Answer.Under SB 608 rent increases are limited to 7% plus the September-to-September average change in the CPI, for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor in September of the prior calendar year (“the CAP”)
To increase rent on a month-to-month tenancy, the Landlordmust:
• Give 90-days’ advance written notice (MHCO Form 49)
• Increases may not exceed theCAP.
• Note: For manufactured housing communities in the City of Portland, Ordinance 30.01.085 provides for the payment of Relocation Assistance for tenants when the rent increase is 10% or more.
The writtennotice must state:
- Amount of rentincrease;
- Amount of the new rent (i.e. total of old rent plusincrease);
- Facts supporting the Exemption,if the increase is above the CAP; and
- The date on which the increase becomes effective.
No later than September 30th of each year, the Oregon Department of Administrative Services (“the Department”) is required to calculate the maximum annual rent increase percentage under theC AP for the following calendar year as seven percent (7.00%) plusthe September annual 12-month average change in the in the CPIas most recently published by the Bureau of Labor Statistics of the United States Department ofLabor. For the calendar year 2021 that figure is 9.2% (i.e. 7.00% + 2.20%).
To your question as to whether the effective date of the rent increase amount is based on when the notice was sentor when it became effective, I view this as largely academic, since the “annual 12-month average change” is based upon a calculation of the percent change relative to the previous July through August. Thus, the maximum rent CAP of 9.20% will apply to the calendar year 2021, beginning on January 1, and will be known 90 days before January 1, 2021. If the notice is hand-delivered, or nailed and mailed on October 1, 2020, it would be both legal when sent, and legal when it became effective.
If your rent increase was over the correct maximum figure of 9.20%, but failed to set forth the facts supporting your exemption, you would be in violation of the CAP, which could make you liable to the tenant for 3X the monthly rent, plus actual damages, costs and attorney fees. Also, being wrong would invalidate your increase notice.
A landlord is not subject to theCAPwhen:
- New Construction. (“The first certificate of occupancy for the dwelling unit was issued less than 15 years from the date of the notice of the rent increase”); or
- Federally Subsidized Rent. The landlord is providing reduced rent to the tenant as part of a federal, state or local program orsubsidy.
- Any increases abovethe CAP must set forth the facts supporting theexemption.
- Violation of the CAP without an exemption makes landlord liable for 3X the monthly rent, plus actual damages suffered bytenant.
But if sent regular mail, the earliest effective date of the increase would be 93 days hence, so to be effective on January 1, 2021, it would have to be mailed before October 1, 2020. Whether the CAP figure would be available in late September would depend on the Department’s publication date. I still believe the Notice would be effective if mailed 93-days in advance of January 1, 2021, since it was legal on the effective date of the increase.