Oregon Law Changes Impacting Residential Landlords & Tenants

Introduction

2019 was an eventful year for the Oregon legislature. Oregon opened with a bang in February passing statewide rent control, continuing with new mobile home park rules and finishing with some more state taxes. Portland was also busy with the passage of the Fair Access in Renting (FAIR) ordinances which will dramatically alter application screening and security deposits beginning in late March. All of these changes have made us take a close look at our operations to make sure we are in compliance. In this article, we will be addressing major legislative changes that impact residential rentals. However, we will not cover the FAIR Ordinances in this newsletter but will provide an article in the coming weeks.

Rent Control: Senate Bill 608

Senate Bill 608 caps rent increases at 7% per year + consumer price index (published annually by the Oregon Department of Administrative Services on September 30th, currently 2.9%); restricts no-cause terminations to the first year of the tenant’s occupancy; and establishes a relocation fee equal to one month’s rent for tenants being displaced.

Note: Under the law, one may levy a 9.9% increase and a separate increase for utilities. However, this is not the case in the City of Portland where the total of all increases, rent and utilities, may not exceed 10% without triggering Portland relocation assistance.

Senate Bill 608 does provide landlords some relief by:

keeping the state’s preemption over local rent control regulations;
creating a new “tool” to terminate leases after three violations in a year; and
defining landlord-based exemptions to terminate a tenancy (with the payment of a relocation fee to equal to one month’s rent*) to:
- demolish or repurpose a dwelling within a reasonable time;
- renovate or repair premises that are or will be unsafe or unfit for occupancy within a reasonable time; and
- occupy a premises as a primary residence for self or immediate family.

* Owner-occupied units, owner-occupied duplexes and landlords with four or fewer rental are exempt from paying relocation fees.

Residential Rental Registration & Tax (City of Portland)

In July 2018, Portland passed a city code that requires owners to register all of their rental properties and pay a 60/unit tax. 2020 is the first that the tax is due and enforceable.

Applicant Screening Changes (Senate Bill 484)

Impact: Restricts a landlord’s ability to charge multiple screening fees.

It is common practice for applicants to pay a screening fee. These costs can add up quickly when applying for multiple apartments. This law limits a landlord to charging a single screening fee in a 60-day period for unit owned or managed by the same landlord.

Additionally, the law provides that an applicant may not recover a screening charge if the tenant refuses an offer from the landlord to rent the dwelling unit.

Marijuana Screening Criteria (Senate Bill 970)

Senate Bill 970 is primarily related to manufactured dwelling park statutes and “facility landlords” and prohibits all residential landlords from considering minor marijuana convictions, possession of a medical marijuana card, or status as a medical marijuana patient when evaluating rental applications.

Military Veteran Services Notification (House Bill 2530)

Impact: Requires residential landlords to notify veterans of special services available to them upon eviction or foreclosure.

Disclosures shall include contact information for county veterans’ service office, community action agency or 2-1-1 referral service.

Housing & Community Services Department Grant (House Bill 2006)

Impact: Corrects Senate Bill 608 and funds housing-related support services to low-income Oregonians.

The bill appropriates $3 million from the General Fund to the Housing & Community Services Department to support programs that help people to obtain and retain housing. Examples include tenant education programs, technology solutions that help low income people find available housing, fair housing training for tenants and landlords, and assists victims of domestic violence and sexual assault with housing needs.

This bill also clarifies that units owned by a landlord, but not used as a rental (i.e., private residence, vacation home, etc.) do not count toward the 4-unit threshold for exemption from the relocation assistance requirement.

Rent Guarantee Program (Senate Bill 278)

Impact: Extends eligibility of program that helps low-income tenants qualify for rental housing.

Rent Well is a tenant education course that helps low-income individuals who have poor credit, past evictions, or criminal history and who are at risk of homelessness or currently homeless. Graduates receive a certificate giving their landlords access to the Rent Well Landlord Guarantee Fund, which may cover damages, unpaid rent or eviction cost.

Senate Bill 278 extends eligibility for the Rent Guarantee Program to individuals between 16 and 27 years of age who were wards of the juvenile court within the past ten years.

Summary

As you can see, there were a lot of legislative changes in 2019 that impact 2020 and beyond! On the other hand, there were many bills that did not pass. The goal of this article is to give visibility to the massive amount of change owners of real estate faced in this last legislative session. The biggest challenges for all of us will be to review these bills and change policies to meet the new regulations.