Attorney General Ellison prevails at trial in lawsuit over predatory contract for deed scheme

Jury finds Chadwick Banken violated Minnesota Human Rights Act by targeting Muslim homebuyers in his contract for deed scheme

Jury also found Banken liable for violating numerous other state laws; judge to rule on violations at later date

June 23, 2026 (SAINT PAUL) — Yesterday afternoon, a jury found Chadwick Banken liable for violating the Minnesota Human Rights Act by targeting Muslim homebuyers in his deceptive and unlawful contract for deed scheme following a 9-day trial led by the Office of Minnesota Attorney General Keith Ellison. The remedies Banken will face, including the restitution he owes the victims of his scheme, will be determined at a future hearing.

The jury also found Banken found liable for violating the Consumer Financial Protection Act, the Prevention of Consumer Fraud Act, and the Uniform Deceptive Trade Practices Act. Unlike the jury’s verdict around the Minnesota Human Rights Act, these other findings are advisory and will ultimately be determined by the court. The court will review the jury’s recommendations when it rules on the other counts at a later date. The trial follows the filing of a lawsuit filed by Attorney General Ellison against Banken on May 14, 2024 alleging unlawful behavior in his real estate transactions.

At trial, Attorney General Ellison’s office demonstrated that Minnesota realtor Chadwick Banken and several companies owned by Banken offered contracts for deed with egregiously unfair terms, indifferent to whether or not buyers could afford the homes being sold at significant markups. Banken’s scheme forced many would-be purchasers to walk away from their attempted home purchase with no home and none of the payments they made towards purchasing a home. Banken was able to pocket those payments, then turn around and sell those homes to other prospective buyers with the same unfair terms: the “slow flip.” Attorney General Ellison’s Office also demonstrated at trial that Banken specifically targeted the Muslim community in his marketing and offered significantly worse terms for Muslim purchasers than for other purchasers.

"Buying a home is often the biggest and most significant purchase any of us makes, and Chadwick Banken set homebuyers up to fail so he could profit,” said Attorney General Ellison. “I am extremely pleased that we were able to hold Banken accountable at trial for the predatory and unlawful scheme he ran, and for his disgraceful targeting of Muslim homebuyers. As long as I’m Attorney General, I will do everything in my power to protect the pocketbooks of Minnesotans everywhere and to stand up to religious discrimination wherever I find it.”

What is a contract for deed? 

A contract for deed is real estate transaction where the buyer makes payments directly to the seller, rather than going through a third-party lender. The seller retains the legal right to the property until the final payments is made but allows the buyer to live in the property while they are making payments. This can unfortunately combine all the responsibilities of homeownership with all the disadvantages of renting, while offering the benefits of neither. Contracts for deed are typically used by homebuyers with poor credit that prevents them from obtaining a traditional loan, or by homebuyers whose religion contains prohibitions against interest-based transactions. In Minnesota, some Muslim homebuyers adhere to tenets of Islamic law that forbid them from engaging in such transactions.

Banken’s scheme

Banken’s scheme begins by requiring very large down payments for homes with dramatically inflated prices, meaning that on day one, the purchasers are immediately underwater and unable to refinance out of these loans (even if their religious beliefs do not prohibit them from obtaining a mortgage). Banken’s next step is to require very large balloon payments at the end of the very short term of the loan to ensure that purchasers are unlikely to pay off the contract. If the purchaser misses a single payment for the duration of the loan, including the large balloon payment at the end, Banken and his companies can and do cancel the contract, which forces the purchaser to walk away from the home and lose every dollar they previously paid towards the home. This allows the Banken to churn the properties and flip them again and again — the “slow flip.” As part of the “slow flip”, Banken deliberately hid the egregious and unfair terms buried in his contracts.

Discrimination against Muslim homebuyers

Furthermore, Banken and his companies prey on Muslim purchasers by selling them homes on grossly unfair terms designed to lead to them defaulting on the transaction. Some in the Muslim community adhere to tenets of Islamic law that forbid them from engaging in interest-based transactions. Banken specifically markets to this community and offer them worse terms in their contracts: Defendants’ Islamic law-specific contracts have higher sales prices, higher down payments, and higher monthly payments than contracts marketed to non-Muslim purchasers.

At trial, a jury of Banken’s peers found him liable for violating the Minnesota Human Rights Act, which prohibits discrimination “against any person or group of persons because of . . . religion . . . in the terms, conditions or privileges of the sale, rental or lease of any real property.”

Attorney General Ellison encourages Minnesotans to submit complaints about predatory practices in the real estate industry by using a form on the Attorney General’s website. Minnesotans can also call the Office at (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).

More information about contracts for deed and the pitfalls of them can be found here.