Phil Querin Q&A - Rent Tenders and Non Payment of Rent Evictions

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February 23, 2016
Phil Querin
MHCO Legal Counsel
Querin Law

Question:  We have a situation at our park that we have never encountered.  We have been dealing with a resident who has certain complaints against management, and finally withheld his rent.  We just issued a 72-hour notice to him, and after expiration of the 72 hours (plus three days, since we’d mailed the notice to him), we filed an eviction against him in court.  He got an attorney, filed a number of counterclaims against us, and tendered the month’s rent into court. What do we do?

Answer:  One of the most common types of residential eviction is also the most misunderstood - the nonpayment of rent eviction.  A good tenant's attorney can frequently retain possession for his/her client, even though they clearly failed to pay the rent when due. All it takes is a little familiarity with that labyrinthine set of statutes in the Oregon Residential Landlord Tenant Act, or "ORLTA." 

It is common knowledge that unless the parties have agreed otherwise, rent is due on the first day of each month.  Rent does not become delinquent until after the expiration of seven days, including the date rent is first due.  An eviction cannot be filed until after the expiration of 72 hours' written notice.  This means that the earliest a 72-hour notice may be delivered to the resident is on the 8th day of the month, and the earliest one may file for eviction is on the 11th day of the month, i.e. 72 hours hence.[1]

However, oftentimes it is not until the first appearance following the filing of the eviction that the landlord discovers that the resident has gone to an attorney and is now raising various counterclaims under ORLTA. Some of these counterclaims may be without any real factual basis, and may have been raised primarily to secure either more time or some other concession from the landlord.

Assuming that the resident either has the money to pay the rent, or can somehow gather it together prior to a trial, this is a battle that the landlord is almost sure to lose. The reason is found in the rent-tender statute, ORS 90.370.  Essentially, this statute, and several cases that have construed it, permit the resident to tender the past due rent into Court, even though it was not paid during the 72-hour period set forth in the notice.  At the conclusion of the case, if the Court finds that the amount tendered into Court covers the amount found to be due, the resident automatically retains possession.

Example:  Landlord files an eviction against resident based upon the failure to pay monthly rent of $400. Resident files counterclaims alleging ORLTA violations, and claims that because of the deficiencies, the “market rent” (as opposed to the “contract rent”, i.e. the amount due under the rental agreement) for the premises is only $100 per month – not $400 per month.  Resident has had possession for seven month, six of which he paid the full rent that was due, and on the seventh month, i.e. the one for which the eviction was filed, he withheld the monthly rent. But he tendered the full $400 rent into court for the seventh month, and counterclaimed for $1,800, i.e. $300 for each of the prior six months’ possession for which he “overpaid”.  Assuming that the counterclaims were made in good faith, here are the various scenarios:

                        1.     Worst Case for Landlord:  The Court finds in favor of the resident, awarding him a judgment for $1,800 (6 months X $300) plus costs and attorney fees.

                        2.  Best Case for Landlord:  Although the Court finds against the resident on his counterclaims, and finds that the amount due to the landlord is the full $400, since it has already been tendered into Court, the resident is allowed to retain possession, and may submit a request for recovery of his costs and attorney fees.  This is because subsection (1)(b) of ORS 90.370 provides that “If no rent remains due after application of this section and unless otherwise agreed between the parties, a judgment shall be entered for the tenant in the action for possession. (Italics mine.) Thus, the resident is still the prevailing party and entitled to an award of attorney fees.[2]

                        The only exception to the "Best Case" scenario is where the landlord is able to convince the Court that the resident’s counterclaims are improper and/or have been filed in bad faith.  If so, the rent tender will do the resident no good, and if he loses his counterclaims, he will be evicted and become subject to a judgment for the landlord's costs and attorney fees.

                        So, when should the landlord fight to evict a resident for nonpayment of rent, where the resident has tender rent into Court?  Only in the following situations: (a) Where the landlord is confident that he/she can convince the Court that the counterclaims were filed in bad faith; or, (b) Where the rent tender is believed to be inadequate and the resident's attorney does not realize that the shortfall could be tendered into Court so that no rent would remain due “…after application of this section….”  In virtually every other situation, the odds of winning a contested nonpayment of rent eviction where there has been a full rent tender are virtually nonexistent.[3]

 


    [1] This analysis does not consider the 144-hour notice provisions of ORS 90.394(2)(b). However, the rationale is exactly the same whether the notice is based upon 72 hours or 144 hours. The only difference is the calculation of the time periods.

[2] ORS 90.255 provides: In any action on a rental agreement or arising under this chapter, reasonable attorney fees at trial and on appeal may be awarded to the prevailing party together with costs and necessary disbursements, notwithstanding any agreement to the contrary. As used in this section, prevailing party means the party in whose favor final judgment is rendered. (Italics mine.)

[3] These conclusions are based not only upon a reading of the statute, but also several well-established Oregon cases construing it.

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