Q&A on New Mediation Law

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Bill Miner

 

Introduction and Background

SB 586 was developed by the Manufactured Housing Landlord/Tenant Coalition during 19 meetings (each of approximately 3 hours) from September 2017 through February, 2019. There are several pieces to SB 586; however, this Q&A focuses on the limited mandatory mediation policy together with the $100,000 annual grant the Legislature has authorized be allocated to the Oregon Law Center to assist manufactured and floating home tenants with understanding and enforcing the Oregon Residential and Landlord Tenant Act.

As was reported by Chuck Carpenter during the Legislative session, the goal from MHCO’s perspective, was to use the coalition to get the best possible result considering the political landscape in the Legislature. Bluntly, some of the original ideas proposed by the tenants in the coalition were quite onerous. The end result, however, is a true compromise that is favorable to MHCO landlords, all things considered.

If you would like to learn more about these issues and/or you have particular questions, please join me for my presentation at the 2019 Annual Conference in October. In the meantime here are 16 questions and answers that will get you started.

1. What does mediation mean? Mediation is an alternative dispute resolution process that is different from going to court and having a judge (or jury) pick a winner and loser by determining the facts and applying the law to the facts. Mediation is also different from arbitration. At an arbitration, the parties typically pick a person (usually an attorney) to act like a judge and determine the facts and apply law. At an arbitration there is also a winner and a loser. 

 

In mediation, the parties typically pick a third party neutral who will meet with the parties to help them find a solution to resolve a dispute. Because mediation requires the agreement of the parties to come to a resolution, it is not always successful. Mediation does not limit a party’s ability to file a lawsuit or arbitration.

 

In my experience, the cases that resolve at mediation are where bothparties come with an open mind, are willing to listen and can consider compromise in order to avoid the cost and hassle of litigation. 

 

In my experience, the cases that don’t resolve are usually because one of the parties has unrealistic expectations or opinion of their case, or that the matter should move forward based on “principle.” 

 

 

2.   When is mediation required? Mediation is required for any non-exempt issues (see question 3) involving compliance with the rental agreement or non-exempt conduct of a landlord or a tenant within the facility. Please note that a facility is a manufactured home park or a floating home marina. Mediation can be initiated regarding a non-exempt dispute between a landlord and a tenant or between two or more tenants. Note that if the dispute is between two or more tenants, mediation must be initiated by the landlord. 

 

3.   What types of disputes are exempt (i.e. not subject to mediation)? The following disputes are not subject to mediation:

 

(a) Facility closures consistent with ORS 90.645 or 90.671; 

(b) Facility sales consistent with ORS 90.842 to 90.850; 

(c) Rent payments or amounts owed, including increases in rent consistent with ORS 90.600;

(d) Termination of tenancy pursuant to ORS 90.394 (failure to pay rent), 90.396 (24 hour notices), or 90.630(8) (three strike provision); 

(e) A dispute brought by a tenant who is alleged to be a perpetrator of domestic violence, sexual assault or stalking under ORS 90.445 when the dispute involves either the allegation or the victim of domestic violence, sexual assault or stalking; 

(g) A dispute involving a person not authorized to possess a dwelling unit as described in ORS 90.403; or 

(h) A dispute raised by the landlord or tenant after the tenancy has terminated and possession has been returned to the landlord (including ORS 90.675 (abandonments). 

 

4.   How is mediation initiated? Mediation maybe initiated by a tenant or a landlord. If a tenant or landlord initiates the mediation process, then the parties are required to participate (but see questions 7 and 8 below). If there is a dispute between or among tenants, a landlord mustinitiate mediation.  

 

5.   What if mediation is not currently included in my rental agreement? A landlord and/or tenant is required to mediate regardless of whether a rental agreement currently provides for mediation. If a rental agreement does not currently have such a process, SB 586 requires a landlord to unilaterally amend the rental agreement to include mediation. Specifically, ORS 90.510 (5) (what is required to be included in rental agreements) is amended to include in a rental agreement a section for mandatory mediation of disputes that states: “that the tenant or the landlord may request mandatory mediation of a dispute that may arise concerning the rental agreement or the application of this chapter, and the process by which a party may request mediation, including a link to the web site for the Manufactured and Marina Communities Resource Center with additional information about mandatory mediation of disputes.”

 

 6.  Who facilitates a mediation? Mediation may be requested through either: (1) Manufactured and Marina Communities Resource Center (“MMCRC”); or (2) a local Community Dispute Resolution Center (“CDRC”); or (3) a mutually agreed-upon and qualified mediator. Each party must cooperate with the CDRC or designated mediator in scheduling a mediation session at a mutually agreeable day and time, within 30 days of the initiation of mediation. Each party must attend at least one mediation session. 

 

7.   Who has to participate in the mediation (i.e. does it have to be the owner)?  A landlord can designate a representative to participate in the mediation on the Landlord’s behalf (including a non attorney). The representative, however, must have the authority to resolve the dispute in the mediation.  Note that a tenant can also designate a representative.

 

8.   Do I have to reach an agreement in the mediation?  No.Neither party is required to reach an agreement in a mediation. Each party must attempt to mediate the dispute in “good faith.”  The law specifically says that the parties are not required to: (1) reach an agreement on all or any issues in the mediation; (2) participate in more than one mediation session; (3) participate for an unreasonable length of time in a mediation session; or (4) participate if the other party is using the mediation to harass the party or is otherwise abusing the duty to meditate.

 

9.   What would happen if a party failed to meditate in good faith? If a party fails to meditate in good faith by abusing the right to require mediation or uses mediation to harass the other party, the aggrieved party may recover an amount equal to one month’s rent from the violating party. Please note that this is a two way street. In addition, the other party has a defense to any claim brought by the violating party over the dispute involved in the mediation request, and may have the claim dismissed.

 

10.Can I use an admission in mediation at a subsequent trial? Conversely, can something I say be used against me? No. Mediation, and what is said during mediation, is confidential. Any statement made in a mediation is inadmissible. The purpose is to have an honest dialogue in order to encourage a settlement. Additionally, a mediator cannot be called as a witness.

 

11.Can a tenant request a mediation after I send them a termination of tenancy notice?

Mediation can be requested after a notice terminating tenancy has been sent to a tenant, but only if the request is made to MMCRC or a designated mediator and a written confirmation of that request is delivered to you (the landlord) beforethe landlord files an action for possession under ORS 105.110. If the tenant delivers a notice requesting mediation before a landlord files an eviction action, the landlord may not file such action until after the mediation process concludes. If a landlord delivers a notice requesting mediation before a tenant files an action regarding a dispute, the tenant may not file such action until after the mediation process ends

 

12. Can I still accept rent during the mediation process?  YesNotwithstanding ORS 90.412, acceptance of rent or performance by a landlord after either party requests mediation and during the mediation process does not constitute waiver of the landlord’s right to terminate a tenancy following the mediation. Acceptance of rent or performance after the mediation process ends may constitute waiver. Additionally, all statutes of limitations are suspended during the mediation process. 

 

13.What happens after the mediation? If a mediation is successful, the parties should come to an agreement that resolves the dispute. The question is how enforceable is the agreement. Enforceability will depend upon the issues involved, the terms and how the agreement is drafted. I would encourage you to discuss with your legal counsel strategies on how to make the most of a mediation.For example, if an eviction action has already commenced, you may want to attempt to make the agreement a part of the ORS 105.148 mediation/agreement process. Another example is setting up an enforcement mechanism within the agreement itself.  

 

The CDRC or the designated mediator shall notify MMCRC of the successful or unsuccessful outcome of the mediation. The parties and the CDRC or mediator are not required to give a copy of any mediation agreement to MMCRC.

 

If a mediation is not successful, the parties may continue on the path they were on before the mediation. 

 

14.This sounds expensive, who is paying for it?Mediations will be performed by the existing network of CDRC mediators, funded by the existing annual assessment already paid by tenants ($10, collected with property tax assessments).  If the parties choose a private mediator, then the parties will have to determine how that mediator is paid. Additionally, the current annual fee paid by park landlords ($25 for parks of 20 spaces or fewer, $50 for larger parks) is doubled.

 

15. Very interesting (as always), Bill, but what’s this about $100,000 annual grant to the Oregon Law Center?As you may be aware, some states have allocated substantial funding to their state’s Justice Department or to create a team of private attorneys general to assist with enforcement of tenant rights. Similar systems were originally proposed by the tenants during coalition meetings and were strongly opposed by the landlord group. The ultimate compromise was a limited $100,000 per year grant to be given to the Oregon Law Centerto employ oneattorney to provide direct legal services to statewide park and marina residents on matters arising under the Oregon Residential Landlord Tenant Act.

 

16.Is mandatory mediation and the $100,000 per year in perpetuity? No. Both elements have a four-year sunset. An advisory committee has been created to monitor both elements, consisting of equal numbers of landlord and tenant representatives to present a report on the status of both elements to the 2021 and 2023 Legislatures to determine whether they should be renewed.

 

17. When does all of this go into effect? The effective date of SB 586 is January 1, 2010.

 

 

 

 

 

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