Phil Querin Q&A: Lease Renewal

Want access to MHCO content?

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

Phil Querin

 

Question:  I have recently revised all of our lease agreements including Oregon, where I have made substantial updates and changes. I understand that by law I have to give renewal notices 60 days in advance of a lease expiration if I want the tenant to continue on the newly proffered lease.I understand that pursuant to ORS 90.545, I am supposed to identify what is different in the new lease from the old one. Due to the number of changes I’ve made, it would be very difficult to identify and list them all. 

I’m wondering if I can just inform the residents that the new lease has numerous updates and that they should read it as if it were a completely new edition. 

 

The only other real option is to offer a redline version which would be so marked up it would be difficult  to read and understand. Can you check to see what would meet the requirements of the notice?

 

 

Answer. ORS 90.545(Fixed Term Tenancies) provides that unless you take action not less than 60 days prior to the end of the term, the lease becomes a month-to-month tenancy on the same conditions as the original lease. 

 

The only exception to this is for the landlord to submit a proposed new lease to the tenant at least 60 days prior to the ending date of the term. Any provisions that are new, i.e. not in the prior lease, are to be summarized in a written statement; the same applies if the landlord is going to create new community rules. Remember, however, that if there are substantive changes to either or both of these two sets of park documents, you may also have to issue a new Statement of Policy under ORS 90.510,[1]which is a summary explanation of certain park policies provided to new and existing residents.

 

If you introduce new lease terms or new rules, they must “(f)airly implement a statute or ordinance adopted after the creation of the existing agreement; or are the same as those offered to new or prospective tenants in the community.”

 

Note, however, that the new lease terms or rules cannot relate to the “…age, size, style, construction material or year of construction of the manufactured dwelling” *** and cannot “…require an alteration of the manufactured dwelling *** or new construction of an accessory building or structure.

 

The tenant must accept or reject the proposed new lease at least 30 days prior to the ending of the term by giving written notice to the landlord.

So, your choice on expiring leases under ORS 90.545 is: (a) To do nothing, in which case the lease morphs into a month-to-month tenancy on the same terms as the earlier lease, or (b) Introduce a new lease and/or rules that “(f)airly implement a statute or ordinance adopted after the creation of the existing agreement; or are the same as those offered to new or prospective tenants in the community.”

You do not have an option to notnon-renew the tenant at the end of a lease term.  This is not to say that you are limited in termination  for cause under: ORS 86.782(6)(c) (foreclosure trustee sale),90.380(5) (dwelling posted asunsafe by gov’t),90.392 (termination for cause),90.394 (termination forfailure to pay rent),90.396 (termination on 24-hour notice),90.398(termination drugs, alcohol),90.405 (termination, unpermitted pet),90.440(termination in group recovery facility)or90.445 (termination for criminalact).  

 

As to the summary, the statute simply says that “(t)he landlord shall include with the proposed agreement a written statement that summarizesany new or revised terms, conditions, rules or regulations.” (Emphasis added.)

 

However, since you will have many changes to the new lease, you ask about two possible alternatives: Either to send the new lease to the tenant: (a) and inform him/her it has numerous updates and they should read it as if it were a completely new edition; or (b) “…offer a redline version which they wouldn’t be able to read.”

 

ORS 90.130 provides:

 

Every duty under this chapter and every act which must be performed as a condition precedent to the exercise of a right or remedy under this chapter imposes an obligation of good faith in its performance or enforcement.”

 

I read that to mean that good faith compliance is satisfactory in this case. Since ORS 90.545 does not elaborate about the written summary, I would opt for an approach that gives you more coverage rather than less. Both of your alternatives, especially (a) standing alone, could be attacked by residents as insufficient since it really doesn’t comply – if the goal is to inform and educate residents about the new changes. Alternative (a) is too little, and (b) is too much.

 

My view is that you don’t have to detail every single change, just the material ones that aid in understanding the nature and scope of the new provisions. Stylistic changes that do not alter the substance of the new text don’t need to be addressed. As to material changes, they should be summarized.

 

I would give the new lease to the residents together with a marked redline showing the material changes.[2]I would then include a distillation of the material changes in the new lease into categories and short summaries.

 

For example:

 

  • Rule No. ___, Late Fees: they are going to increase from X$ to $Y;
  • Rule No. ___, Pets: There will be a fine for pet violations;
  • Rule No. ___, Mediation: Adds mediation rules under the recently enacted SB 586 Sec. 7 et seq. (2019) and provides that Landlord has the duty to mediate if requested by Tenant. See,https://olis.leg.state.or.us/liz/2019R1/Measures/Overview/SB586;
  • Rule No. ___, Occupants: Tenants must now notify manager within X days of the person coming into the park and obtain a Temporary Occupancy Agreement.

 

Be sure the notice invites residents to contact the park manager if they have any questions. I believe this approach meets the spirit and intent of ORS 90.545, and is in good faith compliance with the law.  

 

Lastly, before sending out the notice, enlist the help of someone who is not privy to the changes, and ask them to read your summary. If they understand it (without your coaching), then send. If not, I would re-work the language until it is clear. The goal is to avoid ambiguity in the summary; but if reasonable minds can differ as to the meaning of the new summary, it is, per se’ambiguous, and needs to be clarified before sending.

 

 

 

 

 

 

 

 

 

 

 

 

 

[1]Note that ORS 90.510 was amended by SB 586 (2019) that adds text related to the new laws on mandatory mediation.

[2]If you’re used to using MSWord, you can simply accept the non-material changes, and show just the material ones (both the deleted and new text). Make sure the reader knows that there have been non-material changes that are not marked. Tell them if they want a complete set of marked changes to immediately contact management. (There may be some residents that want more detail rather than less.)

© 2011-2020 Manufactured Housing Communities of Oregon (MHCO)

503-391-4496 | Contact MHCO

MHCO Information Security Policy (2018-20)

Web design and development by Cosmonaut