Phil Querin Article and Analysis - New Laws on Disrepair & Deterioration - New MHCO Form 55

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August 22, 2017
Phil Querin
MHCO Legal Counsel
Querin Law

 

 

Introduction. This bill is an attempt to deal with issues that had arisen between residents in some Oregon communities and their landlord regarding the physical condition of their homes. The result is a change to ORS 90.632 (disrepair and deterioration) which contains more detail than previously, but is nevertheless manageable.

 

By way of refresher, ORS 90.630 pertains to curable maintenance/appearance violations relating to residents’ spaces.  However, if the violation relates to the physical condition of the home’s exterior, ORS 90.632 applies, to address repair and/or remediation that can take more time to cure, either due to the weather, the amount or complexity of the work, or availability of qualified workers.

 

As a result, SB 277A, which became law on June 14, 2017 (“Effective Date”), will apply: (a) To rental agreements for fixed term tenancies – i.e. leases – entered into or renewed on or after the Effective Date; and, (b) To rental agreements for periodic tenancies – i.e. month-to-month tenancies – in effect on or after the Effective Date.

 

MHCO has significantly changed its current form No. 55 to address the changes in the new law. The major issue going forward is for managers and landlords to be able to recognize when to use Form No. 55 to address disrepair and deterioration conditions, versus Form No. 43C, which is appropriate for violations relating to maintenance and appearance of the space.

 

Tip: Although Form 55 is only for use when there is disrepair or deterioration to the exterior of the home itself, the definition of a manufactured dwelling in ORS 90.100 includes “an accessory building or structure,” and that term includes sheds and carports and “any portable, demountable or permanent structure”. Accordingly, even though the damage or deterioration may relate to accessory buildings or structures – and not to the home itself – they too are subject to the new law. 

 

30-day and 60 Repair Periods.  If the disrepair or deterioration to the exterior of the home or related structures creates a risk of imminent and serious harm to dwellings, homes, or persons in the Community (e.g. dangerously unstable steps, decking or handrails), there is a 30-day period to repair.

 

For all other (i.e. non-dangerous) conditions, the minimum period to cure is now 60 days.  As before, the new Form 55 provides a place for landlords and managers to specifically describe the item(s) in need of repair.

 

Trap: If there is imminent risk of harm, and the landlord/manager intends to give the tenant 30 days rather than 60 days, SB 277A requires that they not only describe the item(s) in disrepair, but also describe the potential risk of harm.  There is little question but that the failure to do so would invalidate the notice. The new Form 55 prompts users to describe both the violation and the potential risk of harm.

 

Tip: The new Form 55 contains a prompt at several places to attach additional pages, documents or photos, if doing so would be helpful in identifying the disrepair or deterioration, and the necessary repair. Remember, you cannot expect the tenant to be a mind reader – just because you know the nature of the problem and the appropriate repair, does not mean the tenant is on the same page. If there is any ambiguity in the notice, a court would likely rule in favor of the tenant. Why? Because the landlord/manager filled out the Notice and had the ability at that time to draft it with sufficient clarity. 

Service of the Notice Most landlords and managers are familiar with the various methods of effecting service of notices. However, if in doubt, check the statutes. They are contained at ORS 90.155 (Service or delivery of written notice) and ORS 90.160 (Calculation of notice periods).  You can never be too careful; a notice giving a single day less than legally required, can result in the case being thrown out.

Statutory Definitions. The new ORS 90.632 defines “disrepair” and “deterioration”, and for the most part, they are quoted in MHCO’s new Form No. 55:

 

“Disrepair” means being in need of repair because a component is broken, collapsing, creating a safety hazard or generally in need of maintenance.  It also includes the need to correct a failure to conform to applicable building and housing codes at the time: (a) Of installation of the manufactured dwelling or floating home on the site, or (b) The improvements to the manufactured dwelling or floating home were made following installation on the site.

 

“Deterioration” includes, without limitation, such things as a collapsing or failing staircase or railing, one or more holes in a wall or roof, an inadequately supported window air conditioning unit, falling gutters, siding or skirting, or paint that is peeling or faded so as to threaten the useful life or integrity of the siding. Deterioration does not include aesthetic or cosmetic concerns.

 

Trap:  Note that the definition of “deterioration” refers to “…paint that is peeling or faded so as to threaten the useful life or integrity of the siding.” (Underscore added.)  Before requiring a tenant to paint their entire home, it might be prudent to confer with a qualified painter who, if necessary, would be prepared to testify that the poor condition of the paint would likely threaten the useful life or integrity of the siding (at least as to the affected  area). This could avoid arguments in the future about whether the entire home or structure actually needed to be repainted.  In any event, management should be careful when issuing Form 55 to make sure that: (a) It is not issued for minor repairs bordering on the cosmetic, and (b) Required repairs are not overly burdensome or broad. For example, if one side of the home is exposed to the weather and in need of repainting, there may be little reason to insist that the resident repaint the entire home.

 

Necessary Repairs.  As before, SB 277A requires that management specifically describe what repairs are required to correct the disrepair or deterioration. In the new Form 55 we have included instructions both to the Cause section of form, and also to the Necessary Repairs section. And don’t forget to attach additional pages, documents or photos, if it might be helpful; the more illustrative examples of what is wrong with the home and what repairs are necessary, the less room there is to argue about it later.

 

Right to Extension of Time.  There are three circumstances in which a resident may request an extension of the 60-day compliance deadline. Note however, as discussed above, there is no right to any extension if the adverse condition would pose a risk of serious harm.

                                                                                              

  • Additional 60 days. If the necessary repairs involve exterior painting, roof repair, concrete pouring or similar work, and the weather prevents that work during a substantial portion of the existing 60-day period to cure;
  • Additional 60 days.  If the nature or extent of the correction work is such that it cannot reasonably be completed within the 60-day cure period due to the type and complexity of the work and the availability of necessary repair persons;
  • Additional 180 Days (Six Months). If the disrepair or deterioration existed for more than the preceding 12 months with the landlord’s or manager’s knowledge, or rent had been accepted over that time.

 

Tip: The law requires the tenant to make a written request for an extension of time if it is sought in a reasonable amount of time prior to the last day of the 60-day compliance period. There are two issues, however: (a) How long an extension is the tenant asking for – 30 days, 40, 50, or 60? (b) Obtaining an extension also extends the deadline for compliance.  An oral extension does not nail down the additional time in writing and may not identify the new deadline. Accordingly, landlords and managers should insist on a written request from their tenants and should consider putting in writing: (a) The amount of time granted; and, (b) The new deadline. That way there can be no confusion about the length of the extension and the outside date that compliance must be completed.

 

Issue: Does SB277A contemplate that following the request for a 60-day extension, management may agree to less? Possibly, since new law provides that the need for the extra time must be due to certain conditions that prevent that work from occurring during a substantial portion of the existing 60-day period. If confronted with this situation, management should consult with legal counsel.

Notice of Correction. If the tenant performs the necessary repairs before the end of the compliance date, or extended compliance date, they have the right to give the landlord/manager a written notice that the issues have been corrected. There is no fixed time for management’s response as to whether the repairs have been satisfactorily and timely performed; it is sufficient if it is within a reasonable time following the tenant’s written notice. However, if a tenant gives this notice to management at least 14 days prior to the end of the completion deadline, or extended deadline, their failure to promptly respond is a defense to a landlord’s termination of tenancy.

Sale of Home; Prospective Purchasers. Prior to enactment of SB 277A, Oregon law permitted a tenant to sell their home while the disrepair/deterioration notice was outstanding, permitting the landlord/manager to give a copy of it to the new perspective purchaser, and providing that the sale would not automatically extend the compliance period. Essentially, the new tenant stepped into the shoes of their seller, and became subject to the same notice and time periods.

 

The practical result of this protocol was that as between the tenant and the prospective purchaser, they could negotiate any price reductions for the necessary work, and the new rental agreement would contain a provision requiring that it be completed within the time prescribed in the original notice, or a permitted extension.  That is no longer the case under the new law.

 

SB 277A now provides that at the time of giving a prospective purchaser the application and other park documents, the landlord/manager must also give them the following:

 

  • Copies of any outstanding notices of repair or deterioration issued under ORS 90.632;
  • A list of any disrepair or deterioration of the home;
  • A list of any failures to maintain the Space or to comply with any other provisions of the Rental/Lease Agreement, including aesthetic or cosmetic improvements; and
  • A statement that the landlord/manager may require a prospective purchaser to complete the repairs, maintenance and improvements described in the notices and lists provided.

 

Tip: Note that the new law combines not only ORS 90.632 notices relating to damage and deterioration of the home or structures, but also a list of failures to maintain the space and other defaults, including aesthetic or cosmetic improvements. This may or may not include 30-day curable notices under ORS 90.630 for failure to maintain the space. But in both cases (i.e. defaults relating to structures, and those relating to the space), the new tenant appears to get the six-month period to comply. 

 

This represents and interesting shift in Oregon law, and possibly for the better. Many parks historically gave “resale compliance notices” to tenants who were placing their homes up for sale. However, until now, there was some question whether a landlord could “require” as a condition of resale, that the existing tenant make certain repairs – absent having first sent a 30-day notice.[1] Now, under the new version of ORS 90.632, it appears landlords may make that list, and let the tenant/seller know that unless the work is completed before sale, it will be given to the tenant’s purchaser upon application for tenancy. 

 

So, if the landlord/manager accepts a prospective purchaser as a new tenant, and notwithstanding any prior landlord waivers of the same issue(s), the new tenant will be required to complete the repairs, maintenance and improvements described in the notices and lists.

Under Section (10) of the revised statute, if the new tenant fails to complete the repairs described in the notices within six months from commencement of the tenancy, the landlord “may terminate the tenancy by giving the new tenant the notice required under ORS 90.630 or ORS 90.632.”  This appears to say that a new tenant who fails to complete the items addressed in the notices and lists within the first six months, will thereafter be subject to issuance of a curable 30-day or 60-day notice to complete the required repairs. Accordingly, this is how the new MHCO Form 55 will read.

 

What if the landlord had already given the seller a written notice under one of these two statutes, but the compliance period had not yet run at the time of sale? The new statute does not carry over the unused time to the new tenant/purchaser, since under the new law, they will have received essentially the same information upon application, and will now have six months to complete.

 

Tip: Nonetheless, it is still a good idea to give a detailed 90.632 notice to a tenant before sale. That way, the very same repair issues will be in front of the landlord, existing tenant and prospective purchaser at the same time. It will now become a matter of negotiation between tenant/seller and tenant/buyer as to who will perform the repairs, and when. 

 

Repeat Violations. If one or more of the items that caused issuance of a 30-day or 60-day notice under ORS 90.630 or 90.632 recurs within 12 months after the date of issuance of that notice, the tenancy may be terminated upon at least 30 days’ written notice specifying the violation(s) and the date of termination of tenancy. In such case, correction of the disrepair or deterioration will not prevent a termination of the tenancy.

 

  • As under the prior law, a copy of the disrepair and deterioration notice may be given by the landlord/manager to any lienholder of the tenant’s home.

 

And darestillrequiredtopayrentuptothe

 

  • : If the rent tendered by the tenant covers days that extend beyond the deadline for compliance, or any permitted extension thereof, it should be returned to them within ten (10) days after receipt, pursuant to ORS 90.412(3). This will avoid a waiver of termination of the tenancy described in the notice, should the tenant fail to timely perform the required work. 

 

Conclusion.  Members will see that due to the added complexities of ORS 90.632 (e.g. risk of harm vs. non-risk of harm violations, added detail for explanations, prospective tenant disclosures with application, etc.) the new Form 55 is longer than before. However, despite the added length, we believe it remains user-friendly. 

 


[1] This is because ORS 90.510(5)(i) provides that the rental or lease agreement for new tenants must disclose “(a)ny conditions the landlord applies in approving a purchaser of a manufactured dwelling or floating home as a tenant in the event the tenant elects to sell the home. Those conditions must be in conformance with state and federal law and may include, but are not limited to, conditions as to pets, number of occupants and screening or admission criteria;

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