ORHA News

May 19, 2020

The state has provided $8.5M in rent assistance to help struggling Oregonians impacted by COVID-19. That money was allocated to the following organizations:

ACCESS, Inc.
(541) 779-6691
$459,585

Lane County Human Services Commission (LCHHS)
(541) 682-3798
$929,025

Community Action (CAO)
(503) 648-6646
$764,957

Mid-Columbia Community Action Council (MCCAC)
(541) 298-5131
$140,357

Community Action Program of East Central Oregon (CAPECO)
(800) 752-1139
$186,271

Mid-Willamette Valley Community Action Agency (MWVCAA)
(503) 585-6232
$771,012

Community Action Team, Inc. (CAT)
(503) 397-3511
$299,610

Multnomah County Department of Human Services
(503) 988-7453
$1,639,002

Community Connection of Northeast Oregon (CCNO)
(541) 963-3186
$162,250.00

Neighborhood Impact (NIMPACT)
(541) 548-2380
$438,696

Clackamas County Social Services Department (CCSSD)
(503) 655-8640
$457,097

Oregon Human Development Corporation (OHDC)
(855) 215-6158
$455,813

Community in Action (CINA)
(541) 889-1060
$96,070

Oregon Coast Community Action (ORCCA)
(541) 435-7080
$233,165

Community Service Consortium (CSC)
(541) 752-1010
$583,383

United Community Action Network (UCAN)
(541) 672-5392
$489,779

Klamath/Lake Community Action Services (KLCAS)
(541) 882-3500
$196,738

Yamhill Community Action Partnership (YCAP)
(503) 472-0457
$197,192

April 23, 2020

The Interim Legislative Emergency Board just passed $8.5 million for rental assistance due to impact of Covid 19. It looks like $12 million at first blush, but $3.5 of that went for safe shelter alternatives.

Staff summary:

By: Brian Cox, Attorney at Law
April 15, 2020

As the effects of the COVID-19 pandemic continue to unfold in Oregon, residential and commercial landlords seeking to regain possession of their rental properties are currently faced with a myriad of restrictions from several vectors, radically changing their ‘pre-pandemic’ way of doing things.

Rationale: There are two primary reasons driving these actions: limiting the spread of the coronavirus by limiting evictions or otherwise ‘de-housing’ people in order to avoid greater COVID-19 exposure; and, the pragmatic recognition that the current extraordinary health needs leading to the closure of restaurants, schools, and all ‘non-essential’ businesses will cause a wide swath of our population to lose their jobs and businesses in order for everyone to ‘shelter in place’ and care for homebound family members, leaving many Oregonians unable to pay their rent through no fault of their own.

Executive Orders: Under Governor Brown’s current Executive Orders, landlords may not issue termination notices or file, prosecute, or execute ‘economic evictions’ for non-payment of rent, utilities, service charges, late fees, or other charges, without regard to whether the non-payment is the result of the COVID-19 epidemic. The Executive Orders also suspend the imposition of late fees and prohibit law enforcement from serving or enforcing evictions of any kind. Landlords are also prohibited from issuing ‘no-cause’ or ‘landlord-cause’ termination notices or evictions: the former happens during the first year of tenancy or with owner occupied two-unit lots (typically duplexes or ‘mother-in-law’ units); the latter occur when a landlord wants to move in or move a family member into the rental, a buyer wants to live in the rental, the rental needs major renovation work, or the rental is being converted to ‘non-rental’ purposes. Unable to remove their tenants, rental property sellers are unable to deliver possession of the property for an indeterminate amount of time, causing many real estate transactions to fail.

Chief Justice Orders: Under Chief Justice Walters’ current orders, all stages of eviction proceedings are automatically postponed until after May 31st, with the caveat that evictions involving domestic violence, most situations giving rise to a 24-hour termination notice, and similar ‘high need’ eviction cases may proceed by seeking leave of court, following a process to be developed by each court (though trying to set and advance these cases may be difficult and/or follow uncertain timelines). Residential and commercial evictions may still be filed – though evictions for non-payment or ‘no cause’ or ‘landlord-cause’ evictions are prohibited (violation is now a Class “C” Misdemeanor), and such ‘non-compliant’ evictions may be accepted or rejected at filing, depending on local court practice. When an eviction is filed, the first appearance setting and service of summons and complaint will all occur according to statute, only the FED summons and complaint will be accompanied by a multi-language notice advising the parties the first appearance date is automatically postponed to a later date and will be followed by a future court notice informing them of the new hearing date (notice below. Evictions that do proceed or that later proceed are expected to utilize the court’s newly-developed rules for court appearances, including efiling documents and exhibits and remote appearances by parties, witnesses and lawyers where possible.

Federal Action: While federal law does not directly prohibit all evictions, portions of the CARES Act require all landlords with federally-backed mortgages, including those covered by HUD, USDA, FHA, VA, Fannie Mae and Freddie Mac, to forgo evicting their tenants by placing a 60-day moratorium (beginning March 18th), and providing those landlords with various forms of relief, including a 180-day loan forbearance (which can be extended another 180 days at the borrower’s request). The Act allows multifamily housing owners with a federally-backed mortgage to request a forbearance for up to 30 days (which can be extended another 60 days at the borrower’s request), on the condition that they agree not to evict tenants or charge late fees. The Act also institutes a moratorium on filings for evictions for renters in homes covered by a federally-backed mortgage for 120 days of enactment. The Act provides a temporary moratorium on evictions for most residents of federally subsidized apartments, including those supported by HUD, USDA or Treasury (Low Income Housing Tax Credit developments).

Local Ordinance: Multnomah County, Portland, Clackamas County, Gresham and Hillsboro have each imposed their own form of moratorium on evictions, and residential and commercial property owners would be wise to seek current information specific to their jurisdiction before proceeding.

Oregon Legislature: In short, the Oregon legislature has yet to take any action regarding the pandemic.

What is a residential or commercial landlord to do? With access to the courts effectively prohibited, at this point for months, many have asked what they should do considering the constant barrage of bad news. First, opening lines of communications and making payment arrangements and/or accepting partial payments from your tenants is likely a good option, and in some cases, may be the only payment you receive. Next, keep in mind that the COVID-19 state moratorium does not apply to conduct-based notices or evictions. If you have truly troublesome or dangerous tenants, your remedies are still intact – just delayed for now in many situations.  Finally, remember that the moratorium creates a payment deferral, not a payment forgiveness. Governor Brown’s executive order was explicitly clear that all amounts owed – except late fees – remain due and owing.

In this writer’s opinion – Neither tenants nor property owners should have to stand alone bearing the social or economic burden of the COVID-19 Pandemic. Perhaps the ‘best’ economically- and socially-rational way for the federal and state governments to preserve housing stability for families impacted by the COVID-19 crisis and struggling to cover housing expenses is by creating emergency rental assistance programs through a drastic short-term expansion of the Rental Assistance Vouchers program or similar programs. This should be the first and highest priority with regard to the allocation of funds provided to Oregon through the Federal CARES Act – immediately infusing cash for rent payments into the hands of renters and landlords. The eviction moratorium can also be better tailored to safeguard owners’ ability to effectively affect repairs and manage their communities, while allowing more types of housing providers access to mortgage forbearance, ensuring fairness and flexibility in its terms, and by providing financial assistance for property-level financial obligations such as property taxes, utilities or insurance payments and by extending credit to multifamily mortgage servicers, small landlords and multifamily businesses using the Small Business Administration’s Paycheck Protection Program.

We are in this together, and together we are stronger.

Be Well,
Brian Cox

This information is current as of April 15th, 2020. Time and answers are changing rapidly, and all readers are encouraged to seek the most current and reliable information available.

* * *Court notice accompanying FED Summons * * *

NOTICE TO LANDLORDS FILING FED (EVICTION) CASES

On April 1, 2020, Governor Kate Brown issued Executive Order 20-13 which, among other things, prohibits the filing of certain eviction cases. The Executive Order was effective immediately and remains in effect for 90 days unless extended or terminated earlier by the Governor.

• A violation of Executive Order 20-13 could subject you to criminal penalties including a Class C Misdemeanor punishable by a fine of up to $1,250.00 and up to 30 days in jail.

• If you file your complaint, your filing fee will not be refunded, even if it is subject to the Executive Order.

• You should review the full Executive Order to determine if it applies to the complaint you are filing. Available at: https://www.oregon.gov/gov/admin/pages/eo_20-13.aspx.

• If you have questions, you may want to contact an attorney.

The following are excerpts from Governor Brown’s Executive Order 20-13:

“1. Residential Tenancies.

a. During this moratorium, landlords of residential properties in Oregon shall not, for reason of nonpayment as defined in paragraph 1(b) of this Executive Order, terminate any tenant’s rental agreement; take any action, judicial or otherwise, relating to residential evictions pursuant to or arising under ORS 105.105 through 105.168, including, without limitation, filing, serving, delivering or acting on any notice, order or writ of termination or the equivalent; or otherwise interfere in any way with such tenant’s right to possession of the tenant’s dwelling unit.

b. The term “nonpayment” as used in paragraph 1 of this Executive Order means any nonpayment of rent, late charges, utility charges, or any other service charge or fee, as described in ORS 90.392(2)(a) or (c), 90.394, or 90.630(1)(d) or (10), or any termination without cause under ORS 90.427. All other terms used in paragraph 1 of this Executive Order shall have the same meanings as set forth in ORS chapters 90 or 105.

c. Nothing in paragraph 1 of this Executive Order relieves a residential tenant’s obligation to pay rent, utility charges, or any other service charges or fees, except for late charges or other penalties arising from nonpayment which are specifically waived by and during this moratorium. Additionally, paragraph 1 of this Executive Order does not apply to the termination of residential rental agreements for causes other than nonpayment.

d. * * *

2. Non-Residential Tenancies.

a. During this moratorium, landlords of non-residential properties in Oregon shall not, for reason of nonpayment as defined in paragraph 2(b) of this Executive Order, terminate any tenant’s lease; take any action, judicial or otherwise, relating to non-residential evictions pursuant to or arising under ORS 105.105 through 105.168, including, without limitation, filing, serving, delivering or acting on any notice, order or writ of termination or the equivalent; or otherwise interfere with such tenant’s right to possession of the leased premises.

b. The term “nonpayment” as used in paragraph 2 of this Executive Order means nonpayment of rent, late charges, utility charges, or any other service charge or fee, as described in the lease or in ORS 91.090, 91.210 or 91.220. All other terms used in paragraph 2 of this Executive Order shall have the same meanings as set forth in ORS chapters 91 or 105.

c. Paragraph 2 of this Executive Order shall apply if a tenant provides the landlord, within 30 calendar days of unpaid rent being due, with documentation or other evidence that nonpayment is caused by, in whole or in part, directly or indirectly, the COVID-19 pandemic. Acceptable documentation or other evidence includes, without limitation, proof of loss of income due to any governmental restrictions imposed to mitigate the spread of COVID-19.

d. * * *

~ ~ ~ ~ ~

Governor Brown’s most recent executive order effective April 1st, expands the moratorium on residential and non-residential evictions for non-payment of rent. The previous executive order only prohibited law enforcement from serving or doing anything to enforce a FED judgment for non-payment. We originally thought that the Governor’s executive order would include a requirement for tenants to provide objective verification that their loss of income or inability to pay rent was directly tied to Covid-19, but unfortunately, that is not the case.

This new order extends to the landlords themselves, prohibiting landlords from terminating residential and non-residential rental agreements for non-payment (read that “giving a termination notice for non-payment”), filing evictions, doing a commercial ‘self-help’ lock-out, or taking any further steps to terminate or dispossess a residential or commercial tenancy or otherwise proceed in an eviction for non-payment. Be aware that Governor Brown’s executive order also creates a penalty - a landlord violating the emergency order could be found guilty of a Class C misdemeanor, punishable by up to 30 days in jail, a fine of up to $1250, or both. Again, this restriction and penalty applies to only non-payment situations. Landlords with federally-backed financing should also be wary of losing their qualification for a loan payment deferral that occurs if the landlord evicts tenants during the Coronavirus emergency.

Governor Brown’s revised order expressly confirms that tenants still owe all of their contractual obligations, excepting post-order late fees (which are now waived). Landlords serving other types of termination notices are allowed to issue those notices and file those evictions (at least for now), just be aware that all first appearances will be reset to a date after June 1st for all evictions except those based on 24-hour notices or domestic violence. Evictions based on 24-hour notices or involving domestic violence will be allowed to proceed on a limited basis, subject to procedures to be developed by each Circuit court for expediting and hearing those cases. Landlords with federally-backed financing should be wary of losing their qualification for payment deferral that occurs if the landlord evicts tenants during the Coronavirus emergency.

Dear ORHA members,

There is an emergency committee that has been formed to address the impacts of Covid-19 on the rental housing industry. They are receiving comments until 5 p.m. Monday, March 23^rd. We are urging you to send your comments to the committee at jscvr.exhibits@oregonlegislature.gov no later than Monday. This is our opportunity to influence the discussion about solutions that will benefit tenants and us, the people who house them.

Below you will find the letter sent by ORHA leadership regarding our concerns. There may be other concerns we have not addressed or thought of, please feel free to mirror our concerns or combine them with your own, in a respectful, constructive way.

Sincerely,
The ORHA Board of Directors

To our valued members around the state,

We have reached a moment in the Covid-19 crisis, where your voices need to be heard regarding the plans for keeping people housed. To that end, we have created a list of talking points that you can use when providing encouragement to your local, county and state officials as they grapple with this unprecedented situation. We support direct rent assistance payments to landlords for the following reasons:

•        Disaster relief needs to be for both tenants and landlords to ensure that renters retain their housing and landlords can continue to operate. Direct payments to landlords will keep the supply chain functioning, including mortgages, insurance, maintenance, etc. This isn’t just about making sure that landlords get their money. Housing stability for our communities should be front and center during this crisis.
•        A moratorium on mortgage payments provides some relief, but it doesn’t provide income. Some landlords depend on their tenants’ rent payments for their main source of income for food, medicine and utilities; we don’t want to create a new category of people who need help.
•        Rental properties require maintenance. If landlords don’t have the money to pay for needed maintenance due to the crisis, they may face punitive damage awards for failure to maintain the unit.
•        As our government officials pour money into the economy to mitigate the short- and long-term impacts of this crisis, part of what needs to happen is for people to keep buying goods and services to lubricate the economy and minimize the damage we are facing. Direct payments to landlords for the tenants who need help will be a vital way to infuse funds in to the local economies.
•       Not all tenants need help. While many have been temporarily suspended from working, many are working from home, or have resources available to help them weather the storm. There needs to be some sort of needs test to determine whether the inability to pay rent is related to Covid-19 or not. Tenants should have to provide some sort of documentation from their employer that there is no work available, and that unemployment benefits for the household do not meet their needs for food, shelter and utilities. Gathering this data could also provide much needed information to the state regarding impacted communities. This could help inform future planning for unexpected crises that will undoubtedly come our way.
•       Other pressing issues for some landlords are current pending notices for bad behavior by tenants, or termination notices issued prior to this time. Can these evictions still be processed and executed, or do landlords have to sit tight while the tenant continues to damage the property, disturb the quiet enjoyment of the neighbors, and even commit criminal acts while being protected from eviction? Also, under current law, once a notice of termination has expired, if the landlord accepts rent for any period beyond the termination date, they waive their right to terminate on that notice. With the implementation of SB 608 and the subsequent restrictions on termination of tenancy after the first year, a landlord could get into a real bind. Can waiver rules be temporarily suspended due to this crisis allowing landlords to accept rent, but still keep their notice valid?

These and other issues will deeply impact housing providers throughout the state and our nation, leading to possibly devastating impacts to rental owners and the people we house. We urge you to consider the unintended consequences of your decisions now and in the coming days and find a middle ground that takes these concerns into account.

Sincerely,

Sage Coleman, ORHA President

Jim Straub, ORHA Legislative Director

ORHA Board of Directors

The crisis set in motion by the spread of the Covid-19 virus is causing ripple effects throughout our communities. In many cases, we will all experience a significant reduction in income due to cancelled events, closed schools and facilities as we attempt to thwart the spread.

While the government is taking various forms of action to reduce the impact on citizens and the economy in general, such as waiving the waiting week for employees to file for unemployment, tenant advocates are pleading for understanding from landlords during this uncertain time.

If you are a landlord and have renters whose livelihoods are significantly impacted, and you are financially able to defer rent and waive late fees for a period of time, we are offering a Landlord and Tenant Deferment Agreement free on the Oregon Rental Housing Association website:  https://oregonrentalhousing.com/.

Using this method, you won’t be creating waiver regarding the Application of Tenant Payments – ORS 90.220 that requires landlords to apply any money received from the tenant to past month’s rent owing, then current month’s rent owing, etc. Many thanks to Eugene attorney Brian Cox for his generosity in creating this form for our use.

The crisis has already set in motion delays on eviction proceedings for at least a few weeks. Depending on how long this crisis goes on, the government may take further action. If we as a group can show that we’re being proactive and doing our best to help during this challenging time, the sense of urgency may wane, especially if the extreme measures being taken have the desired impact of slowing or stopping the spread of the virus so our lives can get back to our new normal.

It is our sincere hope that legislators understand that while some landlords have reserves, and can muddle through without rent from their tenants for a time, many private landlords are in the same boat as their tenants – working full time paycheck-to-paycheck, and out of work because of the virus.

Mass evictions help no one, and other ideas are being floated throughout the state and our nation to find solutions for this very temporary problem. Please do what you can, and we’ll do our best to keep you updated as the situation develops.

Sincerely,

Sage Coleman, ORHA President

Jim Straub, ORHA Legislative Director

ORHA Board of Directors

To download this Memo or the Form, Click the links below:

Memo - A Call to Oregon Landlords

By Tia Politi, Oregon Rental Housing Association Secretary
February 19, 2020

Landlord-Tenant law governs a lot between the relationship between rental owners and their customers, but how many know that there are state and federal laws that pose legal requirements on their conduct with tenants? In a nutshell, here’s the dos and don’ts:

Landlords shall:

1. Act reasonably
2. Act in good faith
3. Mitigate damages

Landlords shall not:

1. Discriminate
2. Retaliate
3. Evict without Due Process (Constructive Eviction)
4. Contract with Unconscionability

Let’s look at each of these concepts and how they impact housing providers.

Reasonableness
To act reasonably within the landlord/tenant relationship is often referred to as the reasonable person standard.

Wikipedia defines this as, “…the omission to do something which a reasonable person, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable person would not do…A reasonable person does not insist on always holding to the letter of the law, nor are they unduly strict, stern, or harsh. Rather, they strive to be gentle in their dealings with others, taking into consideration their circumstances. They are willing to listen to others and, when appropriate, to yield to their wishes and adjust their requirements…The care taken by a prudent person has always been the rule laid down.”

That’s a great definition. What would an uninvolved reasonably intelligent third party think of your words or actions? Do your words and actions fit the definition, or not? Sometimes people can get so entrenched in whatever their position is on a particular subject that they lose the ability to see the full picture and their behavior contributes to an escalation of a problem. I used to tell my children, it doesn’t matter what anyone else does, you are still required to behave properly and mind your manners.

There is no excuse in the adult world (or in a court of law) that will excuse your improper words or actions even if someone else’s behavior is abusive or out of control. You can’t get out of a speeding ticket by telling the officer that you were just keeping up with the speeder ahead of you, and the same is true for how landlords deal with residents. Objectivity can be a challenge for all of us and that’s probably why many faiths emphasize trying to see things from the other person’s point of view. Landlords who struggle with anger or extreme emotions in their daily lives should hire a property manager.

Good Faith
Good faith is the concept of honesty, truthfulness and trustworthiness, and is defined in ORS 90.100 (20) as, “…honesty in fact in the conduct of the transaction concerned.” Furthermore, ORS 90.130 imposes the obligation of good faith by landlords, “Every duty under this chapter and every act which must be performed as a condition precedent to the exercise of a right or remedy under this chapter imposes an obligation of good faith in its performance or enforcement.”

What does good faith look like? It looks like telling the truth, and not lying by omission in regards to something that can impact a resident. It creates a presumption that landlords will deal with tenants honestly and fairly, so as not to impact their rights to receive the benefits of a contract. It imposes the obligation to be fair, open and honest – regardless of the outcome. Anything a landlord does that could be considered misleading, dishonest or that takes advantage of a tenant’s lack of knowledge of their rights could be construed as acting in bad faith. Does that mean landlords have to educate tenants on their rights? No, but… taking advantage of, or benefitting from another’s ignorance isn’t really acting in good faith is it?

Discrimination
Discrimination means treating people who belong to a protected class differently than people who do not. Protected classes are:

• Federal – Race, Color, National Origin, Religion, Sex, Familial Status (families with children), and Disability;

• State of Oregon – Marital Status, Source of Income (including housing subsidies), Sexual Orientation, and Gender Identity.

• Some cities in Oregon have additional protected classes. Eugene, for example, has added protections for Type of Occupation, Ethnicity and Domestic Partnership.

• Active duty military and victims of domestic violence have protections under the law that can impact a landlord’s ability to refuse to rent a property, terminate a tenancy, or charge lease-break fees to a protected resident.

What actions by a landlord constitute discrimination? Denying an application, applying stricter screening criteria, misrepresenting available units, or requiring higher deposits based on a person’s membership in a protected class is discriminatory behavior. So is failing to take action against a resident in a multifamily complex who is targeting or persecuting another based on their membership in a protected class. It’s also against the law to terminate the tenancy of a victim of domestic violence, sexual assault or stalking, refuse to allow assistance animals for disabled residents, or refuse to rent to a single parent, among other examples.

Most landlords are pretty savvy about avoiding these kinds of actions, but many seemingly innocent decisions can be considered discriminatory when they result in creating disparate impacts on protected classes of residents. For private landlords that most often happens in the areas of advertising, screening and the use of house rules. Take care to scrupulously follow Fair Housing law in your rental business.

When advertising, avoid trouble by describing the property, not the kind of people you think should live there. When showing, it’s best practice to provide an application to anyone who indicates an interest in renting the property. And while you can certainly refuse to accept an incomplete application or set of applications, best not to refuse to accept a completed application to avoid any appearance of discrimination, regardless of whether or not you think the person will qualify. Everything you need to know about the applicant will be discovered during the screening process.

In the use of house rules, discrimination occurs when it has a disparate impact on residents in protected classes. This is the creation of artificial, arbitrary and unnecessary policies that erect barriers or have a discriminatory impact on members of protected classes, regardless of how they are applied. A well-meaning landlords’ policies may be “facially neutral,” in that they are applied equally to all, but it’s the disparity in outcomes and their impact on a specific protected class that creates the problem. HUD language prohibits policies that, “…predictably creates, increases, reinforces, or perpetuates segregated housing patterns of race, color, religion, sex, handicap, familial status, or national origin.” That doesn’t mean landlords can’t make rules, only that those rules must serve a substantial, legitimate, nondiscriminatory interest and that there is no other practice that would have a less discriminatory impact.

The concept of discrimination also applies to how a landlord imposes rules or occupancy limits. ORS 90.262 requires that when implementing rules on a tenancy, that the rules be fair, reasonable and non-discriminatory, and not be implemented so as to evade a landlord’s obligations. For occupancy standards, this statute provides that occupancy shall not be more restrictive than two per bedroom without good reason.

Retaliation
Retaliation is defined by landlord-tenant law as increasing rent, decreasing services, serving a notice of termination, or bringing or threatening to bring an action for possession after the tenant has done one or more of the following:

• Complained to, or expressed to the landlord in writing the intent to complain to a governmental agency charged with oversight for building, health or safety codes; mail delivery laws and regulations; or discrimination in rental housing.

• The tenant has made a complaint to the landlord that is related to the tenancy;
• Formed or joined a tenants' union;
• Testified against the landlord in any judicial, administrative or legislative proceeding;
• Successfully defended an FED (eviction) action brought by the landlord when the notice served by the landlord was defective or imperfect, or the timing of the notice was miscalculated; or

• Indicative of their intent to assert or invoke the protection of any right secured to tenants under any federal, state or local law.

There are exceptions to the use of the retaliation defense by a tenant in a courtroom:

• The complaints by the tenant were unreasonable in their timing or manner;
• The violation of housing codes were caused by the tenant;
• The tenant has defaulted on rent (unless they deposit full rent into court); or,
• Compliance with building codes requires the tenant to vacate.

Mitigation
ORS 90.125 specifies that either party to the rental transaction may recover monetary damages against the other as a remedy for action or inaction that results in a legitimate loss, but that the aggrieved party has the duty to mitigate those damages. Mitigation in law is the principle that a party who has suffered loss has to take reasonable action to minimize the amount of the loss suffered.

If a tenant signs a fixed-term lease for one year, but moves out and stops paying rent after a few months, the landlord may be able to sue for breach of contract, but the landlord must mitigate the tenant’s damages by making a reasonable attempt to find a replacement tenant.

If a water pipe breaks in the unit, the tenant has the duty to do their best to prevent damage by whatever action necessary, such as turning off the water either in the unit or at the street, notifying the landlord or agency immediately, and mopping up the water to the best of their ability to prevent further damage.

Each party owes mitigation duties to the other.

Constructive Eviction
Constructive eviction is defined by landlord/tenant law as unlawful ouster or exclusion, or willful diminution of services.

1. Unlawful ouster means that landlords may not just lock tenants out when they don't pay rent or violate one or more terms of their rental agreement, but must proceed within the guidelines of the law. Landlords are prohibited from even attempting or threatening to unlawfully remove a tenant from the premises.
2. Willful diminution of services means willfully interrupting heat, running water, hot water, electric or other essential service, and allows punitive damages for attempting or threatening to interrupt essential services. If a tenant moves in without transferring utilities to their name the landlord must serve legal notice to the tenant to transfer and pay or move out, not just stop the services.

Let that sink in. Yes, even attempting or threatening to violate a tenant’s rights as listed above can result in punitive damages, even if you never actually do it.

Unconscionability
Unconscionability is a doctrine in law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience. According to ORS 90.140, “If the court finds that a rental agreement or any provision thereof was unconscionable when made, the court may refuse to enforce the agreement, enforce the remainder of the agreement without the unconscionable provision, or limit the application of any unconscionable provision to avoid an unconscionable result.”

Unconscionability is determined by a number of factors, including power imbalance, age, mental capacity, or intoxication that make a contract unenforceable because no reasonable person would otherwise agree. As a defense, the contract has to have been unconscionable at the time it was made, and is determined only by a judge.

The takeaway Minding your business means minding your manners when dealing within the parameters of Landlord-Tenant law. There is never anything to be gained by escalating bad situations with a tenant, but a whole lot to lose. So, deal fairly, document scrupulously, and keep your emotions under control!

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.

About the Author: Tia Politi is a licensed property manager, rental owner, and president of the Rental Owners Association of Lane County. She serves as the secretary for the Oregon Rental Housing Association (ORHA) and ORHA Education, Inc., heads up the ORHA Forms Committee, serves as a volunteer instructor for St. Vincent de Paul’s Second Chance Renter’s Rehab Program, and teaches classes in rental management throughout the state, including a class teaching high school seniors the basics of renting a home. Tia owns and operates Rental Housing Support Services, LLC, providing consultation, landlord-tenant training, mediation, notice prep and service, eviction support, and telephone helpline services.

By Tia Politi, Oregon Rental Housing Association Secretary
February 4, 2020

The passage of Senate Bill 608 has thrown many long-time landlords into a bit of a tizzy. Many are thinking of getting out of the business entirely, but others are considering hiring a professional property manager because the rules have just gotten so complicated. I believe with the help of ROA and our sister organizations, you can continue to self-manage, but if you’re just done, let’s go over some criteria for evaluating management services and selecting a property manager.

Property Management Licensing & Training
The first thing to know is that (almost) everyone in Oregon who manages property for compensation must be licensed. There are a few exceptions outlined in ORS 696.020 that you can read about, but they are very limited. Property management licensing in Oregon is regulated by the Oregon Real Estate Agency (OREA). Their rules dictate the ethics, responsibilities and requirements of taking on the fiduciary duties of managing rental properties.

To obtain a license, an individual must complete 60 hours of classroom education with a certified instructor, obtain instructor approval to take the state licensing exam, pass the exam with a minimum score, be fingerprinted and pass a background check, and pay the required fees. Upon renewal of a property management license every two years, licensees must prove that they have completed a minimum of 30 hours of Continuing Education provided by certified instructors in topics related to the field, as well as a required OREA Rule and Law Course. A property manager operating under a license granted by the OREA must prominently display their license in their place of business.

I still hold a management license, but it’s inactive. What surprised me about the education I received and the exam that I passed was that it didn’t teach me anything about boots-on-the-ground property management. That takes more education, mentoring and experience. Property managers have a lot to keep track of and in order to be successful they need to cultivate a broad base of specialized knowledge, including management processes and procedures, maintenance for the types of properties they manage, trust accounting, Fair Housing, landlord-tenant law, and even contract law. They must also abide by OREA regulations, which specify the affirmative duties a property manager owes to their clients:

Duties of real estate property managers - ORS 696.890

(4) A real estate property manager owes the property owner the following affirmative duties:

(a) To deal honestly and in good faith;

(b) To disclose material facts known by the property manager and not apparent or readily ascertainable to the owner;

(c) To exercise reasonable care and diligence;

(d) To account in a timely manner for all funds received from or on behalf of the owner;

(e) To act in a fiduciary manner in all matters relating to trust funds;

(f) To be loyal to the owner by not taking action that is adverse or detrimental to the owner’s interest;

(g) To disclose in a timely manner to the owner any existing or contemplated conflict of interest;

(h) To advise the owner to seek expert advice on matters that are beyond the property manager’s expertise; and

(i) To maintain as confidential all information from or about the owner, except under subpoena or court order, even after the agency relationship ends.

(5) The affirmative duties listed in subsection (4) of this section may not be waived.

(6) Nothing in this section implies a duty beyond or in addition to those activities that are reasonably within the scope of the management of rental real estate. [2011 c.158 §1; 2013 c.145 §2]

Evaluating management companies 
So how do you evaluate a property management company? What kinds of questions should you be asking? What should you consider?

✓ Step one is to look up the business on the OREA website. You’ll want to check and see if any complaints have been filed against them. That can be a bad sign or could just indicate a one-time problem that has been resolved through education and better practices.

✓ How long have they been in business? If only a short time, that company poses a higher risk than a longtime management company with a proven record of success.

✓ You should be concerned about the reputation of the company and its principal broker, including the broker's track record, base of knowledge and industry involvement. Reputable managers generally seek to better their industry through membership in local, regional, state and national groups that promote excellence in their respective fields. What is your prospective manager doing to better their own industry?

✓ How big is the company? A smaller company may operate with only one or two people, and may offer you a more customized experience, but is that sufficient to ensure timely advertising, showing, screening, placement, management of existing tenancies, and maintenance? In a larger company, you and your property can get lost in the competing needs of thousands of owner-clients, communication can be more challenging, and they may have their way of doing things and require that you fit in their box, so to speak.

✓ What is the company structure? Who is in charge and what is the delegated authority to those under them? Who in the company is licensed and has direct oversight of management duties? Who will be your point of contact and that of your tenants? What are the qualifications of the staff in regards to their duties?

✓ What is their financial oversight process? Money issues are the source of most complaints to the OREA about licensed managers. Companies with strict financial controls are less likely to have funds go missing, so you should ask about how funds of tenants and clients are handled. What are their procedures for reducing the risk of misappropriation of client funds? The OREA requires that management companies perform a triple-check reconciliation of company funds once per month, noting any irregularities. Is your prospective manager meeting regulation?

✓ What does the company do to safeguard your personal information, and who has access? Clients and residents provide very sensitive information to their managers and the information can be an ID thief’s dream hit. So, how will your information be protected? Do they have a security system to guard against break-ins? Do they limit access to employees on a need-to-know basis? If so, how do they do that?

✓ Are they willing to provide references from other clients? While you will be referred to happy clients, you can always dig deeper with them and ask about specific things you have concerns about like frequency of inspections, how they have dealt with tenants who are violating the rules, how maintenance is handled, etc.

✓ What management software does the company use? Renters’ demographics indicate that the two largest groups of renters are Boomers and Millennials. Each group wants to be served differently. Boomers tend to be more comfortable with pen and paper, but Millennials demand a tech-friendly experience with the ability to apply, request maintenance and pay online or with their phones. Is your company prepared to meet that demand? Do you want your prospective manager to use high tech software that can accommodate Millennials, while also providing a more traditional experience to older residents? I would. Cloud-based software can also relieve concerns about real-life tragedies that can strike at any time like the management office burning down. With cloud-based systems, the information remains intact and the company can still operate from a computer anywhere. Antiquated paper-only systems can result in a total loss of information. Technology and cloud-based software can make a big difference for an owner’s experience too. The ability to log in to an owner portal where you can make contributions, view statements and invoices and retrieve tax documents at your convenience is fantastic.

✓ What is the office climate like when you visit? Property management is a customer-oriented business and tenants are your customers. You should be concerned about the experience your tenants will have with the company you hire. Will they be greeted with a smile and offers to assist, or ignored and treated like an annoyance?

✓ Does your company know how to effectively deal with tenant non-compliance? And, will they? It takes time to address issues with residents, and many companies turn a blind eye because it requires time and effort, or because they really don’t know how to do it correctly and follow through to eviction when needed.

✓ Does the company solely manage real estate, or are they also realtors? This isn’t necessarily a bad thing, but you want to make sure that just because their real estate license allows them to perform property management in addition to property sales, that they are proficient in both areas, and have staff dedicated to the management side of the business.

What should you expect to pay for management services?
Most management companies charge a percentage of monthly rents, varying from 4-10%, and some charge a flat monthly fee. Some will collect fees only when the property is rented, others will collect whether the property is rented or not. Some companies charge set-up fees and unit turn fees, and most charge some sort of early termination fee should you not keep your property with them for a minimum length of time, but some don’t. Usually, you will get some sort of break on the per-unit cost if you bring multiple properties to the company. It’s important to keep in mind that management fees are tax deductible as allowed by law.

With property maintenance, some companies charge a flat fee for each maintenance call, others mark-up repair bills by a percentage, and still others consider it part of the base management fee. Most companies retain late fees, noncompliance fees and NSF fees collected from the tenants, but what about lease-break fees? It seems reasonable to expect that you should receive at least part of that for the lost rent. Clarify these things before you sign, and know what you’re agreeing to.

The property management contract
There are standard parts of a property management contract – the term, the fees, the reporting dates, authority for costs, insurance requirements, owner reserve requirements, etc. Ask to see the contract in advance and review it carefully, and have your attorney review it as well. Perhaps the most impactful part of the contract is termination. It should specify when and how the contract may be terminated, the termination fee, if any, when services are no longer wanted or needed, and ideally should provide a speedy escape for either party in the event that either one undertakes an action that puts the other at risk. Property managers and their clients can pose liability to each other. Bringing reputations into disrepute, imposing liability for improper acts or behavior, even illegal actions can occur and put the other party in jeopardy of government fines or legal action.

I’ve seen it happen both ways. Property managers or their employees who without their client’s knowledge rented substandard or unsafe dwelling units, failed to install the required smoke and CO alarms, failed to provide lead based paint warning information and get a signed agreement, failed to require the tenant to transfer utilities out of the owner’s name and then failed to take corrective action, sexually harassed tenants, or stole their personal property, including once, an expensive purebred puppy. And owners who entered unlawfully, performed substandard repairs, used their right of entry to harass or threaten the tenants, made agreements with tenants and didn’t consult with or even inform their manager. Because of that experience, whichever side of the relationship I was on, I would want an escape clause in the event the other party does something that puts me at risk of damage to my reputation, a lawsuit, or an enforcement action by governmental authorities.

Risks of hiring a property manager
Many readers may recall the devastating impact of what I call the “Shockley Debacle.” Several years ago, Eugene property manager, Terry Shockley, owned a company called Property Management Concepts (PMC), which many believed was a highly reputable, successful company. When the company was audited by the OREA, it was discovered that he had misappropriated owner and tenant funds for his own benefit. We’ll probably never know why, but not only did he destroy his career and end up in prison, the theft had devastating impacts on many owners’ finances. He was estimated to have stolen in excess of three million dollars.

How did this happen? Clients were lured by low percentages - they were penny-wise and pound-foolish; based their selection of a manager on charisma instead of research; trusted too easily, sometimes because they went to the same church; didn’t ask tough questions; failed to verifying things like tax payments, maintenance and contracts; completely abdicated the responsibilities of rental ownership; and lacked understanding of the services they were entitled to receive.

The company I worked for at the time took over several properties from panicked owners when PMC was placed into receivership by the state, and I was shocked that these owners hadn’t confirmed that maintenance work had actually been completed or that their property taxes had actually been paid. If they had, their losses would have been far less. And, there were numerous red flags such as calls and emails not returned – ever; late payments; late or nonexistent reports; ridiculously simple reports – just numbers on a page; no copies of paid invoices with reports; monies paid in but not accounted for or paid to the contractor; and vacant properties not advertised – no ads, no yard signs, extended vacancies with no explanation or communication.

Once the truth came out, some owners were hit twice. I performed eviction services for one victim and not only did he lose three months’ rent and have to replenish the tenants’ security deposit (yes, owners remain liable for tenant deposits even if the management company collected and held them), he had to double-pay his property taxes. Turns out that although Shockley claimed he had been paying the taxes, and had charged him for it, he hadn’t and the owner ended up liable to Lane County for three years’ worth of taxes at a cost of more than $100,000, plus penalties. Another owner paid twice for a very expensive roof.

So, don’t abdicate responsibility for your property. For the victims of Terry Shockley, their only recourse was to sue him civilly and try to attach his assets. I’m not sure how successful they were. Shockley only ended up in jail because he committed wire fraud during the OREA investigation by sending falsified financial records through an out-of-state internet server. That was a criminal act, but stealing everyone’s money was not – it’s considered a civil matter under the law. Your manager is your business associate, not your friend. Don’t hesitate to ask the tough questions and hold them accountable.

Red flags
Humans (fallible all) are managing your property. Be assured at some point a mistake will be made. The most important thing to see when a mistake is made is the manager’s response. They should promptly admit their mistake, apologize and make it right, but there are predictable signs that your management company may be in trouble.

✓ Repeated lack of timely reporting.

✓ Failure to provide copies of paid invoices with monthly statements.

✓ Repeated failure to distribute funds on time. When I worked in private management, our company was transitioning to a new system for owner draws and the first month, some owner distributions did not get made when we promised. We immediately reached out to those owners to let them know about the problem and got the distributions done the next day. That’s what a reputable manager does. They don’t try to hide their mistakes, but inform their clients right away when something goes awry, letting them know that a problem happened and how it will be resolved.

✓ Failure to respond to inquiries within a reasonable time.

✓ Failure to respond to maintenance requests by tenants.

✓ Failure to perform inspections.

✓ Failure to promptly advertise vacancies.

If your manager is exhibiting one or more of these behaviors you should…

✓ Put your concerns in writing with specific expectations for improvement

✓ Transfer your properties elsewhere for management

✓ File a formal complaint with the Oregon Real Estate Agency – 530 Center St. NE, Suite 100, Salem, OR 97301 – 503-378-4170.

✓ All of the above, in sequence

With all the risks, why should you consider professional management?
Good property managers ease the stress in their clients’ lives by taking direct responsibility for the day-to-day management of their investment real estate. Acting as a fiduciary, your management company is charged with maximizing revenue and minimizing risks and expenses. This means charging market rate rents, screening prospective tenants regarding credit & criminal history, prior rental history, and ability to pay, responding in a timely fashion to maintenance requests, and finding the least expensive solutions to problems within their area of expertise. It also means reducing risks and liabilities associated with the ownership of rental property by reporting any habitability or safety issues with the property, and recommending remediation of any problems. They advertise and show the property, screen applications and fill vacancies. They collect rents, hold and distribute security deposits, pay bills on the owner’s behalf, account for and distribute owner funds, send annual tax statements and monthly financial statements, and they do it all properly, legally and on schedule.

Professional managers enforce the terms of the rental agreement by serving notice upon the tenant immediately upon breach of contract. They inspect your property on at least an annual basis or on bad reports from neighbors or drive by inspections. They may also handle eviction and small claims cases and usually know a good attorney if you need one. When it works, it’s a great, mutually beneficial relationship.

Ways to protect yourself

✓ When you and your property are set up with the company, you need to make sure that certain things are clear and in writing, and disclose certain things to your manager. Things like: Is your property located in the 100-year floodplain? Are there any services that the tenant will be obligated to pay for that benefits the landlord or other tenants? Do you have preferred vendors? Do you want the manager to require renter’s insurance? (The correct answer is, yes.) How will yard care be handled (be VERY specific)? Make sure everyone is clear on who’s taking care of things like underground sprinklers and backflow testing, fire alarm/extinguisher testing, roof/gutter cleaning. Will you allow tenants to smoke outside only or nowhere on the property? Will you allow pets, and if so, under what restrictions? There’s a lot more, just remember that good, clear documentation helps prevent problems and can ensure that you get off to a good start.

✓ Trust but verify - Don’t abdicate ultimate responsibility for your own asset. Confirm that bills have been paid, get copies of all signed tenant docs (but don’t expect copies of applications, credit reporting companies require that those not leave the manager’s office for obvious reasons), pay your own mortgage, taxes and insurance so you know it’s done. If you have no other choice, verify that the payments have been made each month.

✓ Review your monthly reports. There were a few times when I caught a company error and informed the client about what had happened and what we were doing to correct the error. It always surprised me when the client hadn’t even noticed; obviously, they were not looking over their reports.

✓ Inspect your properties yourself once a year. It shows you care and are paying attention. You’ll build relationships with your representatives and get better service overall.

✓ Document contacts and conversations with your manager just as you would with your tenants.

Behaviors that drive property managers crazy and will eventually get you fired

✓ Clients who act like they’re the only customer by taking too much staff time. Property management is a high-speed, high-stress endeavor with a lot of balls in the air at any given time. If you make a pest of yourself, you can expect to be shown the door.

✓ Clients who make out-of-line demands such as monthly inspections. Not only is this an unreasonable request time-wise, but also very likely a violation of landlord-tenant law.

✓ Clients who won’t pay for needed repairs or argue about every bill. If you want maintenance done your way, then take charge of handling it. Also understand that professional managers can’t hire your cheap unlicensed handyman for $20 an hour. They are required to hire licensed contractors or use in-house employees and that costs more like $35-$65 an hour for general repairs and much more for electricians and plumbers.

✓ Clients who violate landlord-tenant law by peeking in windows or undertaking other illegal actions. I once had an owner who lived in one side of a duplex and had us manage the other side. She took care of yard maintenance, so didn’t have to give notice to go into the yard, but on the day the tenants were expected to be out, pressed her nose up against the kitchen window “Just to see if they were out.” They weren’t and they were more than a little angry to find their landlady-neighbor looking in the window. They didn’t insist on assessing the penalty of one months’ periodic rent, but could have. She was immediately released from her contract.

✓ Clients who go around the manager and make side agreements with the tenant. I once had an owner, who unbeknownst to me told his tenant that he could install a gate and grow medical marijuana at the property. We were supremely unhappy to discover the risk he had created not only for himself, but for us as well.

✓ Clients who refuse to do reasonable things that can help rent the property or keep tenants happy. One of my former clients had a unit where the interior paint was a mess. It hadn’t been painted for many years, and was covered with primed, but not painted patches, and he refused to paint the interior. In his exact words, “It’s good enough, it’s just a rental.” Actually, this will be someone’s home. I would not want to manage for a client with that attitude.

✓ Clients who believe their way is the only way. Often, owners who have self-managed for a long time make the worst clients because they think their way is the only way or the best way to do something. So, if you want a good relationship with your manager understand that they have their own experience and way of doing things. At the end of the day does it matter how we arrive at the destination as long as we get there in a cost-effective, efficient way?

✓ Clients who expect extra services for free. Many property owners seemed to feel that whatever they asked for, was included in the contract price. While it may seem that some months the manager is getting their percentage for very little effort, even the standard work like collecting rents, taking maintenance requests, hiring vendors, paying invoices, reconciling trust accounts, and delivering payments and reports is a lot of work. They’re also providing emergency maintenance services, collecting and confirming vendor information, managing an office and staff, and providing tax statements. Pile on your request for them to arrange for and oversee your unit remodel for nothing, or handle your insurance claim for restoration after your spectacular roof failure, and you’re out of line. That costs extra, usually a surcharge of around 10% of the total costs for labor and materials to oversee the restoration.

✓ Clients who say they can’t afford an essential repair. If you can’t afford to be a landlord then you should sell your asset. Owners need to be in a position to fork over possibly thousands of dollars to replace a drain mainline when it fails, replace a worn-out heat pump or furnace, or replace the roof. Just like in your personal finances, you need an emergency fund. (Read “Minding Your Business, means Minding Your Budget” on the ROA website for more details on planning for maintenance over time. You will also find depreciation schedules that can help you plan for replacement costs down the line.)

✓ Clients who want more than the two bids provided. If you are not satisfied with the bids your manager has provided, then you can do your own research and see if you can find acceptable service for less. I did once have an owner with a broken specialty stove who found the replacement part for his stove in an obscure corner of the internet that saved him a considerable amount over the costs of parts our appliance repair company was going to charge. Managers just don’t have time to do that, and it can be unreasonable to expect it.

✓ Clients who want sole approval rights over tenant placement. Your manager has a very fine line to walk in regards to Fair Housing and equitable treatment of all applicants and may not be able to deny someone you would rather not rent to for whatever reason. If you want control, then manage your own property. Or, screen and place tenants yourself and then hand it over to the manager (if they’re willing to allow it).

✓ Clients who expect that there will never be problems with tenants that their manager has placed in the unit. Screening is a risk assessment, but it’s not perfect at separating out successful tenancies from unsuccessful tenancies. Just like when owners screen, sometimes things blow up in our faces. I once had a lady apply for a unit who seemed perfect. She presented well, had great rental history, no criminal history, decent credit and enough income to qualify. A few months after she rented the unit, she displayed very disturbing behavior to the other residents. Turns out she had an alcohol problem and mental health issues, but when she had applied and leased up, she had been in treatment and off the booze. After she moved in, she stopped her meds and started drinking again. There’s just no way to predict things like that or prevent all problems. People are by nature unpredictable beings. Once they’ve been placed in the unit, they may start gambling, doing drugs, or get divorced and have the “War of the Roses” inside your unit. That same thing could have happened to you if you had screened and placed the tenants.

✓ Clients who display angry, abusive or inappropriate behavior to residents or staff - self-explanatory.

✓ Clients who insist that a bad tenant be retained. For whatever reason, some owners are so reluctant to ever have a vacancy they want their manager to continue to work with uncompliant, unreasonable, or unstable tenants. It’s the manager’s job to manage and that includes terminating tenancy for cause. They have an obligation to you, but also to the neighbors and the community.

✓ Clients who think their manager should know everything about the condition of the unit at all times. One of my management colleagues had a client who was very angry after a leak was discovered that had created a lake under her house. I’m sorry, managers are not professional home inspectors. They’re not going to crawl under your house, or on the roof and they’re not qualified to assess the quality of the fixtures, systems or foundation of your home. That requires a professional home inspector, which they can probably arrange for if you ask and pay for it. Otherwise, they will report and respond to visible issues discovered upon inspection or reported by tenants or vendors.

Choose in haste, repent in leisure
Choosing a property manager requires careful consideration. Don’t wait until you’re up against the wall and make a decision in haste, because it could be a decision you will regret. If you have multiple properties, you might consider splitting them up and trying out two or three different managers for a year then transfer them all to the one you like best. Not everyone has the same style, so all other things being equal, some people’s personalities or management styles are best served by one manager over another.

The takeaway
Choose wisely, be professional, document well, be accountable, hold your manager accountable, read reports, and follow up and you’re likely to have a great experience with professional property management services. You might even wonder why you waited so long.

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.

About the Author: Tia Politi is a licensed property manager, rental owner, and president of the Rental Owners Association of Lane County. She serves as the secretary for the Oregon Rental Housing Association (ORHA) and ORHA Education, Inc., heads up the ORHA Forms Committee, serves as a volunteer instructor for St. Vincent de Paul’s Second Chance Renter’s Rehab Program, and teaches classes in rental management throughout the state, including a class teaching high school seniors the basics of renting a home. Tia owns and operates Rental Housing Support Services, LLC, providing consultation, landlord-tenant training, mediation, notice prep and service, eviction support, and telephone helpline services.

Click HERE to view entire document.

By Jim Straub, Oregon Rental Housing Association Legislative Director
December 18, 2019

SB 608 was the result of those negotiations between myself and Speaker Kotek.  It was passed by the 2019 legislature and went into effect February 28, 2019. Not all tenant advocates like it.  They think the rent raise limitation is too high.  However, landlords know this is not rent control, and the high rent raise limitation is aimed at rent gouging (mainly going on in Portland).  Smart landlords know they’ll have plenty of room to raise their rents every year to take care of things like maintenance, taxes and protecting their investment.

Landlords don’t like SB 608.  They know it’s a bill designed to solve problems they didn’t cause.  It places limitations on their small businesses.  As a landlord, I don’t particularly like this bill, and I don’t know any landlord who would.  However, landlords also know this was a reasonable compromise bill that took the needs of both sides into account.  And all our efforts to reach that compromise made this bill into a much better bill that it otherwise would have been.

And what happens next?  Hopefully, no changes anytime soon.  This law needs time to be put into practice and see if it bears fruit.  There will be pressure by tenant advocates to lower the rent raise cap, but smart legislators know we don’t want to discourage new development.  The last thing Oregon needs is small landlords fleeing the real estate market, leaving big corporations as the last landlords standing in the marketplace.

The worst thing we could do would be to tweak this law before we give enough time for data to come in about how it’s working, or not working.  In fact, at a recent landlord-tenant roundtable discussion I participated in, Professor for Land-Use Planning (Portland State University) Marisa A. Zapata (who is a strong tenant advocate) said, “Some (tenant) advocates say the rent raise limit is too high, but I think we need a wait-and-see approach.  We’re not yet sure what the bill will do and how things will play out.”  Advocates on both sides recommend this cautious approach, which will give this bill a fair opportunity to work as intended. 

So the truth is, do I wish SB 608 had never become law?  You bet.  With a supermajority in the legislature, Speaker Kotek could have passed nearly any housing bill she wanted.  The bill we got was a compromise with landlords, but it doesn’t benefit us much.  Of course, this bill turned out so much better than it might have been without landlord input, but Speaker Kotek’s cure may be worse the ailment.  Time will tell, stay tuned.

About the Author: Jim Straub is a third-generation landlord and real estate investor in Oregon with more than 29 years personal experience investing in, building and managing residential real estate. He is also owner of Acorn Property Management, LLC, with offices in Portland and Springfield. Since 2010, Jim has represented the Oregon Rental Housing Association as their Legislative Director. ORHA consists of 14 chapters across the state with more than 5,500 members. Jim brings a wealth of practical experience with a moderate voice to facilitate innovative ideas for modern/today’s housing dilemmas/solutions.