GRANITE FALLS — In November, Katie Polman and Shannon McGraw sloshed through wet snow to knock on their neighbors’ doors in the Chippewa Terrace Mobile Home Park in Granite Falls and urged them to attend a meeting they arranged with an attorney from Mid-Minnesota Legal Aid.
The women wanted something done. Tenants were being told they had to purchase their trailers, but when they did so, they never received a title. Their rents had been increased, but repairs were not being made. The new owner, Scott Kramer, a disbarred attorney from Pennsylvania and managing member of Minnesota Parks LLC, was calling and harassing them, the women charged.
Kramer denied the charges when reached by the West Central Tribune for a previous story, but owners of 16 of the 35 manufactured homes in the park attended the meeting and voiced identical complaints. They were joined at the meeting by local business owners, who complained of not being paid for services to the park.
McGraw and her husband and Polman have since left Chippewa Terrace. “We ended up moving because it was such a nightmare,” said McGraw, when recently reached by phone.
But change has now come to Chippewa Terrace. The original owner of the park filed a foreclosure action against Minnesota Parks LLC and Kramer. A sheriff’s sale was held in May.
Former owner Gary Dalager had sold the park to Minnesota Parks LLC and Kramer for $744,600, according to court records. He received an initial payment of $365,000. A Newport Beach, California, company called Lendtuit loaned Minnesota Parks $365,000 for the initial payment and took first position on the mortgage to the park. Minnesota Parks granted Dalager a second position mortgage in the amount of $379,600.
Dalager’s attorney, Doug Kluver of Montevideo, said his client was not being paid the monthly installments as required, and the park was not paying its taxes, utilities and bills to vendors. The civil litigation lists more than $21,000 in delinquent taxes and unpaid bills. That led Dalager and his attorney to initiate the foreclosure process.
Dalager owns the trailer park again, subject to the first mortgage holder and its redemption right. Kluver said they have not heard what the company intends to do.
If Dalager had not taken the action, Lenduit and another, Newport Beach, California, company known as Lendterra could have initiated it. As a second mortgage holder, Dalager could have lost the $389,956.21 owed him by Minnesota Parks, according to his attorney.
Lendterra had started to manage the park in January. Kluver said that he and his client were initially surprised that a lending company would manage a mobile home park. He said they subsequently learned that Lendterra held a 51 percent ownership interest in Minnesota Parks LLC.
Kluver said he has not been able to find the legal connections between Lenduit, Lendterra and Kramer. He believes they are working together.
Dalager’s goal at this point is to pay off the first mortgage so that he can own the property free and clear again, said Kluver.
He said it has been “heartbreaking” to Dalager to see what has happened to the park and its tenants. Many of the tenants are financially disadvantaged to begin with, Kluver said, and they have “taken it on the chin.”
Dalager is confident of getting it all turned around, and made right, his attorney added.
There remain issues yet to be decided by the court. The biggest one is this: Many of the Chippewa Terrace tenants “purchased” their trailers as their new landlord had required last fall.
The trailers were “sold” to the tenants when Minnesota Parks and Kramer did not have the titles to them. Dalager had placed 26 titles in an escrow account, where they remain. His priority is to see that the titles are provided to those who paid for them, said Kluver.
Kluver said he does not know how the company or manager could have sold the trailers when neither had the titles in their possession. He does not know if either were licensed to sell the homes, either.
He and his client are also concerned about the rent payments made by tenants from January until the receivership was created in May. It’s not clear who has or received that money, Kluver explained.
Residents had discussed the possibility of forming a tenants association when they met with attorney Adam Fleischman with Mid-Minnesota Legal Aid at the meeting arranged by Polman and McGraw. Fleischman said an association was not created. He noted that the current receivership will provide some of the protections the tenants had sought.
The attorney assisted some tenants who pursued litigation of their own against Kramer and Minnesota Parks. He said his office also shared their information on the park and the complaints of its tenants to the Minnesota Attorney General’s office.