By: Tia Politi, ORHA President
August, 2023
Effective August 25th, 2023, Housing Providers with rental units inside the urban growth boundary of the City of Eugene are subject to new regulations. The updated code can be viewed at this link: https://coeapps.eugene-or.gov/cmoweblink/0/edoc/3651002/Ord.%2020694.pdf.
The new regulations encompass changes to allowable security deposits, screening processes, rent increases and tenancy termination and provide for relocation payments of two months’ periodic rent if you terminate a tenancy without cause or for a Qualifying Landlord Reason. It also extends the notice period for no-cause terminations from 30 to 90 days.
Security Deposits
Eugene Housing Providers may charge a security deposit equal to no more than two months’ rent, with two exceptions. One exception is for Housing Providers who choose to rent to an applicant they could have denied due to risk factors identified in ORS 90.304, allowing Housing Providers to increase the security deposit to three months’ rent. You may also charge an additional deposit for an agreed-upon modification of the terms and conditions of the agreement for a pet or other cause if the additional security deposit relates to the modification. If you charge this additional amount for the reasons cited above, you must give the tenant up to three months to pay the increased deposit.
Take-Away: If you decide to take a chance on an unqualified applicant or if you agree to a material modification to their rental agreement, you may charge an additional security deposit equal to one months’ rent to address that change and/or mitigate your risk.
ORS 90.304 states that a Housing Provider can deny an application based on:
(a) Rental information, including:
(A) Negative or insufficient reports from references or other sources.
(B) An unacceptable or insufficient rental history, such as the lack of a reference from a prior landlord.
(C) A prior action for possession under ORS 105.105 to 105.168 that resulted in a general judgment for the plaintiff or an action for possession that has not yet resulted in dismissal or general judgment.
(D) Inability to verify information regarding a rental history.
(b) Criminal records, including:
(A) An unacceptable criminal history.
(B) Inability to verify information regarding criminal history.
(c) Financial information, including:
(A) Insufficient income.
(B) Negative information provided by a consumer credit reporting agency.(C) Inability to verify information regarding credit history.
(d) Failure to meet other written screening or admission criteria.
(e) The dwelling unit has already been rented.
Remember that under SB 282, evictions or money owed to a prior Housing Provider from a tenancy that terminated during the COVID-19 Protected Period (April 1, 2020 – February 28, 2022) cannot be considered when evaluating an applicant until after January 2, 2028. (SB 291)
Screening – First Come, First Served
If you publicly advertise a rental unit in Eugene, your ad must specify the date and time you will begin accepting applications and the dates of your “open application period.” Open application period is defined as “The period of time during which a landlord will accept rental housing applications for a publicly advertised dwelling unit.” You get to decide what period that is – 48 hours, 72 hours, one week?
You must also include information in the ad regarding an applicant’s right to request more time to ensure that they have “meaningful access” to compete for the dwelling unit. Meaningful access is defined as, “The ability of a person with limited English language proficiency to use or obtain language assistance services or resources to understand and communicate effectively, including but not limited to translation or interpretation services.” If a limited-English proficiency applicant requests additional time and if they submit their completed application within 24 hours of their request, the date and time of the request will serve as the date and time of receipt of the application for determining the order in which applications are received.
Here’s one possible statement to consider including: “Applications will be accepted between September 2 - 5, 2023. If you are an applicant with limited English proficiency, you are entitled to submit a request for an additional 24 hours to provide you with more time to seek language assistance services for the purpose of complying with the Housing Provider’s screening and application requirements.”
Under state law, if you assess an applicant screening charge, you are required to notify the applicant of their position in line, but not required to if you don’t charge screening fees. However, the Eugene Code requires that regardless of whether you assess a charge for screening, you must provide that information if the applicant requests it. Also, regardless of whether you assess an applicant screening charge, you must digitally or manually record the date and time of receipt of each application received during the open application period and while you may simultaneously screen multiple applications. You must accept, conditionally accept, or deny applications in the order of receipt.
You are required to offer the unit to the first qualified applicant who applies in the order indicated above, and if that applicant does not accept the offer to rent within 48 hours of the time the offer is made, you may move on to the next applicant. If a prospective renter applies prior to the open application period, their application is considered received eight hours after the start of that open application period.
What does it mean to accept an offer to rent? The ordinance does not say, but to my mind, accepting an offer to rent would mean either the Resident pays all funds due and takes possession of the dwelling unit if it’s move-in ready, or paying a deposit-to-hold and signing the Deposit-to-Hold Agreement if it’s not, thereby obligating themselves to rent at some point in the future. In any event, you must provide 48 hours for them to accept or decline your offer before moving on.
You may refuse to process applications under the following conditions:
1. The application is materially incomplete.
2. The application has been submitted by an applicant who has violated a rental agreement with the Housing Provider three or more times during the 12-month period preceding the date of the application, and the Housing Provider can provide documentation of the violations.
The following are exempt from the new rules about screening under the Eugene Rental Housing Code:
1. Affordable housing providers (Typically, agencies who provide HUD-financed housing such as Homes for Good, ShelterCare, or St. Vinnie’s).
2. A dwelling unit occupied by the Housing Provider as their principal residence.
3. A unit of middle housing when the Housing Provider’s principal residence is another unit of middle housing on the same lot or parcel.
4. An accessory dwelling unit located on the same lot or parcel as the Housing Provider’s principal residence.
5. A dwelling unit that will be shared with an existing tenant who has a separate rental agreement for the dwelling unit (i.e., renting individual rooms).
6. A dwelling unit not advertised to the general public.
RELOCATION ASSISTANCE – CITY & STATE
Eugene Code Relocation Assistance
On or after August 25, 2023, you must provide a minimum of 90 days’ written notice to terminate tenancy for no cause or for lease non-renewal given in the first year. The termination notice must include information about the amount of relocation assistance for which the Resident is eligible with a description of their rights and obligations.
Unless you are exempt, you must pay the Resident two month’s periodic rent if you terminate the tenancy for no cause in the first year, or for a Qualifying Landlord Reason at any time, and the relocation assistance must be paid within 45 days of delivery of the termination notice. If the Resident remains in the dwelling unit after the date of termination without the Housing Provider’s permission, the Resident must immediately repay the relocation assistance.
A Resident who receives relocation assistance for a no-cause of Qualifying Landlord Reason termination of tenancy must, within 45 days of the date of receipt of the assistance, provide you with written notice of termination of the rental agreement and vacate the unit by or before that termination date or repay the relocation assistance.
The City of Eugene is creating the forms and the City Manager is developing rules to implement these new requirements. We are asking for and hope to get clarity on whether the information needs to be in the body of the notice itself or can be attached to the notice of termination.
State Relocation Assistance
You may also be required to pay a relocation assistance under state law if you hold an ownership interest in more than four residential rental units in Oregon and are serving notice of termination for a Qualifying Landlord Reason. If you are required to pay the state assistance of one month’s rent, that assistance must be provided with the notice, but you can reduce the amount you pay required by the City Code by the amount of the state assistance you paid with your notice. This results in two separate payments delivered at different times, with a right to recover only one of these if the Resident does not vacate.
Lease Renewal in the First Year
In a fixed-term lease with a specified ending date that falls within the first year of occupancy, unless exempt as outlined below, you must follow this process:
1. At least 90 days prior to the specified ending date of the fixed term, provide the Resident with a written statement informing them of their right to receive relocation assistance and the means for eligibility.
2. For the Resident to be eligible to receive relocation assistance, the Resident must, at least 60 days prior to the specified ending date of the fixed term provide you with written notice of their desire to renew the fixed term agreement.
3. Within 30 days of the written notice from the Resident, you must either:
(1) Provide the Resident with written notice that you are declining to renew the lease and pay the Resident two month’s rent as a relocation assistance or;
(2) Provide the Resident with written notice that you agree to renew the lease. There is no specified term stated for length of lease renewal, but the lease renewal terms may not be a “substantial change” from the existing terms.
a. Substantial change means: A change of terms from those included in a prior rental agreement between a Housing Provider and Resident that substantially disadvantages the Resident, and the Housing Provider does not provide for a commensurate decrease in rent. Examples of substantial changes to a rental agreement include but are not limited to: Resident responsibility for payment of utilities previously included in the monthly rent; Resident responsibility for payment for a parking spot previously included in the monthly rent; Housing Provider no longer allowing pets to occupy the dwelling unit; reduction of space available for Resident use; reduction of amenities available for Resident use; and removal of furnishings from furnished units.
4. A Resident who has received relocation assistance and either agrees to the Housing Provider’s conditions of renewal or remains in the dwelling unit after you decline to renew, must immediately repay the relocation assistance.
Rent increases
Unless a Housing Provider is exempt as outlined below, you are subject to payment of relocation assistance if you increase the Resident’s rent by the maximum allowable percentage in a specific year. When raising rent, the 90-day notice must state the amount of the new rent, the dollar amount by which
the rent will increase, the percentage of the increase, and the date the increase will be effective. The notice must also specify the amount of relocation assistance for which the Resident is eligible and include a description of the Resident’s rights and obligations.
A Resident who receives notice of rent increase for the maximum allowable amount may, within 30 days of the date of the notice, request in writing for the Housing Provider to pay relocation assistance. If the Resident fails to request it within that timeframe, they are not eligible for assistance, may not request payment, and the rent increase amount will stand. If the Resident requests relocation assistance within the 30-day period, the Housing Provider must pay the Resident the required assistance of two-month’s rent at least 45 days prior to the date of the rent increase.
A Resident who receives relocation assistance for a maximum rent increase, must within 45 days of the date of receipt of the assistance, either: (1) provide you with written notice of termination of the rental agreement and vacate the unit; or (2) repay the relocation assistance and remain in the unit, subject to the increased rent.
Take Away: If you don’t intend to raise rent to the maximum, you don’t have to provide the information on relocation assistance. To avoid that payment, stay below the rent cap.
Please note that while under state law, properties built within the past 15 years are exempt from the rent cap, though properties subject to the Eugene Code are not exempt for that reason.
Relocation assistance exemptions
1. Week-to-week tenancies.
2. Occupancy in the same dwelling unit where the Housing Provider has occupied the unit as their primary residence for at least six months prior to service of notice to terminate.
3. Residents that occupy one unit of middle housing where the Housing Provider’s primary residence is another unit of middle housing on the same lot or parcel and the Housing Provider has occupied the unit as their primary residence for at least six months prior to service of notice to terminate.
4. Residents that occupy an accessory dwelling unit (ADU) and the Housing Provider’s primary residence is on the same lot or parcel and the Housing Provider has occupied the unit as their primary residence for at least six months prior to service of notice to terminate.
5. Housing Providers who temporarily rent out their primary residence during their absence of not more than three (3) years and the Housing Provider returns and reoccupies the unit as their primary residence within that time.
6. Housing Providers who temporarily rent out their primary residence due to deployment in the armed forces and the Housing Provider returns and reoccupies the unit as their primary residence.
7. Units of affordable housing.
8. A dwelling unit that is subject to and in compliance with the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970.
9. A dwelling unit rendered immediately uninhabitable not due to the action or inaction of a Housing Provider or Resident.
10. A dwelling unit rented for less than six (6) months where the Housing Provider will be demolishing the unit and has provided the Resident with verification of submission of a demolition permit prior to the execution of the rental agreement.
11. A unit rented under a fixed-term lease where the Housing Provider’s intent is to sell or permanently convert the dwelling unit to a use other than as a dwelling unit and is a term of the executed rental agreement.
12. And one final exemption for units where the tenancy was initiated prior to August 25, 2023, but only for specific types of tenancies. Check out Section 7 of the ordinance to see if you qualify.
Qualification exemption process
1. For exemptions claimed under 1, 5, 6, 7, 10 & 11 above, no later than the time of execution of the rental agreement, you must provide each Resident who is a party to the rental agreement with written notice that the tenancy is exempt from relocation assistance.
2. For exemptions claimed under 2, 3 & 4 above, where the Housing Provider is living in the dwelling unit or on the same lot or parcel of land at the time of execution of the rental agreement, no later than the time of execution of the rental agreement you must provide each Resident with written notice that the tenancy is exempt from relocation assistance.
3. For exemptions claimed under 2, 3 & 4, if you move into the dwelling unit or onto the lot or parcel during the term of the rental agreement, within 30 days of occupancy, you must provide each Resident with written notice that the tenancy will be exempt from relocation assistance once you have occupied the unit as your principal residence for at least six months. The notice requirement applies to you if you move into the unit or onto the lot or parcel on or after September 1, 2023.
4. For exemption 12, under Section 7 of the ordinance where the rental agreement was executed prior to August 25, 2023, under very limited types of tenancies, you must provide the written notification to the Resident within 30 days of August 25th.
5. Except for affordable housing providers, who are not required to file exemptions, within 30 days of the date you provide the Resident with the notice of exemption you must submit to the City a notice of relocation assistance exemption.
Relocation Assistance Reporting
Unless you are exempt from payment of relocation assistance, you must report your relocation assistance payment to the City within 60 days of paying the Resident. The City is currently working on a form for this.
Termination of Tenancy Reporting to the City
You must report all termination notices to the City that result in a termination of tenancy within 30 days of the notice, except for week-to-week tenancies. So, I think that means any notice from you to them where the Resident vacates the unit in response to the notice or by legal eviction, except when you terminate week-to-week tenancies. Your report to the City must include a copy of the termination notice served. The City has created an online form. If you are unable to access the form through the ERHC website, Housing Navigator Amy Cameron said to come in to the office during business hours and staff can assist. The code office is located at 99 W. 10th Avenue, Eugene, OR 97401 - 541-682-5383.
A Resident who gives notice to vacate and moves out or otherwise abandons the unit when the Housing Provider has not served a termination notice is not a reportable event.
The Code has also been expanded to include the changes listed above in the processing complaints and created a painful financial penalty for Housing Providers who fail to comply.
Penalties
A Housing Provider that violates the relocation assistance provisions for rent increases and terminations is liable to an individual eligible for relocation assistance in an amount equal to three months’ rent as well as actual damages, relocation assistance, and reasonable attorney assistance and costs. That means that any Resident (not just household of residents as a group) claiming to be aggrieved by a Housing Provider’s violation has an individual cause for action in any court of competent jurisdiction for damages and any other remedies as may be appropriate under law.
Take Away: There’s a lot of steps to do just right and big-time monetary penalties if you don’t. Get professional advice so you don’t stumble…
Forms
The City is preparing to launch the following forms:
1. Tenant notice of rights and obligations for relocation assistance.
2. Landlord relocation assistance exemption reporting to the City.
3. Housing Provider termination/eviction reporting to the City.
4. Housing Provider relocation assistance payment reporting to the City.
We are evaluating our forms to see what changes we may need to make and are working on a Landlord Exemption Notification form and a modification of form O3, Notice of Lease Renewal to provide the 90-day notice in a first-year lease with a specified ending date that falls within the year. Call the Helpline or an attorney for guidance in the meantime.
The good news
None of these restrictions apply to for-cause notices.
I’ve been saying for years, we’re all going to have to get good at holding residents accountable for their misbehavior because the easy route of no-cause notices will likely continue to become more restrictive. That means no more lazy-landlording. You must inspect; you must act on breach of contract; you must avoid waiver; you must learn how to prepare and serve legal notices; and you must stop renting to people because you feel sorry for them or are trying to be nice. Remember, No good deed goes unpunished. This is a business, tighten up your standards people and remember: even with all the increasing regulatory load we’re experiencing, if you have a good property and good people in that property, rental property ownership is still one of the best ways to build financial stability and generational wealth over time. So, stop whining and start learning!
This column offers general suggestions only and is no substitute for professional legal counsel. Please consult an attorney for advice related to your specific situation.
Rev 8/2023
