ORHA News

By: Tia Politi, ORHA President
June, 2023

The second annual Property Management Palooza seminar in May was a great success. This year we were able to offer in-person and virtual options with the technological expertise of ORHA Technology Director, Cloud Miller, and ORHA Office Manager, Ben Seamans. Virtual attendees were able to participate and ask questions with Ben Seamans moderating. A lot of work to plan, advertise, set up and clean up, but we had so many volunteers!

THANK YOU to Joanne Williams, Treasurer for the Rental Owners Association of Douglas County (ROADC) (and soon to be ROADC president), who owns Centerpointe Property Management in Roseburg. She graciously allowed us to use her conference room for our committee meetings the day before and sold forms and books to attendees all day.

THANK YOU to Chuck DeSerrano, board member of the Salem Rental Housing Association, and Minh Tang and Phillip Wassom, board members of ROADC who helped set up, tear down and pitched in wherever they were needed throughout the day.

THANK YOU to Veda Bell, Treasurer for the Treasure Valley Rental Association who worked the registration table throughout the day, and pitched in wherever she was needed.

THANK YOU to Rusty Allen and Leni Roper of ROADC who kept the in-person crowd well-refreshed with tempting treats.

THANK YOU to Maria Menguita who helped promote our event on social media.

THANK YOU to my fantastic co-instructors, Christian Bryant, president of the Portland Area ROA, and owner of IRC Enterprises, and property manager Violet Wilson, of the Salem RHA, who chairs the Education/Mentoring Committee, and serves as ORHA Secretary. Both are frequent instructors for their chapters and others around the state and donated their teaching time to benefit our sister chapter.

THANK YOU to those of you around the state who made the trip or logged on to attend. We raised more than $1800 to support our sister association and we appreciate your support.

And finally, THANK YOU AGAIN to ORHA Technology Director, Cloud Miller who manages our online Forms Store, and ORHA Office Manager, Ben Seamans, both of whom continue to propel ORHA into the new age. Their outsized contributions to our success at this event and to our association cannot be overstated.

By: Tia Politi
June, 2023

Landlord Penalties
Think education is expensive and time consuming? Prepare to pay for your ignorance.

“This has never happened to me before.” “I’ve always done it this way.” “But it’s a no-cause notice!” “I didn’t know that.” “I don’t have time to read what you send.” “I don’t have time for classes.”

I’ve heard it all over and over again - the reasons why one of my clients or members finds themselves in hot water with a renter. Some of you are your own worst enemy because you refuse to treat landlording as a business. Maybe the following information will inspire you to change your ways…

For every mistake a landlord makes, the law provides the tenant with remedies, including financial penalties. What are they? Let’s start with damages. Two of the first statutes in ORS Chapter 90 provide for the payment of damages to an aggrieved party, require both parties to mitigate damages, and operate in good faith. Payment of damages means that if one party harms another party accidentally, intentionally, or negligently and the other party suffers financial loss from that harm, they owe the other party compensation equal to the harm. That goes both ways, but for the purposes of this article I’m focusing only on damages a tenant can extract from their landlord.

90.125 Administration of remedies; enforcement. (1) The remedies provided by this chapter shall be so administered that an aggrieved party may recover appropriate damages. The aggrieved party has a duty to mitigate damages.
(2) Any right or obligation declared by this chapter is enforceable by action unless the provision declaring it specifies a different and limited effect. [Formerly 91.725]

90.130 Obligation of good faith. 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.

Statutory Penalties

90.150 Service or delivery of actual notice. 90.155 Service or delivery of written notice. 90.160 Calculation of notice periods. These three statutes outline how each party may serve legal notice upon the other. Different statutes call for different service methods. Different termination types provide for different notice periods. If a landlord improperly prepares or serves notice of termination, the tenant has a defense against eviction.

90.222 – Renters liability insurance. If a landlord requires a tenant to obtain renters insurance without providing the proper disclosures or knowingly requires it when the tenant is not legally obligated to obtain it, the tenant may recover the actual damages of the tenant or $250, whichever is greater.

90.228 – Notice of location in 100-year flood plain. If a landlord fails to provide a notice required under this section, and the tenant of the dwelling unit suffers an uninsured loss due to flooding, the tenant may recover from the landlord the lesser of the actual damages for the uninsured loss or two months’ rent.

90.245 – Prohibited provisions in rental agreements; remedy. If a landlord deliberately uses a rental agreement containing provisions known by the landlord to be prohibited and attempts to enforce such provisions, the tenant may recover in addition to the actual damages of the tenant an amount up to three months’ periodic rent.

90.295 Applicant Screening Charges. A landlord may require the payment of an applicant screening charge only if prior to accepting the payment they provide written screening criteria to view, they have an available unit or one that will be available soon, tell the applicant approximately how many units of that type they have or will have available, notify the applicant of approximately how many applications they already have that remain under consideration, and provide a receipt for the fee. The landlord must perform screening of the application or must refund the fee. Landlord penalty is double refund of the fee plus $150.

90.297 Prohibition on charging deposit or fee to enter rental agreement; exceptions; deposit allowed for securing execution of rental agreement; remedy. A landlord may not charge a move-in fee. A landlord may require payment of a deposit-to-hold from an approved applicant to secure the execution of a rental agreement in the future, but only if they provide a written statement describing the amount of rent, fees and deposits required, the terms of the agreement and the conditions for refunding or retaining the funds. Without providing this information, if a rental agreement is not executed due to the landlord’s failure to comply with the agreement - i.e., make the unit available for move in on the promised date - they must return the funds collected within four days. Failure to comply with this section makes the landlord liable for return of the deposit-to-hold or improperly charged move in fee plus $150.

90.300 Security deposits; prepaid rent. Failing to provide a written accounting that states specifically the basis or bases of the claim within 31 days by First Class Mail or personal delivery, withholding funds in bad faith, applying prepaid rent incorrectly, or failing to account for designated deposits properly, makes the landlord liable for twice the amount withheld without a written accounting or withheld in bad faith.

90.302 Fees allowed for certain landlord expenses; accounting not required; fees for noncompliance with written rules; tenant remedies. Landlords may only charge fees as allowed by this section. A fee is a nonrefundable payment of money for specific violations of the rental agreement, including late fees, dishonored check fees, alarm tampering fees, lease-break fees, and noncompliance fees. Any legal fees that a landlord may charge in accordance with this section must be listed in the written rental agreement. If not listed, you can’t charge. If a landlord charges a tenant a fee in violation of this section, the tenant may recover twice the actual damages of the tenant or $300, whichever is greater.

90.304 Statement of reasons for denial; remedy for noncompliance. Landlords must deny applications in writing outlining the reasons for the denial, regardless of whether they charge a fee for screening. They must also screen within the guidelines of the law. If a landlord fails to comply with this section, the applicant may recover from the landlord $100.

90.310 Disclosure of legal proceedings; tenant remedies for failure to disclose; liability of manager.  If the landlord fails to disclose the foreclosure status of a rental property with four units or less and the tenant moves out as a result, the tenant may recover twice their actual damages or twice the monthly rent, whichever is greater, and all prepaid rent, in addition to any other remedy that the law may provide.

90.315 Utility or service payments; additional charges; responsibility for utility or service; remedies. Failure to disclose utilities or services that benefits the landlord or another tenant, or failure to properly follow each of the very specific requirements to assess utility or service charges to the tenant in accordance with this section incurs a landlord penalty of twice the tenant’s actual damages or one month’s rent, whichever is greater. This section of law also addresses issues where a past tenant’s bill is required to be paid prior to utility services being established. If the tenant has not moved in, the remedies available to the tenant in this circumstance are to 1) pay the outstanding amount and deduct it from the rent; 2) enter into an agreement with the landlord to resolve the issue; or, 3) immediately terminate the rental agreement by giving the landlord actual notice and the reason for the termination. If the tenancy terminates, the landlord shall return all moneys paid by the tenant as deposits, rent or fees within four days after termination.

If the tenant has already taken possession of the unit, the tenant may, 1) pay the outstanding amount and deduct it from the rent; or, 2) terminate the rental agreement by giving the landlord actual notice 72 hours prior to the date of the termination. The tenancy does not terminate if the landlord restores service or the availability of service during the 72 hours. If the tenancy terminates, the tenant may recover actual damages from the landlord resulting from the shutoff and the landlord shall return within four days after termination, all rent prepaid for the month in which the termination occurs prorated from the date of termination or the date the tenant vacates the premises, whichever is later, and all of the security deposit owed to the tenant under ORS 90.300. If a landlord fails to return to the tenant the moneys owed as provided in…this section, the tenant shall be entitled to twice the amount wrongfully withheld…(and)…this section does not preclude the tenant from pursuing any other remedies under this chapter.

90.320 Landlord to maintain premises in habitable condition; agreement with tenant to maintain premises. This section of law outlines the duties of a landlord to maintain the unit in a habitable condition, but the penalties for failing to do so, are iterated in ORS 90.360.

90.322 Landlord or agent access to premises; remedies. The landlord or their agent has the right to enter the premises at reasonable times for many purposes with proper legal notice or without notice in case of an emergency. “Emergency” includes but is not limited to a repair problem that, unless remedied immediately is likely to cause serious damage to the premises. If the landlord makes an unlawful entry or a lawful entry in an unreasonable manner or makes repeated demands for entry otherwise lawful but that have the effect of unreasonably harassing the tenant, the tenant may obtain injunctive relief to prevent the reoccurrence of the conduct or may terminate the rental agreement pursuant to ORS 90.360(1). In addition, the tenant may recover actual damages not less than an amount equal to one week’s rent in the case of a week-to-week tenancy or one month’s rent in all other cases.

90.323 Maximum rent increase; exceptions; notice. Raising rent improperly by increasing rent within the first year of tenancy, increasing it beyond the rent cap when not exempt, or failing to provide a written 90-day notice incurs a landlord penalty of three months’ rent plus actual damages suffered by the tenant.

90.360 Effect of landlord noncompliance with rental agreement or obligation to maintain premises; generally. This statute addresses a landlord’s failure to supply habitable housing or make appropriate and necessary repairs. After appropriate notice, the tenant may terminate the rental agreement, move out, and recover their actual damages. The landlord must also return all deposits and prepaid rent. The tenant has no right to recover if they caused the damage or knew about the condition but failed to notify the landlord.

90.365 Failure of landlord to supply essential services; remedies. If the landlord intentionally or negligently fails to supply any essential service, the tenant may notify their landlord in writing and provide them a reasonable time to remedy the situation, after which a tenant may 1) procure reasonable amounts of the service during the period of the landlord’s noncompliance and deduct their actual and reasonable cost from the rent; 2) recover damages based upon the diminution in the fair rental value of the dwelling unit; or 3) if the lack of essential service makes the dwelling unit unsafe or unfit to occupy, procure substitute housing and deduct it from the rent and seek damages for the difference. The tenant can’t claim if they caused the problem, the landlord substantially supplies the essential service, or if the landlord is making reasonable efforts to supply the essential service and the cause of the problem is beyond the landlord’s control.

90.367 Application of security deposit or prepaid rent after notice of foreclosure; termination of fixed term tenancy after notice. If a tenant receives actual notice that their rental property is in foreclosure, they may require the landlord to apply any security deposits or prepaid rent to their ongoing rent obligation with written notice. If the property is retrieved from foreclosure, the landlord may require repayment of those funds, but must allow up to 90 days for the tenant to pay.

90.375 Effect of unlawful ouster or exclusion; willful diminution of services. If a landlord unlawfully removes or excludes the tenant from the premises, seriously attempts or seriously threatens unlawfully to remove or exclude the tenant from the premises or willfully diminishes or seriously attempts or seriously threatens unlawfully to diminish services to the tenant by interrupting or causing the interruption of heat, running water, hot water, electric or other essential service, the tenant may obtain injunctive relief to recover possession or may terminate the rental agreement and recover an amount up to two months’ periodic rent or twice the actual damages sustained by the tenant, whichever is greater. If the rental agreement is terminated the landlord shall return all security deposits and prepaid rent recoverable under ORS 90.300. The tenant need not terminate the rental agreement, obtain injunctive relief, or recover possession to recover damages under this section.

90.380 Effect of rental of dwelling in violation of building or housing codes; remedy. This statute is long and extremely situational, dealing with condemned properties or those deemed uninhabitable by the government. In that case, the penalties are varied. The statute does provide a benefit to the landlord in the case of an act of God or another random destructive event that renders the unit unsafe to occupy. After the property is red-tagged the landlord may terminate the tenancy with 24 hours’ notice.

90.385 Retaliatory conduct by landlord; tenant remedies and defenses; action for possession in certain cases. This is a statute that gets a lot of landlords in trouble. Retaliatory acts can include increasing rent, decreasing services, terminating tenancy, evicting, or even threatening to evict the tenant after they have performed a protected act. Retaliation may be claimed as a defense if the tenant complains or threatens to complain to a governmental agency about building, health or safety codes, mail delivery, discrimination, or the tenant organizes or joins a tenants’ union, they testify against you in a proceeding, or beat you in eviction court within the past six months. Then there’s a last catch-all phrase in the statute, “Or, the tenant has performed or expressed intent to perform any other act for the purpose of asserting, protecting or invoking the protection of any right secured to tenants under any federal, state or local law.” That covers a lot of ground. If the landlord retaliates, the tenant is entitled to the remedies outlined in 90.375 and has a defense against eviction.

There are some defenses to retaliation. The complaints by the tenant were unreasonable in their timing or manner and served only to harass the landlord, the violation of codes was caused by the tenant, the tenant was in default in rent (unless they pay rent into court), or compliance with codes requires the tenant to vacate.

90.390 Discrimination against tenant or applicant; tenant defense. If a landlord discriminates against a tenant or applicant in violation of local, state or federal law, the tenant has a defense against eviction, unless the tenant is in default in rent; however, the tenant may pay rent into court and may then proceed with a discrimination defense.

90.391 Information to veterans required in notice. In any notice of termination, the landlord is required to include information on where veterans may access housing assistance – regardless of whether the tenant is a veteran. The language must be in the notice, not attached to it. If not provided, the tenant has a defense against eviction.

90.394 Termination of tenancy for failure to pay rent. Landlords must now provide at least 10-days’ written notice for nonpayment of rent and must include information on rent assistance with the notice. If landlord fails to include rent assistance information, or refuses to cooperate with an assisting agency, the tenant has a defense against eviction.

90.412 Waiver of termination of tenancy. If a landlord accepts behavior from a tenant in violation of the rental agreement for three separate rental periods or longer, they waive their rights to terminate based on that specific breach. Waiver can be a tenant defense against eviction.

90.414 Acts not constituting waiver of termination of tenancy; delivery of rent refund. A landlord may create a different kind of waiver if they accept payment from a tenant that exceeds the amount owing when a notice of termination is pending, or the landlord has initiated an eviction. The landlord has 10 days to return an overpayment by First Class Mail or personal delivery and avoid waiver. Waiver can be a tenant defense against eviction.

90.425 Disposition of personal property abandoned by tenant. Landlords must comply to the letter with a tenant’s right to their abandoned property, by providing legal notice and follow all regulations based on the type of property that is abandoned. If the landlord fails to comply with statute, the tenant is relieved of any liability for damage to the premises caused by conduct that was not deliberate, intentional, or grossly negligent and for unpaid rent and may recover from the landlord up to twice the actual damages sustained by the tenant.

90.427 Termination of tenancy without tenant cause; effect of termination notice. This statute outlines all the ways a landlord can evict for no cause; although, it does include nonrenewal in a fixed-term lease for three strikes (which is to my mind, a termination for cause, but I digress). There are specific rules a landlord must follow in terminating tenancy for no cause or a qualifying landlord reason that are outlined and the timeframes required for each. If a landlord terminates a tenancy in violation of this section, the landlord shall be liable to the tenant in an amount equal to three months’ rent plus the tenant’s actual damages, and the tenant has a defense against eviction.

90.449 Landlord discrimination against victim; exception, tenant defenses and remedies. This statute addresses landlord discrimination against a victim of domestic violence, sexual assault, or stalking. If a landlord discriminates against a victim, the tenant or applicant may recover up to two months’ periodic rent or twice the actual damages sustained by the tenant or applicant, whichever is greater, the tenant has a defense against eviction, and the applicant may obtain injunctive relief to gain possession of the dwelling unit.

90.460 Alternate exit from bedroom required; tenant right to recover for landlord. A landlord shall provide at all times during the tenancy a route or routes of exit from each bedroom and, if required, a secondary route of exit from each bedroom, for use during an emergency. The routes of exit must conform to applicable law in effect at the time of occupancy of the building or in effect after a renovation or change of use of the building, whichever is later. If the landlord fails to comply with this section, the tenant may recover their actual damages and terminate the tenancy with 72 hours’ actual notice. If the landlord cures the violation within the 72-hour period, the tenancy does not terminate; if they do not, then the tenant may terminate and recover twice their actual damages or twice the periodic rent, whichever is greater, and the landlord must return all security deposits and prepaid rent owed to the tenant under ORS 90.300 within four days after the termination.

EPA Penalties
If the landlord fails to supply the pamphlet, “Protect your Family from Lead in the Home,” to a tenant in a property built before 1978, and have them sign acknowledging receipt, the base fine is $6,000. Remember that rules for renovating homes built before 1978 have also changed and make a landlord, property owner or property manager liable for a third party who performs work on a pre-1978 built structure. Everyone, even property owners, must be lead-paint certified and must comply with the applicable rules. Mishandling of lead-based paint or other hazardous materials like asbestos can bring hefty fines along with remediation requirements.

Fair Housing Violation Penalties
You may not discriminate against a tenant or applicant in a protected class and there are severe landlord penalties for doing so. Protected classes are:
Federal - Race, color, national origin, religion, sex, familial status, and disability.
State of Oregon - Marital status, source of income, sexual orientation, and gender identity.
Local - Some cities in Oregon have additional protected classes. Eugene, for example, has added protections for age, type of occupation, ethnicity, and domestic partnership.

If a Fair Housing investigator concludes that a landlord violated the Fair Housing Act, they can be ordered to:

• Compensate the tenant for actual damages, including out-of-pocket expenses and emotional distress damages.
• Provide permanent injunctive relief.
• Provide appropriate equitable relief (for example, make the housing available to the tenant).
•  Pay the tenant’s reasonable attorney’s fees.
• Pay a civil penalty to HUD to vindicate the public interest. The maximum civil penalties are:
• •  $16,000, for a first violation of the Act.
  • $37,500 if a previous violation has occurred within the preceding five-year period.
  • $65,000 if two or more previous violations have occurred within the preceding seven-year period.

The takeaway
Remember the old saying:  If you think education is expensive, try ignorance. You’ll pay one way or the other, either through taking the time to get properly educated, or by paying tuition in the school of hard knocks. I’ve paid that tuition and I’ve found it more cost effective to learn how to do things the right way in the first place. All I hear is how expensive attorneys are, how much it costs to belong to ROA, how much time and expense is involved in taking classes because, “I’m just so busy.”

How much attorney time could $16,000 buy you? Just asking…

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 6/2023

By: Tia Politi, ORHA President
May 01, 2023

ROADC Palooza!
Hope to see you all at the ROADC Palooza on Friday, May 19^th at the Holiday Inn in Roseburg with in-person and virtual options for attendance. Three of us are volunteering to teach that day, myself, Christian Bryant, and Violet Wilson. Our goal is to raise awareness and boost the coffers of the Rental Owners Association of Douglas County, a chapter that is in the ORHA Mentoring Program. This event started last year in Astoria and was a great experience.

The hotel is fantastic, with every room having a balcony with a river view, and an indoor pool. There is also a huge covered hot tub right on the river. Remember, your travel expenses can be tax deductible as a business expense if you come for the education, and there are some great things to do and see in the lovely Umpqua Valley, including Wildlife Safari, various wineries, parks, a great museum, gardens, farms, waterfalls, and nearby hikes. So, bring the family, get some great education and sneak in a little fun. Please join us in person or online for a fabulous day of education!

The Education/Mentorship Committee under Violet Wilson’s leadership has expanded greatly and is making a real difference to our smaller associations, helping them grow and providing education and other types of support that over time will contribute to their membership base and eventual self-sufficiency. We’re all in this together; what we do to help each other makes us all stronger. Read Violet’s rundown of our Mentorship Program later in the newsletter.

What does it mean to be an ORHA Delegate?
Our county associations and their representatives make up the Oregon Rental Housing Association. Each chapter is allowed two delegates and two alternate delegates. Delegates are who make up the ORHA Board of Directors, without delegates attending meetings and taking their turn in leadership of the board and our various committees, we cease to exist.

When chapters don’t send their delegates, too much work gets piled on too few, so the Executive Committee is exploring options for increasing the allowable delegates for those associations who have more willing volunteers. We want to ensure, however, that each chapter’s input is given equal weight, so whatever proposal we end up bringing before the board, each county association will still only be allowed two votes at board meetings. The Executive Committee plans to present our ideas at the July meeting in Silverton at the Oregon Gardens Resort.

Nearing the end of the 2023 long legislative session
We’re close to the end of this year’s session. Thank you all so much for your vigorous response when we emailed you asking for testimony Check out our legislative team’s update later in the newsletter.

Despite the many challenges we face, rental ownership is still a great way to build financial stability, we just need to stay educated on how to operate within the ever-changing regulatory landscape. We appreciate your membership and support!

Tia Politi, ORHA President

By: Tia Politi
May 01, 2023

Like to save money? I sure do. As frugal as I am you’d think I was raised during the Great Depression. But I’m seeing a lot of landlords trying to save a buck and costing themselves big time.

Online Screening Company Nightmares
Zillow - Apartments.com - Furnished Finders
Don’t let these people screen for you! Why not?

• They do a poor job at screening. In at least two cases I looked up, Zillow reported to a member that the applicant had no criminal record when they did. Zillow, Furnished Finders, and others make it seem as though they are performing the same functions as any screening company, but are they? Not in my experience.
• Also, unless you’ve put your full screening criteria in your ad and let the tenant know where they are in line, you’ve just violated ORS 90.295. Didn’t charge the fee you say? Wrong. These companies have charged it on your behalf as your agent.
• You could get flooded with applications, requiring you to then deny multiple applicants. I got a call on the Lane Helpline from a member who had posted her ad on Zillow and checked the box allowing Zillow to screen for her. She woke up the next morning to 60 applications in her inbox. She asked if she had to send written denials to everyone she didn’t select. The answer is YES – read ORS 90.304. In Oregon, regardless of whether you charge a screening fee, and even if you’re denying someone’s application because you rented the unit to someone else, you must deny each applicant in writing within 14 days. If you used a screening service, you must let the applicant know the name and address of the screening company…better get Zillow’s address! And, because her ad didn’t list her screening criteria or indicate where the applicants were in line, technically, she was in default of the requirements for landlords to charge a screening fee. The penalty for that is a refund of twice the amount of the fee plus $150. I recommended that she consider refunding the fees of everyone she did not choose to be on the safe side.
• If the denial is based on a credit report, you must inform the applicant of the name of the credit reporting company who provided the information. Do you know where Zillow, Apartments.com or Furnished Finders are pulling credit info? Better find out…

Instead, always use a reputable company that knows the laws in Oregon, such as Acranet or National Tenant Network.

Bad Rental Agreements
Don’t use free rental agreements online, including Apartments.com, Furnished Finders or any other free thing you find. Why? While there’s some standardized parts of these agreements that are okay, in every agreement I’ve seen, I find provisions that are illegal in Oregon. such as charging late fees if rent is not received by the 1^st, 2^nd, or 3^rd of the month instead of the minimum of 4 days, incorrect fee charges for late rent that made it so the landlord could not charge a fee at all, NSF fees that are higher or lower than provided by law, and no disclosure regarding what noncompliance fees a landlord may charge (which is required for you to assess those).

While it’s not against the law to have illegal provisions in your rental agreements, it’s a huge problem if you attempt to enforce those provisions. A tenant attorney would be happy to educate you for an exorbitant fee.

90.245 Prohibited provisions in rental agreements; remedy. (1) A rental agreement may not provide that the tenant:

• (a) Agrees to waive or forgo rights or remedies under this chapter;
• (b) Authorizes any person to confess judgment on a claim arising out of the rental agreement;
• (c) Agrees to the exculpation or limitation of any liability arising as a result of the other party’s willful misconduct or negligence or to indemnify the other party for that liability or costs connected therewith; or
• (d) Agrees to pay liquidated damages, except as allowed under ORS 90.302 (2)(e).

(2) A provision prohibited by subsection (1) of this section included in a rental agreement is unenforceable. If a landlord deliberately uses a rental agreement containing provisions known by the landlord to be prohibited and attempts to enforce such provisions, the tenant may recover in addition to the actual damages of the tenant an amount up to three months’ periodic rent. [emphasis added]

I’ve seen agreements that confuse deposits with fees and lead the unwary landlord to charge move in fees, pet fees, cleaning fees, etc., when those things are illegal under Oregon law. A fee is a nonrefundable payment of money, a deposit is a payment of money held by the landlord to secure against default or damage and is always potentially refundable. ORS 90.302 restricts the charging of fees to specific defaults or violations, and any fee the landlord may charge must be described in the written rental agreement, or you can’t charge any fees at all.

I’ve seen things in these agreements that limit your rights as well. For example, a requirement that the security deposit accounting be returned within 15-20 days instead of the full 31 days provided by law. While a tenant cannot waive their rights per the statute above, nothing prevents a landlord from waiving theirs. So, using agreements that limit your rights are enforceable against you.

I’ve seen agreements that include lead-based paint information without the landlord perhaps not providing the required EPA pamphlet, “Protect Your Family from Lead in the Home,” or getting the tenant’s acknowledgement that they received it, and without the full legal disclosure required by the EPA. Remember, EPA penalties start at $6,000.00.

I once had a client have to pay their tenants and the tenants attorney an $11,000.00 settlement partly based on a bad rental agreement that did not disclose that the tenants were responsible for their own garbage service. Say, what? Yes, remember under the Habitability section of landlord-tenant law landlords must indicate the tenant is responsible for garbage removal in writing or must provide garbage service:

ORS 90.320(1)(g)
Except as otherwise provided by local ordinance or by written agreement between the landlord and the tenant, an adequate number of appropriate receptacles for garbage and rubbish in clean condition and good repair at the time of the commencement of the rental agreement, and the landlord shall provide and maintain appropriate serviceable receptacles thereafter and arrange for their removal.

This wasn’t the only issue at hand in the case, but it was a habitability violation that gave the tenant’s attorney ammunition to use in court. Still think free agreements are a good idea? Allow me to continue to beat you over the head (figuratively) with my ORHA Law Book. I’ve seen the following issues with many of these “free” agreements:

• Required the tenant to get renter’s insurance but did not state when it is illegal to require – a violation of ORS 90.222. It also did not require that they must name the landlord as an interested party.
• An indemnification section against damages caused by mold which could lead the unwary landlord to think they are protected – not so.
• A 60-day no-cause notice after the first year of tenancy, which is only allowed in a two-unit, owner-occupied property.
• A lease of the property on a year-to-year basis – terrible idea.
• Arbitration clauses that don’t specify who will pay for the service. Does this mean you can’t pursue legal remedies until this remedy is fully explored? Not sure.
• Non-waiver clause that says no matter what the landlord does they don’t create waiver. Not enforceable.
• Late rent makes all rent due immediately.
• Prohibits the tenant from terminating the agreement at all.
• Allows the landlord to retake possession without due process if the tenant is gone for more than 7 days without notice. 

One member let me know that Zillow routes phone calls through their system, not directly to your phone number. He said, “They say it's to reduce spam…They also record the entire conversation. For example, I can hear both my voicemail and the message the person left in this phone lead. It's creepy and I'm not sure it's legal…though I probably consented to it at some point. Anyway, might be worth noting in your article that their phone system is fully recorded.”

The takeaway

• Use proper screening forms that disclose all the required information for the state of Oregon (Screening Packet – ORHA form #S1), and, if you’re charging a screening fee, you must comply with ORS 90.295(3):
• • A landlord may not require payment of an applicant screening charge unless prior to accepting the payment the landlord:
  • (a) Adopts written screening or admission criteria;
  • (b) Gives written notice to the applicant of:
  • • (A) The amount of the applicant screening charge;
    • (B) The landlord’s screening or admission criteria;
    • (C) The process that the landlord typically will follow in screening the applicant, including whether the landlord uses a tenant screening company, credit reports, public records or criminal records or contacts employers, landlords or other references;
    • (D) The applicant’s rights to dispute the accuracy of any information provided to the landlord by a screening company or credit reporting agency;
    • (E) A right to appeal a negative determination, if any right to appeal exists;
    • (F) Any nondiscrimination policy as required by federal, state or local law plus any nondiscrimination policy of the landlord, including that a landlord may not discriminate against an applicant because of the race, color, religion, sex, sexual orientation, national origin, marital status, familial status or source of income of the applicant;
    • (G) The amount of rent the landlord will charge and the deposits the landlord will require, subject to change in the rent or deposits by agreement of the landlord and the tenant before entering into a rental agreement; and
    • (H) Whether the landlord requires tenants to obtain and maintain renter’s liability insurance and, if so, the amount of insurance required; and
  • (c) Gives actual notice to the applicant of an estimate, made to the best of the landlord’s ability at that time, of the approximate number of rental units of the type, and in the area, sought by the applicant that are, or within a reasonable future time will be, available to rent from that landlord.
• Use proper rental forms from the Oregon Rental Housing Association or other reputable landlord association and use all the necessary forms – Don’t step over a dollar to pick up a nickel it’s never worth it!

This column offers general suggestions only and is no substitute for professional legal counsel. Please contact an attorney for advice related to your specific situation.

By: Tia Politi, ORHA President
April 01, 2023
We’re in the last couple of months of the session and politics is at a fever pitch. Recently HB 2001 was signed by the Governor, at the end of March, substantially changing the time frame for eviction for nonpayment of rent. Read the article by Eugene attorney Brian Cox for a full run-down of the changes, and check out the legislative update elsewhere in this newsletter for the latest news coming out of Salem. Thank you for helping by submitting testimony to your elected representatives. It really does make a difference!

Because it will now take much longer to evict a tenant for nonpayment, I want you all to think about changing a couple of things. First, I think it is wise to start requiring a minimum base deposit of two months’ rent because that’s how long it could take to evict for nonpayment. As restrictions get tighter, I also recommend tighter screening standards. No more second chances.

I also want to draw your attention to a little-known landlord option: increasing the security deposit. What? You can do that? Yes, you can!

ORS 90.300(5)(a) Except as otherwise provided in this subsection, a landlord may not change the rental agreement to require the tenant to pay a new or increased security deposit during the first year after the tenancy has begun. Subject to subsection (4) of this section, the landlord may require an additional deposit if the landlord and tenant agree to modify the terms and conditions of the rental agreement to permit a pet or for other cause and the additional deposit relates to the modification. This paragraph does not prevent a landlord from collecting a security deposit that an initial rental agreement provided for but that remained unpaid at the time the tenancy began.
(b) If a landlord requires a new or increased security deposit after the first year of the tenancy, the landlord shall allow the tenant at least three months to pay the new or increased deposit.

We have a newer form, Notice of Security Deposit Increase – ORHA form #O14, that can help you accomplish this. Like the law says, you must provide a minimum of 90 days to pay the increased amount and you can always give more time if you wish. I recommend that landlords consider this option if you have renters who chronically pay late. This is also a good tool to cover damage caused by the tenant that doesn’t make sense to repair now. Just increase the deposit to cover the damage so you have enough at the end to cover the costs.

Having said that, it’s always important to remember that everything we do under landlord-tenant law must be reasonable and we must act in good faith. When you’re looking at doing something like increasing the security deposit, you should always imagine yourself standing in front of a judge explaining your decision-making process. What is the basis for the increase? Is the additional amount you are requesting reasonable based on the factors at hand? If you feel that you can justify the increase, then do it.

The good news about HB 2001 for landlords and tenants alike is that the state is creating a rent assistance fund that will be administered through Oregon Housing and Community Services. As someone who’s in eviction court a lot, there are people for whom this is going to make a huge difference. Assistance may be able to bridge the gap between losing a job and getting a new one, overcoming an illness, or repairing a broken vehicle. Remember that you must cooperate with an assisting agency, or your tenant will have a defense to eviction. If the tenant’s application is successful, you should be reimbursed for all costs incurred to that point and maybe some forward rent as well.

And finally, a reminder, that our meeting in May is in Roseburg and ORHA is hosting a live and virtual Property Management Seminar on Friday, May 19^th at the Holiday Inn. Check out the announcement later in the newsletter for more information. We hope to see you there, but space is limited, so reserve your space today!

Warm regards,
Tia Politi, ORHA President

March 24, 2023 

Dear Gov. Kotek,

On behalf of Oregon’s rental housing industry and the millions of Oregon families that rely on a stable rental market, thank you for your vision and leadership in addressing our state’s dire housing crisis. The strength of Oregon’s economy and the health of Oregon families are completely dependent on our ability to provide housing that is safe and affordable. As you have indicated, the answer to housing instability is a complex and many-faceted one, which will take bipartisanship and creative public-private partnerships to make progress on.

As partners in keeping Oregonians housed, we engaged in your work to pass HB 2001, which is an unprecedented effort to immediately and strategically invest in housing stability around the state. While all stakeholders compromised on various priorities in that legislation, we certainly appreciate the urgency with which you have met this crisis so far, and that you continue to seek our engagement in these policies.

This year, housing providers have facilitated the ability of renters to run childcare businesses in their units (SB 599) and, despite our initial concerns to changes in the nonpayment eviction process, we understand that additional time for some Oregonians is necessary (HB 2001). We have advocated for streamlined resettlement policies for refugees (SB 935), and last year supported a new mandate for air conditioning units in rentals (SB 1536). In addition to our work with all housing advocates, we continue to support new investments in permanent, robust rent assistance programs (HB 5019).

Time and again, our organizations encourage housing policies that balance necessary investments and ensure Oregonians have access to the housing they need. We stand ready to work with you and all our elected representatives to continue to address housing instability. In that spirit, we feel compelled to raise serious and significant concerns with Senate Bill 611.

SB 611 Disincentivizes Existing and New Housing Development

This bill represents an enormous barrier to your stated (and laudable) goal of building 36,000 new units of housing each year. Simply put, further regulations on how and when housing providers can increase rents while ignoring the real expenses that drive rent increases, are well intended policies that do not achieve their stated goals.

Oregon is already in a startling housing deficit – and, we already have a rent control law on the books. Our state is underbuilt by roughly 111,000 units just to meet existing demand.1 Building projections in today’s economic environment are flat through 2027 and permit times for multifamily developments are averaging more than 400 days in the Portland-metro area, where the need remains the most urgent.2

The provision within SB 608, which established Oregon’s current rent control law, that exempted new construction for 15 years was designed to incentivize construction. Ratcheting that down to just three years runs counter to reasonable economic logic and will undoubtedly lead to continued underproduction across the state by throwing future and existing investments into unpredictable regulatory territory.

Layering on another unnecessarily tight new restriction on rents will only exacerbate the housing crisis by forcing investors and developers to do business in states that are more serious about relieving the pressure on the rental market. SB 611 is a huge step in the wrong direction that will lead us further away from our housing goals.

SB 611 Completely Ignores Economic Realities

Rent prices are influenced by many factors outside a housing providers’ control. Yet, the Legislature is laser focused on capping rents and disregarding the real costs associated with any potential rent increase. Record inflation is impacting business owners and housing providers as much as it impacts renters; not to mention rising utility costs, insurance rates, prices of goods and services, payroll increases, and mounting local tax burdens that have vaulted Portland to the top of the list of highest taxed jurisdictions in the country (behind only New York City).3

If housing providers do not see any relief in the costs associated with providing housing, many – especially smaller owners – will certainly be forced to sell. This is especially true considering the provision in SB 611 to triple the relocation payment owed to a renter. Portland provides a cautionary tale: After mandatory relocation assistance and other strict rent regulations were enacted by the city council in 2017, the city saw a 14% decrease in the availability of single-family rentals.4

Increasing our supply of rental housing also means preserving the existing stock. The Legislature must not continue to make it more expensive to own and operate desperately needed housing.

SB 611 Places Burden Completely on Housing Providers

Finally, Oregon’s rent control law is only four years old. For three of those years, housing providers were subject to pandemic-era restrictions around eviction for nonpayment of rent that has led to many hundreds of thousands of dollars in lost income – with the state’s plagued rent assistance program largely to blame. While the pandemic has receded by several metrics, housing providers and renters are still feeling the impacts.

SB 608 was a first-in-the-nation law at the time, and the state would be wise to give that policy more time to work as intended. While opposed to rent control for several reasons, our organizations are not advocating to dismantle the current law. However, if rent caps are lowered even further, that impacts the ability of housing providers to make needed investments in their units, upgrade services, pay employees more competitive wages, and can lead to a host of other problems as outlined previously.

There is no disagreement that low-income Oregonians need assistance right now. We applaud your efforts to raise the pay of hourly state employees, to increase childcare subsidies, and to make our state more affordable for working families. Those efforts – including your administration’s refreshing focus on housing production and new investments in a rent assistance program – will be minimized should SB 611 move forward.

Our organizations are fully committed to helping your administration solve the housing crisis and we look forward to working closely with legislative leadership throughout the rest of the session and beyond to make progress for our communities.

Sincerely,

Commonwealth Real Estate Services
Manufactured Housing Communities of Oregon
Multifamily NW
National Apartment Association
National Association of Residential Property Managers – Greater Portland Chapter Oregon Business & Industry
Oregon Home Builders Association
Oregon REALTORS®
Oregon Rental Housing Association
Oregon Park Owners Alliance
Oregon Rental Housing Alliance
Portland Business Alliance
Portland Metropolitan Association of REALTORS® 

CC: Senate President Rob Wagner
Senate Majority Leader Kate Lieber
Senate Minority Leader Tim Knopp
House Speaker Dan Rayfield
House Majority Leader Julie Fahey
House Minority Leader Vikki Breese-Iverson

1https://www.oregon.gov/lcd/UP/Documents/20221231_OHNA_Legislative_Recommendations_Report.pdf 2https://www.revitalizeportland.com/post/stop-the-bleeding-issues-symposium-materials
3https://oregonbusinessindustry.com/wp-content/uploads/OBI-Tax-Burden-Final-Report-October-2022-1.pdf
4https://assets.noviams.com/novi-file-uploads/mfnw/Files/article/Portland_MetroDetached_Housing_Rental_Stock_Analysis-Updated_Report-3-25-22__002_.pdf

By: Tia Politi, ORHA President
March 01, 2023

Looking forward to seeing our ORHA delegates live or in-person at our March meeting in Medford. Remember, it’s the delegates from each chapter that make up our board, we need each chapter to do their part to keep ORHA strong. If your chapter’s delegates are not attending, then it’s time to select new delegates!

Without representation at each meeting, your chapter won’t have the inside info on what’s going on around the state. If you’re not up for travel, remember your delegates can always participate in the meetings online. But I recommend coming in person if you can. We don’t just work, we play too. We always go out for dinner and sometimes catch some good entertainment. It feels great to build relationships with others around the state as we work hand-in-hand to promote financial stability and generational wealth through rental property ownership.

Under the leadership of Office Manager, Ben Seamans, and Technology Chair, Cloud Miller, the ORHA office continues to make great strides in streamlining our processes and procedures using Microsoft Teams. Remember, all chapters now have access to the amazing integrative technologies offered with this program. You can use the system to enhance your own chapter’s office procedures, including payment approvals, project tracking, teaching classes or meeting online, and much more. I’ve asked Ben to please conduct tutorials at each meeting moving forward, but remember, you can set an appointment to have a one-on-one with him for this or any other reason. Check out his office report for more information on scheduling a meeting.

And in some of the best news coming out of the office, Ben has figured out a way to sell our manuals online using the program. Can’t wait to have you hear all about it at the March meeting. Hope to see you there!

By: Tia Politi
March 01, 2023

The COVID-19 pandemic and increasing state and local regulations are causing many rental owners who may have toyed with the idea of an exit strategy into getting more serious about selling their rentals. Some are taking the tax hit, but others are using the 1031 exchange process and buying rental properties in less restrictive areas of Oregon or in other states. If you’re a landlord who’s thinking about selling or a realtor marketing a tenant-occupied property, here’s some food for thought.

Tenancy termination

The passage of Senate Bill 608 in 2019 changed how rental owners could terminate tenancy. The law enshrined in ORS 90.427 does continue to allow termination of tenancy for no-cause in the first year, but after the first year, tenancy termination is limited to for-cause terminations or for one of four Qualifying Landlord Reasons. So, if the tenant is violating the rental agreement or landlord-tenant law – not paying rent, not keeping the unit in a clean condition, disturbing the peaceful enjoyment of neighbors, etc. – you may want to contact an attorney or eviction specialist to check on your options there.

Otherwise, your only other termination option (with one exception) is to terminate for one of four allowable Qualifying Landlord Reasons (QLR), each of which require a minimum 90-day written notice.

1. The property is being demolished or converted to a different use other than residential use within a reasonable time.
2. The landlord intends to undertake repairs or renovations to the property within a reasonable time and the property is unsafe or unfit for occupancy or will be unsafe or unfit for occupancy during repairs or renovations.
3. The landlord intends for the landlord or a member of the landlord’s immediate family to occupy the dwelling unit as a primary residence and the landlord does not own a comparable unit in the same building available that is available for occupancy at the time the notice is delivered.
4. The landlord is selling the dwelling unit separately from any other unit and has accepted an offer within the past 120 days from a buyer who intends in good faith to occupy the dwelling unit as their primary residence.

For reason number four, you cannot serve notice just because you are marketing the unit for sale. You must have an accepted offer from a buyer who intends to occupy the home as their primary residence. Also, the notice must include “written evidence of the accepted offer” to purchase the unit and be served within 120 days after accepting the offer. The sales agreement may state that the buyer intends in good faith to occupy the dwelling unit as a primary residence, but if not, a signed affidavit from the buyer can be included with a copy of the accepted offer.

How are you to know if a buyer will want to keep the property as an investment and be willing to take on the existing tenancy, or if they want to purchase the home to occupy as their primary residence? You won’t until you get an offer, but rentals generally make ideal starter homes for first-time homebuyers.

If a buyer is purchasing a property for a family member to live in, and the family member is not on title, they must wait until they own the property and may then serve a 90-day notice for that reason.

ORS 90.427(1)(b) “Immediate family” means:
(A) An adult person related by blood, adoption, marriage or domestic partnership, as defined in ORS 106.310, or as defined or described in similar law in another jurisdiction;
(B) An unmarried parent of a joint child;
(C) A child, grandchild, foster child, ward or guardian; or
(D) A child, grandchild, foster child, ward or guardian of any person listed in subparagraph (A) or (B) of this paragraph.

Once an offer is proffered and accepted, the seller can provide the tenant(s) with Notice of Termination-Qualifying Landlord Reason - ORHA form #T5, check the correct box, provide the evidence of the accepted offer to purchase, and pay the tenant the relocation expense of one-months’ periodic rent unless exempt. Owners with an ownership interest in four or fewer residential dwelling units subject to ORS Chapter 90 are exempt from the payment of relocation expenses. If required, the relocation payment must be included with the notice. It cannot be issued as a credit, and it does not matter if the tenant owes you money for something else. You must include payment with the notice.

Relocation expenses in the city of Portland are much higher and have few allowable exemptions. The Portland relocation fee does not have to be paid right away like the state’s fee but within 45 days, and Portland landlords may reduce the Portland fee by the amount of the required state fee. Go to https://www.portland.gov/phb/rental-services/renter-relocation-assistance for more info.

The city of Eugene is currently working to implement their own sky-high relocation payments, stay tuned: https://www.eugene-or.gov/845/Rental-Housing-Code

Any notice of termination must be prepared and served in accordance with ORS 90.150, 90.155 & 90.160, and will remain in effect for the purchaser if the sales closes during the term of the notice. The buyer can end up with liability if the seller fails to prepare and serve the notice in accordance with the law. The tenant has the right of due process and can challenge the notice in court. If the buyer proceeds to eviction court, and they have inherited a defective or imperfectly served notice of termination, they could lose the case, maybe have a judgment rendered against them, possibly have to pay the tenant’s attorney and start over again. Who will be sued if that happens? Everyone. Get professional assistance.

In a case where a seller believes that it is likely the property would be sold to a buyer who wants to live in the property, and will need to get a mortgage to purchase, the best strategy may be to terminate tenancy for another QLR, such as the owner intends to undertake repairs or renovations to the unit within a reasonable time and the unit will be unsafe or unfit for occupancy during repairs or renovations.

Does your renovation qualify?

Realtors encourage sellers to spruce up the unit prior to marketing, but how significant do the repairs or renovations need to be to claim the right to terminate for renovation? One attorney I took a class from on this subject said any renovation had better impact habitability, so check out ORS 90.320, the Habitability section of landlord-tenant law. You may be challenged and have to justify your decision to a judge, so be prepared to think about this ahead of time.

A full interior repaint might qualify on an older home with lead-based paint that is substantially peeling, but might not, and maybe replacement of flooring, ceiling tiles or texture containing asbestos. Kitchen or bath remodels would likely render the unit uninhabitable, especially if there’s only one bathroom, but things like new windows may not. Unless there is significant rot requiring structural repair, or you are increasing or decreasing the size, new windows can be installed from the outside with little disruption. Re-wiring, re-piping, repairing significant rot in subfloors or walls, replacing kitchen cabinets or tub surrounds, tearing open walls to create an open floor plan, abating hazardous materials, these are examples of renovation work that would more than likely pass the ‘unsafe or unfit for occupancy’ threshold.

Supporting facts

To terminate tenancy for a QLR requires that the landlord provide “supporting facts” regarding the reason for termination. For a property sale to an owner-occ buyer, you must include, “written evidence of the accepted offer.” For the renovation option you must describe the work you intend to do that will render the unit “unsafe or unfit to occupy.” For example, in 2021, hubby and I gave notice to tenants in a property we wanted to sell that needed substantial renovation. We had dug a new well the year before, but still needed to move our pressure tank to the new well house, dig and place water lines, cap off the old water lines, and hook up to the new well. We also intended to tear out part of a wall, update the bathroom, upgrade some electrical and other plumbing, and of course, do a lot of cosmetic work. We put together a list of those items to include with our notice. In another unit, we had to tear out and rebuild the only bathroom, so even though we were also doing substantial cosmetic work, that’s what we listed as our supporting facts, because that’s what was going to render the unit uninhabitable.

Some landlords (and one notice I saw from an attorney) quote the statute as their supporting facts, i.e., “We intend to undertake repairs or renovations to the property that will render the unit unsafe or unfit to occupy.” I always thought that would not be good enough and one of my colleagues in Salem told me about a case the landlord lost where that’s all they had written. The judge said it wasn’t enough. They needed to describe the renovations.

If you’re hiring a contractor to perform the repairs, they can describe the renovations and you can attach a copy of their bid. If you’re doing the work yourself, describe what you’re doing that will render the unit unsafe or unfit. Even then, a tenant can sue later if they feel your level of renovation wasn’t enough to render the unit unsafe or unfit. One member had a foundation issue in an older home that required a large section of floor to be cut out, so served proper notice. But when the tenant moved and her contractor cut open the living room floor, they found that the foundation repair was less substantial than they had thought. They were able to fix it quickly and the rental owner got the unit back in shape and back on the rental market. The tenant saw that the property was being advertised for rent soon after his move out and is suing. I think she’ll be okay because the only way to determine the extent of the repair was to cut out the floor, she has her contractor to testify for her, and she gave the notice in good faith, but we’ll see what the judge says when the case is heard.

Note:  Your insurance policy may not provide full coverage for your unit if it is vacant for more than 30 days, so contact your insurance company to learn about insurance options for vacant properties.

The duplex rule

Termination rules do provide a narrow exception for owners with no more than two units on the same tax lot where one unit is their primary residence. Landlords are allowed to terminate tenancy for no-cause with a 60-day written notice. Also, in these types of situations, a 30-day notice of termination is allowed if the property is to be sold and the buyer intends in good faith to occupy the tenant’s unit as their primary residence. If the buyer does not intend to occupy the tenant’s unit as their primary residence, then the tenant comes with the sale. For either reason use Notice of Termination – Two-Unit/Owner-Occupied Property – ORHA form #T7. And just like with a QLR, if you’re terminating in 30 days based on a buyer occupying the tenant’s unit as their primary residence, you need to include a copy of the accepted offer within 120 days.

If the duplex is being held as an investment property and the seller does not live in one unit, but the buyer wants to occupy one side as their primary residence after closing, the same rules would apply as if for a single-family home. If the tenancy has been in place for more than one year on the side the buyer wants to live in, the seller would either have to issue the 90-day notice of termination for one of the four QLRs allowed by law, or sell the property as-is and the buyer can issue the notice for the QLR of wanting to live in the unit as their primary residence. Once the notice expires and the tenant vacates, the buyer can then move in.

A problem with the statute wording

You may notice that the statute – ORS 90.427(5)(c) – that allows a landlord to issue the 90-day notice if they are selling the property to an owner-occ buyer says, “…the landlord has accepted an offer to purchase the dwelling unit separately from any other dwelling unit from a person who intends in good faith to occupy the dwelling unit as the person’s primary residence. So, does that limit a seller’s right to terminate tenancy for buyers to occupy one or both sides of a duplex? Or a main house and an ADU?

I don’t think so, because later in the same statute – ORS 90.427(8)(a)(C)(i) – when referring to the two-unit owner-occupied exemption it uses the same language “the dwelling unit is purchased separately from any other dwelling unit,” and because that part of the statute specifically applies to a two-unit property, attached or unattached, to my mind (not legal advice, only lay-person reasoning) it indicates you may serve a notice to terminate for buyers to live in one or both sides. I’m not aware of any case law on this subject, so if you get pushback you may want to get some qualified legal advice before proceeding.

Getting the renter's cooperation

I’ve always recommended to owners wanting to sell that they first offer the property to the renter. Maybe you can carry the note or maybe not, and while it is rare that an offer like this results in a successful purchase, it’s not unheard of either. If that’s not an option, sellers and their realtors should always consider ways to garner the renter’s cooperation in the process. They’re not going to be happy about the situation. Many rental owners with long-term renters have kept their rents low, and the renter is likely to experience some amount of sticker shock when they head out to shop for a new home. There is also a lack of available units, making their situation even more bleak.

And while the pandemic seems to be abating, it’s still important to take into consideration renters’ pandemic-related worries about exposure to the virus. I’ve been recommending rental owners reach out to the renters and let them know how the process will go and what steps you will take to reduce the numbers of showings. It might look something like this:

• The realtor will make an appointment to shoot a detailed walk-through video and take lots of pictures, taking all reasonable COVID-safe precautions by always wearing a mask and gloves, if the renter wants that. The realtor may also want to consider having a forehead thermometer with them to provide proof to the renters that they and anyone they show the property to has a normal temperature. And if you expect the unit won’t look its best, some realtors or their clients are paying to have someone come over and clean the home or spruce up the landscaping prior to shooting a video or taking pictures, even if that is the renter’s responsibility.
• Require any interested parties to watch the video, look at the photos and do a drive-by of the unit. Then, make sure they are financially pre-qualified in some fashion to schedule a time to view the property. That will eliminate the looky-loos and reduce in-person showings to serious buyers only.
• Provide ‘consideration’ for each showing (and maybe even for allowing the realtor in to do the video and take pictures). Consideration means money. Perhaps a credit or payment of $25 per showing or per hour for an open house. I’m not saying $25 is the magic number, just what seems about right to me. Money makes everything better; not perfect, but better.

I also recommend working with the renters to pick one or two weekdays and one weekend day per week that works best for them and doing your best to limit showings to those two or three days, if possible. Try to understand how disruptive it would be to have strangers tromping through your home. Their home is their sanctuary, their safe place as yours is to you. You’ll have a better chance of garnering their cooperation by being sensitive to that – at least they have some assurance that for four or five days every week they will be left alone to live their lives.

Let the renters know what the timeline is for termination so they can start planning. Let them know about the 90-day notice period so they have assurance there will be time to look for and secure new housing.

Entry without notice to show the property

ORS 90.322 states in part that, “A landlord and tenant may agree that the landlord or the landlord’s agent may enter the dwelling unit and the premises without notice at reasonable times for the purpose of showing the premises to a prospective buyer, provided that the agreement.

(A) Is executed at a time when the landlord is actively engaged in attempts to sell the premises;
(B) Is reflected in a writing separate from the rental agreement and signed by both parties; and
(C) Is supported by separate consideration recited in the agreement.”

So, if the renters are willing, you can enter into an agreement for property showing using, Entrance Agreement for Property Showing - ORHA form #O13. I imagine very few, if any, renters would be okay with allowing realtors or owners to show a property without notice, but it’s worth asking.

Denial of entry

What if, despite all your efforts to gain cooperation, the renter just won’t cooperate? While ORS 90.322 specifies that a landlord has the right of entry after providing a minimum of 24 hours’ notice, it also allows renters to issue a reasonable denial of entry, ‘“Unreasonable time” refers to a time of day, day of the week or particular time that conflicts with the tenant’s reasonable and specific plans to use the premises.’ So, if you want to enter at 2:00 p.m. on Saturday, but the tenant has scheduled their child’s birthday party at that time, those are reasonable and specific plans to use the premises. The statute goes on to say that “A landlord may not abuse the right of access or use it to harass the tenant. A tenant may not unreasonably withhold consent from the landlord to enter.” Tenants can assert denial of entry by actual notice (calling you, emailing or texting, etc.) or by posting a note on the entry and you are not allowed to enter.

If the renters won’t cooperate regarding setting specific days for showings, you’ll have to serve a 24-Hour Notice to Enter – ORHA form #O4 each time you want to enter. If you have the right listed in your rental agreement, you may email or text your notice to enter. To bolster your case that a specific denial of entry is unreasonable, you may want to include some language like this:

“We will take any COVID-safe precautions you request. We will only spend as little time in the unit as possible and expect the walk-through will take a maximum of 15-20 minutes. If our requested time and date for entry conflicts with your specific plans to use the property at that time, we will accommodate a different time or day within a 48-hour period following our intended date and time of entry. Please contact us right away to reschedule.”

The way to gain entry after a tenant has unreasonably denied your request is to serve a Notice of Termination with Cause – ORHA form #VT5, as allowed by ORS 90.392. I call this notice a 30/14, some folks call it a 14/30. The notice provides the renter with a minimum 14-day cure period to allow entry, or the tenancy would terminate within a minimum of 30 days. While that is a long time to wait to enter, once that notice is in place if they don’t cure you can evict. If they do initially cure the notice and let you in, but unreasonably deny entry again within six months of service of the original 30/14, the same statute allows you to serve a Repeat Violation Termination Notice – ORHA form #T1 and terminate the tenancy with 10 days’ written notice. The renter has no right to cure this notice.

If you find yourself in this situation, remember, the denial must be unreasonable and you may have to prove that both the original denial of entry and the repeat denial were unreasonable, and that your notice(s) are perfect in every way. That’s why it’s helpful to start with a plan as I’ve outlined above so you have something to show a judge in the event you end up in eviction court. Communications with the renter showing the efforts you made to address any COVID-related concerns and your attempts to be flexible and adapt to their schedule should be helpful in proving their specific denial was unreasonable.

Delayed or accelerated move out

Just because a notice of termination is served, doesn’t mean that the timing will work out. At least half of the time, there is some delay in the move out – sometimes because the timing for a unit the renters have been approved for isn’t ready, sometimes because they have been unable to find anything. I always encourage owners to build in some sort of flexibility to the move out date. If in the end the renter needs more time, if you can, be ready to offer some sort of extension. But only agree if the renter puts their notice to vacate in writing to you and pays the prorated rent for the extra time. Use Notice of Termination from Tenant – ORHA form #T10.

If you can’t offer more time, and the renter won’t move out, the only other option is to initiate an eviction action in court, which can take three to five weeks or more. If the termination notice is contested, the process can be delayed further, so everyone should factor that into the timing of the notice to vacate. And remember that even if you serve a 90-day notice, the tenants may instead find something quickly and provide just 30 days’ notice to vacate which could throw off the timing as well, although for buyers and sellers that may be less of a concern.

What if the sale falls through?

You must rescind the notice and start all over again with a new notice once you receive and accept another offer. If you were required to pay relocation expenses to the tenant, however, you don’t need to pay them again.

When to close

If a buyer intends to live in the property and makes an offer, most buyers will need a mortgage to purchase, have an interest rate lock that expires in 45 days, and be required to occupy the home within 30-45 days after closing. With the current volatility in interest rates, buyers who need a mortgage and the sellers hoping to sell, are having a tougher time. If the property sale closes during the notice period, the buyers will be ones tasked with handling the move out and deposit accounting. This can be a big headache if they are not landlords and/or if the seller’s property condition reports are shoddy or nonexistent.

Even though it can impact interest rates, buyers might be well advised to wait for the tenants to move out before closing on the sale to avoid the hassles of security deposit reconciliation and maybe even eviction. And, if that’s not possible buyers may just have to suck it up and refund the entire deposit if there’s no evidence from the seller regarding condition. Just one more thing to think about and plan for.

Cash for keys

Cash for keys is a tried-and-true method for regaining possession of a property and nothing prohibits both parties from making a mutual termination agreement. Just make sure that the terms are clearly spelled out in writing, and that the agreement states what will happen if the tenant complies and what will happen if they don’t comply. We have a great new form Mutual Termination Agreement – Release of All Claim – ORHA form #T9. Use it to record the terms and if the tenant fails to move out, it can form the basis for an eviction. Whatever amount of money you agree to pay, you may have to provide at least part of the funds up front, so they have money to put down somewhere else. Try to negotiate paying only part of it and specify that they only get the remainder in exchange for possession of the property at the agreed upon time. That way if they don’t move out when they agree, you don’t have to pay them the rest.

Marketing an investment property

Termination laws do not impact property sales where the seller and buyer are both investors and the buyer won’t be living at the property, but there are still issues that can make the property easier or more challenging to market – mostly in regards to the price of rents, the quality of the tenancies, and the completeness of the seller’s documentation.

Owners who have under-market rents will find that their properties cannot prove sufficient cash flow to meet the demands of sophisticated investors, and they won’t be able to command the same price. If you are planning to sell an investment property in the not-too-distant future, and your rents are below market, plan to increase rents within the limits imposed by ORS 90.323 until your rents are market rate so that your property can command the best sales price.

The quality of the tenancies can help or hurt investment property sales as well. Residents who are keeping to their lease and caring for the property are a fantastic marketing asset for sellers; problem residents are not. Maybe you should think about removing your problem residents ahead of offering the property for sale. Also, the completeness of the seller’s tenancy documents can also help or hurt the sale. If there are gaps or flaws in paperwork, fix them now, or be prepared to accept a lower price as a buyer will have to agree to accept the increased liability and correct the deficiencies.

Paperwork pitfalls

What does good paperwork look like? The rental agreement and all addenda are complete, initialed, signed and dated by all adult occupants, the seller has adequate documentation on the condition of the units on move in, copies of work orders, accurate and complete tenant ledgers, good notes and copies of notices regarding lease violations during the tenancy, and detailed inspection reports.

Without good paperwork, a buyer may be purchasing liability. For example, the seller is marketing their property built prior to 1978, but has no signed lead-based paint disclosure. The penalty for this violation if reported to the EPA, is $6,000. The buyer could require as part of the sale, that the seller fixes the deficiency in the paperwork so that they are not taking on that kind of liability. Or the buyer could agree to accept responsibility for fixing that problem after the sale but use that deficiency to negotiate a lower price.

The takeaway

A property sale with tenants in place requires better advance planning by sellers, more thorough investigation by buyers, and for realtors, it requires a higher level of due diligence than ever before. For realtors, fulfilling your fiduciary duty to your clients means educating yourselves on the mandates of ORS 90.427 and all its intricacies to provide clients with the best information possible as to the benefits, drawbacks, and possible outcomes of selling tenant-occupied rental property.

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. This article and the laws referenced herein, are current to the date of publication. Laws and rules change, sometimes with lightning speed, and local law overlays may apply. Proceed with caution.
Rev. 3/2023

February 21, 2023

Chris Kornelis of the Wall Street Journal writes about the current market creating temptations to turn homes into rental properties instead of selling them. In the article, he speaks with landlords and rental industry experts from throughout the country about the biggest mistakes first-time and veteran landlords make when they get into the rental-property business. Among those interviewed, was our very own Tia Politi, ORHA Board President. She offers her insights about where many housing providers go wrong.

"It’s also important to understand that what a property owner can charge for rent isn’t dependent upon costs—that is, there is no guarantee that a landlord will be able to charge tenants enough to cover both the monthly costs on the property and needed repairs and home improvements.

Tia Politi, who owns multiple rental units with her husband near Eugene, Ore., and is the president of the Oregon Rental Housing Association, says first-time landlords will sometimes tell her: This is what my mortgage is and my taxes and insurance, so this is what I want you to charge for rent.

“Well, I’m sorry. Rents are not dependent upon what your costs are,” she says. “They’re dependent on what the market will bear.”

You can read more about on the Wall Street Journal.

By: Tia Politi, ORHA President
February 01, 2023

If you are a landlord whose rents are extremely low and you were hoping to take advantage of the generous rent increase percentage we are allowed so far for 2023 (14.6%), you might want to get that notice served sooner rather than later. There is a bill in the works to reduce the allowable increase amounts, and of course it has an emergency clause attached to it, so would become law immediately upon the Governor’s signature, if it passes. While the possible reduction in allowable rent increase amounts isn’t too bad for owners whose rents are in the market range, for those of you who are playing catch up, you’ll get even further behind, so get going! You must provide at least a 90-day written notice, but nothing says you can’t give more time. If the bill passes, as it currently reads, it won’t impact notices to increase rent that have already been served, so even if you aren’t increasing until later in the year you can serve the notice now.

The 2023 legislative session is in full swing. Please stay alert for opportunities to submit testimony. We are facing a number of disheartening bills that, if enacted, would continue to impact our members – your legislators need to hear from you, it really does make a difference!

Looking forward to seeing all our ORHA delegates at our next meeting in Medford, March 17-18. We do have a cap on the number of attendees due to space constraints at the hotel, so chapter delegates, you need to RSVP early to get a seat. Registration info can be found in Ben Seamans Office Report. Looking forward to seeing you all there. We are looking at finding a place to have a group dinner on Friday after committee meetings, so if you want to join in, check in with me on Friday and I’ll let you know where we’re going.