While it may seem clear on first reading, the recent change in statute regarding rent increases is leaving even the attorneys scratching their heads.
One issue that seems clear is that a lease renewal is exempt from the rent increases that apply to month-to-month residencies. A new lease or lease renewal is a contract with its own terms that are not affected by this change in statute.
It is also clear that you may increase the rent in a month-to-month tenancy with a 90-day written notice, as long as it doesn’t take effect prior to the end of that first year.
What is not so clear is what happens when by its terms, a lease expires and converts to a month-to-month tenancy. After much discussion and attorney consultation, the Oregon Rental Housing Association, recommends that the most conservative and safest interpretation is to count the first year of tenancy as starting on the day the property transitions to a month-to-month tenancy. After that clock begins, you may lawfully serve a 90-day notice of rent increase so long as it will not be effective prior to the end of the first year of the tenancy (from the day it converted to a MTM).
There is uncertainty and ambiguity regarding this law change, and on first look it may appear that “first year of tenancy” can include the term of a lease; however, this is a potentially risky move and we don’t want you to take chances that could hurt you in the courtroom, nor do we want any of you to be the test case for this new law. Look for more answers in the coming months and be assured this will be addressed and clarified in the next legislative session. Call the Helpline for assistance if you have any questions about your specific situation.