Bill Miner Q&A: Stipulated Payment Agreement and Covid

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Bill Miner

Question: We were awarded a stipulated payment agreement  prior to the moratorium going into effect. The resident has defaulted on their agreement but has tried to make partial payments. If the courts were open, we could file a notice of noncompliance and move forward with an eviction. But the way I understand our current landscape is,  if we take a partial payment that’s not equal to his stipulated payment agreement,  it gets thrown out and we would have to start the process all over again.   It would be great if we could accept the payments and if by the time the moratorium was over and the resident was still behind on then we could file on the defaulted agreement.

 

 

Answer:  This is a question regarding stipulated agreements pursuant to ORS 105.145. The statute allows the parties to an eviction action (FED) to enter into an agreement where the tenant agrees to perform in a certain manner which may include how much and when a landlord will be paid past due rent, late fees and attorney fees/costs. There are a few rules relating to entering into these agreements: future performance or conduct (i.e. following a rule) cannot extend beyond six months, past due rent must be paid within the six months following entry of the order, and the agreements can address future rent (but only up to three months).

 

Typically, the parties at the first appearance for an FED negotiate the agreement and present it to the Court. If the Court accepts the agreement, it turns the agreement into a court order or judgment. In most cases, if the Court doesn’t hear from either party, the Court will deem the agreement satisfied and the case will be dismissed.  These agreements are excellent tools for a tenant to be able to negotiate a non-traditional payment plan to help them get caught up on rent and valuable to a landlord because if a tenant doesn’t perform, the landlord can receive possession of the premises in fairly short order (without having to go through a trial).

 

In order for a landlord to enforce the agreement, the landlord files an “affidavit of non-compliance”. Essentially, the landlord says: “this was our agreement and the tenant did not comply.” Once an affidavit of non-compliance is filed, the Court immediately awards the landlord a judgment of restitution and issues a notice of restitution to the tenant. A tenant can ask for a hearing on the landlord’s affidavit pursuant to ORS 105.148. In their request for a hearing (and at the hearing), the tenant can present facts that support the following:

 

                a. the landlord is wrong; the tenant complied with the agreement;

                b. Before the tenant could comply, the landlord was supposed to do something that the landlord did not do;

                c. the landlord and tenant changed the agreement and I complied with the agreement as changed;

                d. the landlord prevented me from keeping the agreement;

                e. the agreement was not made in good faith;

                f. a portion or the entire agreement was unconscionable;

                g. the landlord is required by law or contract to have good cause to force me to move out and my alleged conduct or performance does not meet the standard of good cause;

                h. the tenant did not have to pay the agreed amount because the landlord violated the Landlord Tenant Act after the agreement was entered into.

 

Turning to the question above, accepting performance that is different than what is in the stipulated agreement provides an argument that the landlord and tenant changed the agreement. A landlord can accept performance that is different than what is in the stipulated agreement but with the understanding that the tenant has cured the default and is now performing pursuant to a new agreement. The new agreement should be in writing, explain how the agreement is different, that the landlord can file an affidavit of noncompliance upon future default and be signed by the parties.

In summary: you can accept performance outside of the agreement; however, the change in performance should be agreed to and allows the tenant to get back on track. You are not permitted to accept a late payment and then move forward with the filing of an affidavit of non-compliance.

 

Bill Miner

Partner In Charge

Davis, Wright, Tremaine

1300 SW Fifth Avenue, Suite 2300

Portland, OR 97201-5630

503-241-2300

billminer@dwt.com

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