Phil Querin Q&A: Rent! Everything You Thought You Knew

Want access to MHCO content?

For complete access to forms, conference presentations, community updates and MHCO columns, log in to your account or register.

January 23, 2018
Phil Querin
MHCO Legal Counsel
Querin Law

Oregon Rent Increase Laws In Manufactured Housing Communities

Question No. 1.  If a resident in a manufactured housing community is on a two-year lease, when may the landlord increase rent?

 

 

Answer. There is a critical difference between fixed term leases (i.e. those having a definite commencement date and expiration date) and periodic tenancies (i.e. month-to-month tenancies that continue month after month, and only terminate if the tenant gives not less than 30-days’ written notice, or the landlord terminates for cause).

 

Fixed term tenancies may only be for a term of two years or more. Rent is set in the lease, and (hopefully) the landlord has built into the document a rent increase formula (e.g. a “base” amount plus a percentage increase tied to some recognized index, e.g. the CPI, or Consumer Price Index).  Not less than 60 days prior to the expiration of the lease term, the landlord must give written notice of the terms of the new lease (including rent), and may include new rules, etc., so long as they are all consistent with the terms of the leases and rules given to new incoming residents. See, ORS 90.545.

 

Rent for periodic tenancies, such as month-to-month, can only increase through a 90-day notice, pursuant to ORS 90.600. Note that this statute limits its application to “month to month tenancies”, so a landlord with a fixed term tenancy cannot use that statute to increase rent for a fixed term tenancy.[1]

 

Question No. 2.  Can a landlord raise rent in the first year of the lease, or does he/she have to wait a year? Is there a way around the first year limitation on rent increases if the resident is on a lease?

 

Answer. Section 2 of House Bill 4143 (2016) provides as follows:

 

(2) If a tenancy is a month-to-month tenancy, the landlord may not increase the rent:

(a) During the first year after the tenancy begins.

(b) At any time after the first year of the tenancy without giving the tenant written notice at least 90 days prior to the effective date of the rent increase.

(3) The notices required under this section must specify:

(a) The amount of the rent increase;

(b) The amount of the new rent; and

(c) The date on which the increase becomes effective.

(4) This section does not apply to tenancies governed by ORS 90.505 to 90.850. (i.e. manufactured housing communities)  (Emphasis mine.)

 

So in regards to your question, the one-year limitation only applies to month-to-month tenancies for homes that are not under the law governing manufactured housing communities, i.e. ORS 90.505 – 90.580. 

 

However, note that RVs are not considered manufactured homes, so if you had them in your community and they were on month-to-month tenancies, you would be subject to the one year limitation on rent increase.

 

And there is no one-year prohibition against rent increases for homes on leases, either inside or outside manufactured housing communities, because, as noted above, it is assumed a rent increase protocol was already built into the lease at the time it was signed by the landlord and tenant. The state law cannot interfere with that contractually agreed-upon arrangement.  So you don’t have to figure out a work-around for leases – just build in a good formula to cover the years of the lease term.

Question No. 3. What about rent increases in the Portland metro area? What are the limitations? 

Answer.  Originally, the Portland rent increase law as it applied to rental homes, apartments, and RVs, contained the one year limitation discussed above. But in 2016, HB 4143 was enacted, which expanded the one-year limitation statewide.  So the rent increase law for Portland and the rest of the state is the same with one major exception:

 

If a rent increase in the city of Portland is 10% or more,[2] the tenant may opt to vacate, and the landlord is required to pay for their relocation assistance. The details are contained in the Portland City Code 30.01.085 (Portland Renter Additional Protections) here.

 

Question No. 4. Other than leases in the Portland metro area - what are my rights and responsibilities of raising rent in an Oregon manufactured home community.

 

Answer. There are only two types of tenancies – fixed term (e.g. leases for two or more years) and periodic (e.g. weekly and monthly). As discussed above, the regime for increasing rent for fixed term tenancies is contained in the body of the lease; no statutes or ordinances control.

 

As for month-to-month tenancies, rent increases are governed by ORS 90.600, which requires not less than 90-days’ written notice (plus at least three days for mailing) “…prior to the effective date of the rent increase specifying the amount of the increase, the amount of the new rent and the date on which the increase becomes effective.”

 

Even though the statute does not place any limitations on the frequency or amount of rent increases in manufactured housing communities, there are indirectly some common sense limitations: e.g. what are other parks charging in the area with the same or similar amenities?

 

Question No. 5. Finally, what about rent increases in RV parks - are the terms the same for RV parks as manufactured home communities?
 

Answer.  As noted above, rent increases for RVs on periodic tenancies, inside or outside of parks, are treated the same as for tenants in rental homes and apartments; the law requires not less than 90 days’ written notice, and prohibits increases until after the first year of the tenancy. The big exception is for the city of Portland, in which increases of 10% or more have some rather harsh financial consequences to landlords.

 

Advance notice of increase requirements or rent increase limitations do not apply if the tenant is on a lease (unless provided in the lease itself), since both parties agreed, in advance, to the rent formula in the written document.

 

 

 

 

 

 

 

 

 

 

 

 


[1] However, notwithstanding the limited application of ORS 90.600, I personally believe that a landlord may (with assistance of competent counsel) include in a lease, a program, not unlike that contained in ORS 90.600, providing that the rent may be increased, say annually, with 90-days’ notice, in an amount not to exceed X% of base rent, thus giving the landlord the ability to vary rent increases not tied to an index, but rather to the landlord’s business needs. 

[2] Be careful here! The percentage increase applies to “Rent” and “Associated Housing Costs” which are defined in the ordinance. 

Location Tags: