenants are consumers of housing who are entitled to the same protections as all consumers. HavenBrook’s strategy of extracting profit from their tenants by claiming to provide them with prompt, high-quality maintenance and repair but actually leaving them in uninhabitable homes isn’t just shameful, it’s deceptive, fraudulent, and violates Minnesota law. I’m holding them accountable for it.”[5]  

The lawsuit charges that the companies “misrepresent to Minnesotans that they will provide ‘around the clock’ ‘same-day service’ ‘seven days a week’ for emergency repairs when in reality they often take days to respond to urgent repairs like lack of heat in winter.” The lawsuit goes on to allege that, “Even more egregiously, when Defendants make repairs, they systematically fail to take mandatory lead-based paint safety precautions, thereby putting vulnerable Minnesota children at risk of serious life-long health problems.”[6]

Pretium Partners has come under fire for its practices of trying to evict tenants in other states during the COVID-19 pandemic in violation of federal and state eviction moratoriums.[7] The Attorney General lawsuit alleges that Pretium engaged in similar practices in Minnesota in violation of the state moratorium and cited examples of HavenBrook Homes sending “their tenants Pay or Quit notices that threatened ‘in the event you fail to pay the full past due balance plus applicable fees within seven (7) days of the date of this letter, consider this as notification that a Court Action for eviction may be filed immediately.”[8]

In a statement to theStar Tribune, Pretium Partners said that it is reviewing the lawsuit and maintains “[w]e are committed to providing the highest-quality rental housing experience possible by offering consistent, dependable and attentive service for all residents in Minnesota and across the country.”[9] 

Attorney General Ellison said that his office is unaware of any similar cases in other states, however, he indicated that he often communicates with other Attorneys General “I talk with my colleagues in other states all the time, and I do plan on talking to them about this lawsuit.”[10]

[1] The Office of Attorney General Keith Ellison. “Attorney General Ellison Sues HavenBrook Homes, One of the Largest Landlords in Minnesota, for Failing to Repair Rental Homes, Violating Law,” February 10, 2022. https://www.ag.state.mn.us/Office/Communications/2022/02/10_HavenBrookHomes.asp.

[2] https://pretium.com/pretium-ares-management-and-front-yard-residential-complete-first-ever-single-family-rental-take-private-transaction/

[3] https://www.newprivatemarkets.com/citizens-group-asks-minnesota-to-review-landmark-relationship-2/

[4] State of Minnesota v. HavenBrook Homes, LLC, et.al., https://www.ag.state.mn.us/Office/Communications/2022/docs/HavenBrookHomes_Complaint.pdf

[5] The Office of Attorney General Keith Ellison. “Attorney General Ellison Sues HavenBrook Homes, One of the Largest Landlords in Minnesota, for Failing to Repair Rental Homes, Violating Law,” February 10, 2022. https://www.ag.state.mn.us/Office/Communications/2022/02/10_HavenBrookHomes.asp.

[6] State of Minnesota v. HavenBrook Homes, LLC, et.al., https://www.ag.state.mn.us/Office/Communications/2022/docs/HavenBrookHomes_Complaint.pdf

[7]https://www.thestar.com/business/2021/08/07/pretium-partners-is-under-congressional-investigation-and-critics-are-asking-again-why-a-major-canadian-pension-fund-formed-a-870-million-partnership-with-the-company.html

[8] State of Minnesota v. HavenBrook Homes, LLC, et.al., https://www.ag.state.mn.us/Office/Communications/2022/docs/HavenBrookHomes_Complaint.pdf

[9] Nelson, Emma. “Minnesota Attorney General Sues Hedge Fund-Owned Landlord over Maintenance Problems.” Star Tribune, February 10, 2022. https://www.startribune.com/minnesota-attorney-general-sues-hedge-fund-owned-landlord-over-maintenance-problems/600145274/.

[10] Nelson, Emma. “Minnesota Attorney General Sues Hedge Fund-Owned Landlord over Maintenance Problems.” Star Tribune, February 10, 2022. https://www.startribune.com/minnesota-attorney-general-sues-hedge-fund-owned-landlord-over-maintenance-problems/600145274/.