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Phil Querin Q&A: Major Management Mistakes - Identifying Issues Before They Spiral Out of Control

Phil Querin

Answer: There are several issues that I see repeatedly. Here are a few: 1. Managers not adequately papering their file before taking legal action against a resident. Judges want to see that you’ve “walked the extra mile” with the resident, making every reasonable effort to bring them into compliance. This means starting with a personal conversation with them about the problem and then making notes of the date, time, and matters discussed and the resident’s responses. Next try a note or letter without using a formal termination notice. Only after it becomes apparent that you will have to go the formal route should you do so. 2. Failing to act promptly when a resident violate the rules. Although many things are not waivable, such as maintenance violations, some definitely are, such as unpermitted pets or occupants. When there is a belief that the resident has either an unapproved pet or occupant, the resident should be contacted immediately. With pets (assuming they are not in violation of the rules against breeds, or numbers), you want to promptly get them onto a Pet Agreement. With occupants you should use the Occupancy Agreement and run a background check. (Make sure you don’t require a financial background check, since that is not permitted on occupants – only tenants.) If the resident delays in complying, get a 30-day notice issued and do not accept rent until the matter is resolved. I have seen too many managers accept rent and work for months with the resident, not realizing that they are being lulled into believing the resident will ultimately cooperate – until it’s too late. 3. Failing to properly prepare a notice of termination. Oregon law is very strict when it comes to the preparation of notices. Even the slightest error can be fatal. Make sure you’re using the correct MHCO form [e.g. don’t use a 30-day notice for failure to maintain under ORS 90.630, when you should be using a 30-day notice for repair and deterioration under ORS 90.632.] When you draft the notice, have someone else read it for content and accuracy. Then do so again yourself. If you realize that you sent out an incorrectly prepared notice, send out a corrected one and state that it rescinds and replaces the incorrect one. 4. Accepting residents you have doubts about. Always do a “gut-check.” If you think the applicant would be problematic, look closely at their application and references. While you cannot and should not reject applicants arbitrarily, if they are on the cusp – i.e. you could legitimately accept or reject - give careful consideration to your decision and don’t let it be dictated by your desire to just fill a space. 5. Not understanding the range of solutions when dealing with a residents. By this I mean, don’t just fire out a notice as a knee jerk reaction to a violation. A good example is a resident who is intoxicated and gets into a verbal altercation with another resident. Say it gets out of control, and threats are made by the resident. If this is unusual for the resident and out of character for him, don’t simply send a 24-hour notice. The law is quite clear that you are not to use a 24-hour notice if another form of notice, e.g. a curable 30-day notice would work. Remember, a repeat violation with six months following the date of the 30-day notice gives you the right to terminate with a 20-day non-curable notice. Judges don’t like to terminate manufactured housing residents, given the drastic consequences. You want to show the judge that you were not being heavy-handed, but tried the most rationale and reasonable approach first.

Phil Querin Q&A: Trees - Liability and Responsibility

Phil Querin

Answer: Oregon law addresses tenant responsibilities in ORS 90.740. Subsection (4)(h) says that except as provided in the rental agreement it is the tenant’s responsibility to “(m)aintain, water and mow or prune any trees, shrubbery or grass on the rented space….” In my opinion, this provision is a good example of how not to draft a statute. Trees are not “mowed” and grass is not “pruned.” However, it is correct that “pruning” of trees [whatever that entails] is a tenant responsibility unless otherwise provided in the rental or lease agreement. As with everything these days, the Internet is replete with discussions and definitions of pruning. One example is found here: http://tinyurl.com/Q-Law-Definitions-pruning. Regardless of your reference source, it is clear that there are many, many, different types of pruning, depending upon the goal sought. You can prune to “teach” a tree or shrub how to grow in a particular fashion; you can prune for appearance; you can prune for maintenance, i.e. the health of the tree or shrub. Lastly, you prune for safety - this is called “hazard pruning.” Putting my “lawyer’s hat” on and returning to my law school roots, I recall a rule of interpretation called “ejusdem generis”. Here is one definition: “(eh-youse-dem generous) v adj. Latin for "of the same kind," used to interpret loosely written statutes. Where a law lists specific classes of persons or things and then refers to them in general, the general statements only apply to the same kind of persons or things specifically listed. Example: if a law refers to automobiles, trucks, tractors, motorcycles and other motor-powered vehicles, "vehicles" would not include airplanes, since the list was of land-based transportation.” http://www.legal-explanations.com/definitions/ejusdem-generis.htm Applying that legal rule to ORS 90.740(4)(h), it could reasonably be argued that the words “maintain, water and mow or prune” are intended to refer to normal and routine landscaping activities. In other words, a tenant’s landscaping responsibility for his or her own space is limited to normal and routine activities. In other words, imposing a statutory duty and financial responsibility of “hazard pruning” on manufactured housing residents was unlikely. ORS 90.730(3) provides that “(f)or purposes of this section, a rented space is considered inhabitable if it substantially lacks: (e) At the time of commencement of the rental agreement, buildings, grounds and appurtenances that are kept in every part safe for normal and reasonably foreseeable uses, clean, sanitary and free from all accumulations of debris, filth, rubbish, garbage, rodents and vermin [underscore mine];” Thus, there is little question that as of the commencement of the tenancy, it is a landlord duty to make sure the community grounds, including the spaces and common areas, are safe for “normal and reasonably foreseeable uses….” Is a 40-foot fir tree “safe” at the commencement of the tenancy? Can it be made safe? If it is made safe, e.g. by hazard trimming, will it stay safe for the entire duration of the tenancy? It seems to me that a community landlord has two choices: 1. Doing nothing, and relying upon a poorly drafted statute for absolute immunity when a giant tree falls, killing an entire family during a windstorm; or 2. Envision the Doomsday Scenario – i.e. assume that such a disaster could occur regardless what a poorly drafted statute says, and that a multi-million wrongful death lawsuit will surely be filed by some aggressive plaintiff’s attorney, arguing to a jury that the landlord owns the ground, owns the trees coming out of the ground, and is simply trying to avoid the financial responsibility to thin and top dangerous trees. So my advice would be the following: (a) If you are in doubt about your legal responsibilities because the law is unclear, and (b) where doing nothing could place lives in danger, it is far better to undertake the financial responsibility of hazard pruning on a regular basis. In short, relying upon ORS 90.740(4)(h) when it comes to trimming and topping potentially dangerous trees, could be a serious and costly mistake.

Phil Querin Q&A: Community Owner Providing Tenant Association Information on Residents

Phil Querin

Answer: ORS Chapter 90, the Oregon Residential Landlord Tenant Act, is replete with references to tenant associations. Residents clearly have many rights when it comes to the formation of an association, including the right of assembly and the right to canvass other residents. However, nowhere does the law say that park owners and managers have a legal duty to provide individual contact information to other residents, regardless of the purpose for which it is sought. Here is what ORS 90.750 [“Right to assemble or canvass in facility; limitations”] says on the matter: • No park bylaw, rental agreement, regulation or rule shall infringe upon resident rights to: o Peaceably assemble in an open public meeting for any lawful purpose, at reasonable times and in a reasonable manner, in the common areas or recreational areas; reasonable times are the hours of 8 a.m. to 10 p.m. daily. o To communicate or assemble among themselves, at reasonable times and in a reasonable manner, for the purpose of discussing any matter, including but not limited to any matter relating to the park, or manufactured dwelling living. • The discussions may be held in the common areas or recreational areas of the facility, including halls or centers, or any resident’s home. • However, the landlord may enforce reasonable rules and regulations including but not limited to place, scheduling, occupancy densities and utilities. • A landlord may not prohibit any resident from canvassing other persons in the same facility for certain prescribed purposes. The term “canvassing” includes door-to-door contact, an oral or written request, the distribution, circulation, posting or publication of a notice or newsletter, a general announcement or any other matter relevant to the membership of a tenants’ association. • However, a landlord is not required to permit any person to solicit money, except that a tenants’ association member, whether or not a tenant of the facility, may personally collect delinquent dues owed by an existing member of a tenants’ association. • Lastly, the statute clarifies that it is not intended to require a landlord to permit any person to disregard a tenant’s request not to be canvassed. To me, this last provision suggests an answer to your question, as it acknowledges that some residents may not want to be “canvassed.” In other words, they have certain rights not to be disturbed, and may request management’s assistance in preventing it from occurring. Accordingly, my view is that before contact information is shared by management with other residents, advance consent should be received from each affected person. Without such consent, I would be very hesitant to give out the information. Certainly, the resident seeking the contact information can try to obtain it by going door-to-door and asking for it. If community management already maintains a published directory of residents that contains names and addresses, I suppose consent is implied by the lapse of time, assuming that everyone knows of the directory. But I would not recommend this practice, and certainly would not share the information with other residents. My conclusions are based not so much on some legal duty of “confidentiality” or legally protectable “right of privacy.” With the Internet, it’s hard to say much of our private information is legally protectable any more. My feeling is a practical one: If there is no affirmative legal duty to provide the information, and there is some risk, however remote, that sharing it without advance consent could anger some residents, it is far better to decline your resident’s request. It does not hamper the association formation process in any way, and respects every resident’s privacy, however limited it is today.

Phil Querin Q&A: Resident Over Pays Rent - How to Account for Late Fees

Phil Querin

Answer. It is unclear if there ever was an actual agreement between landlord and tenant that the overpayments were to be applied toward late fees. For purposes of this question, I will assume there was an understanding of sorts [what tenant intentionally overpays, without a reason?], but presumably not in writing; hence, this dispute. The lack of any written agreement invites an argument as to how the credits were to be applied. There is an argument this was “prepaid rent” under ORS 90.100(33) (Definitions). Prepaid rent is a payment for rent not yet due. Prepaid rent is treated much like a security deposit, and must be accounted for at the end of the tenancy. See, ORS 90.300 (Security Deposits; Prepaid Rent). Rent [prepaid or otherwise] cannot be applied to such things as fees or deposits. See, ORS 100(35) (Definitions). In this situation, without a written agreement specifically defining what the prepayments were, and how they were to be applied, I would say the tenant may have an argument that without his consent, the money could not be applied to anything except a rent that is already due. In other words, you may not apply the monies to non-rent charges. The landlord-tenant statutes don’t specifically address this type of situation, so it’s a toss-up whether the practice was legal or illegal. [I assume that your rental agreement specifies whether late fees must be assessed in writing. Typically, no writing is required – the fees just become due within a certain period of time.] In any event, I don’t think this is arrangement is a good practice without having it in writing. In the future, if both landlord and tenant want to continue the practice, it should be in writing and specifically address: (a) What the payments are; (b) When, how and under what circumstances they may be applied; (c) Whether any prior notice and/or written accounting is necessary; and (d) Whether interest will accrue to the tenant for the monies held by the landlord before they are applied.

Phil Querin Q&A: Tree Outside of MHC Damages House inside MHC

Phil Querin

Answer: First, this is not an issue that is addressed – or can be addressed – in our “hazard tree” discussions that the MHCO has been having recently in the landlord-tenant coalition meetings. This tree is not located in the park, so is not strictly a landlord “habitability” issue. However, under certain circumstances it could be. Clearly, community management does not have authority to cross over onto another’s land and cut down the tree – or even trim it. However, if the branches of the tree extend into the community’s airspace, it may legally be trimmed by park management. If it is feasible to do so, and done in a manner that is safe and responsible, it should be done. Park management should consult an arborist before proceeding, in order to avoid trimming that could damage or injure the tree itself. Additionally, the property owner next door should be notified about the fallen limb. This is for two reasons: (a) So the owner can secure his/her own expert advice on what to do to the tree to prevent a reoccurrence, and (b) to notify his/her insurance carrier. Whether the resident has a claim against the park owner is hard to tell without knowing more. If the branch extended into the community and was believed to be a potential problem for some time, but ignored by management, then perhaps there is a claim. But the stronger claim is likely against the owner of the tree itself, especially if it had not been properly cared for as a “hazard tree.” If a claim is asserted against the park owner, he/she should bring a similar claim against the neighbor whose tree it was. Then let the insurance carriers work it out.

Phil Querin Q&A: Abandoned Home with Lots of Deferred Taxes

Phil Querin

Answer: The Department of Revenue (“DOR”) is treated like any other lienholder. It is critical that before the 45-day letter is sent, the park check with the Oregon Department of Consumer and Business Services (“DCBS”) to determine if there are any lienholders on title. We understand that DOR is now showing up on the DCBS records. Remember, if they show up on the record and you fail to give them notice, they could come back against the park for failing to notify them. If they show up on the DCBS records, they should be copied on the 45-day letter, and given all of the same rights as other lienholders, e.g. entering into a one year storage agreement, paying the storage fees, selling the home, etc. Currently, it is our understanding the DOR does not sign and returned storage agreements. If there is a purchase money lien on the property, it will be superior to the DOR and then it [the DOR] will only get payment if there is any equity from the sale. Since the property is worth more than $8,000, if there is no sale, it would go to auction. As a lienholder, the DOR is behind the park, in terms of payment of cost, and then the county tax collector [which presumably is current – thanks to the DOR]. Next, as a lienholder, the DOR would receive some payment. If there are any further proceeds, they would go to the tenant, and if the tenant cannot be located, then to the county fund. If the landlord follows these procedures, there is no remaining liability to the DOR for and of the taxes paid under the program.

Phil Querin Q&A: Renting Home & Documentation

Phil Querin

Answer: This is a good – and important – question. Here are some points to always remember: 1. A resident who is renting the home is not under the manufactured housing section of Oregon’s residential landlord-tenant law (“ORLTA”) which is contained in ORS Chapter 90. This means that you do not treat non-owner residents the same way you would as if they were renting an apartment or home. Landlord and tenant rights, duties and remedies are different, depending upon whether the person renting the space also owns the home. 2. A landlord’s remedies [e.g. for-cause termination, etc.] against a non-owner resident are found in ORS 90.392, 90.394, 90.396, 90.398, 90.403 and 90.405; they are not found in the manufactured housing section of ORLTA, which commences at ORS 90.505. 3. Similarly, you do not want to use a standard manufactured dwelling space rental agreement for a non-owner resident. However, due to the number of park-owned homes, MHCO has developed a space rental agreement for tenants who do not own the home. You should use it. If you use MHCO’s standard manufactured home space rental agreement for persons owning their home, you will be contractually giving the non-owner resident greater rights than you would otherwise need to do. For example, the “cure period” for violations is much shorter for non-owner tenants – because they only need to vacate with their personal property. They do not need to move a home. If they owned the home, they would have a 30-day right to cure under ORS 90.630. This means that you will have to use a different, non-MHCO form for rules violations by non-owner tenants. 4. However, the eviction process, i.e. the filing and service of an FED Complaint under ORS 105.105, et. seq, is the same. That is, the process of the “first appearance,” trial settings, etc. is exactly the same. 5. Importantly, since the park owns the home, the park is the “landlord.” This means that it must provide inside the home certain safety measures that ORLTA requires of landlords, such as smoke detectors and [if there is a carbon monoxide source] a carbon monoxide detector. Some counties require a carbon monoxide detector in all cases, even if there is no carbon monoxide source, e.g. a gas fireplace. Go to the State Fire Marshall’s site for more information on these important issues.

Phil Querin Q&A: Additional Government Fees

Phil Querin

Answer. First, one caveat: This Answer is not intended to constitute legal advice. It is educational only, and should not be relied upon by an MHCO member in lieu of consulting their own legal counsel, who is familiar with their own specific factual situation. Let’s start with a definition of a “utility” under Oregon’s Residential Landlord Tenant Act. Like all legislation coming out of Salem, there is no easy answer. The statute is found at ORS 90.315. I will try to summarize the relevant portions for purposes of this Answer: Oregon Law. 90.315 Utility or service payments; additional charges; responsibility for utility or service; remedies. • A “Utility or service” includes but is not limited to electricity, natural or liquid propane gas, oil, water, hot water, heat, air conditioning, cable television, direct satellite or other video subscription services, Internet access or usage, sewer service and garbage collection and disposal. [Italics mine. PCQ] • A landlord must disclose to the tenant in writing at or before the commencement of the tenancy any utility or service that the tenant pays directly to a utility or service provider that benefits, directly, the landlord or other tenants. A tenant’s payment for a given utility or service benefits the landlord or other tenants if the utility or service is delivered to any area other than the tenant’s dwelling unit. [Italics mine.] o If a landlord knowingly fails to disclose such payments, the tenant may recover twice the actual damages sustained or one month’s rent, whichever is greater. • A utility or service charge may only include the cost of the utility or service as billed to the landlord by the provider. o A landlord may add an additional amount to a utility or service charge billed to the tenant if: • The utility or service charge to which the additional amount is added is for cable television, direct satellite or other video subscription services or for Internet access or usage; • The additional amount is not more than 10 percent of the utility or service charge billed to the tenant; • The total of the utility or service charge and the additional amount is less than the typical periodic cost the tenant would incur if the tenant contracted directly with the provider for the cable television, direct satellite or other video subscription services or for Internet access or usage; • The written rental agreement must describe the additional amount separately and distinctly from the utility or service charge; and • Any billing or notice from the landlord regarding the utility or service charge lists the additional amount separately and distinctly from the utility or service charge. • A landlord may not require a tenant to agree to the amendment of an existing rental agreement, and may not terminate a tenant for refusing to agree to the amendment of a rental agreement, if the amendment would obligate the tenant to pay an additional amount for cable television, direct satellite or other video subscription services or for Internet access or usage. • A utility or service charge, including any additional amounts added pursuant to the provisions immediately above, is not rent or a fee. • Nonpayment of a utility or service charge is not grounds for termination of a rental agreement for nonpayment of rent, but is grounds for termination of a rental agreement for cause. • If a landlord fails to comply with the paragraphs above regarding disclosure of the additional charges, the tenant may recover from the landlord an amount equal to one month’s periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater. Without getting into a detailed discussion of the pass-through laws contained in ORS 90.531 – 90.530, suffice it to say that subject to several limitations, park landlords are permitted to pass through utility and service charges to their tenants. So assuming that the landlord’s pass-through program was legally implemented and is legally described in the written rental agreement, the issue is whether the City of Gresham’s “Public Safety Fee” constitutes a “utility or service,” as described in ORS 90.315(1)(b), which provides that it includes but is not limited to: “…electricity, natural or liquid propane gas, oil, water, hot water, heat, air conditioning, cable television, direct satellite or other video subscription services, Internet access or usage, sewer service and garbage collection and disposal.” Clearly, the statute, by its own terms, says that a “utility or service” can include more than what is described above. Unfortunately, it gives no guidance as to what that might be. A quick online check of Oregon definitions, seem to presuppose a “public utility”; e.g. sewer, water and electricity. How, the definition of “utility” is much more generic, i.e. “something useful.” Moreover, we can see from the examples given in the ORS 90.315(1)(b), that several are not publicly owned. And the word “service” is so open-ended as to defy a specific definition, other than “something provided.” Accordingly, the definition of a “utility or service” is not rigidly defined by ORS 90.315, and, depending on the circumstances, can include charges for “useful things or services” imposed by a government body, even though they were not specifically enumerated in ORS 90.315(1)(b). City of Gresham’s Explanation. Now let’s look at the City of Gresham; how do they describe it and what is it intended to do? On its website explaining the fee, the City goes to great lengths to call it “temporary.” It is a single line-item that is added to customers’ water bills. It appears under the heading “Residential Utility Charges.” The Gresham website explanation of the fee is the following: “The temporary Police, Fire and Parks Fee *** goes into effect Feb. 1 for single-family households, multifamily property owners and businesses to help maintain essential police positions and keep our fire stations open. The per-unit fee was shaped by a public input process in 2012 and includes a phase-in for multifamily properties.” The website’s FAQs add the following points: • 95% of the fee proceeds will be used to support public safety services. The remaining five percent will go toward Parks. • Whether or not the fee will be passed on to a tenant will be determined by the lease or rental agreement. • Financial assistance is available to those who qualify. A rental assistance program has been created to help low-income families and individuals pay the fee. Contact Human Solutions at 503-548-0200. The City offers an assistance program that provides emergency funds to help qualified utility customers that are experiencing financial hardship. Apply for the utility bill assistance program at 503-618-2373. Non-profit housing providers who own and operate multifamily properties that are restricted as low-income housing by a recorded regulatory agreement or by the Office of Housing and Urban Development may be eligible for assistance. For more information contact Rachael Fuller at 503-618-2255 or Rachael.Fuller@GreshamOregon.gov. • Owners of multifamily properties will be charged the fee per unit in the building. However, those with more than three units have been granted a gradual phase-in period. These property owners will pay: A 4.1% vacancy discount will be applied to the fee for all multifamily development. Multi-family property owners will pay: o $2.50 per unit for February-March o $5 per unit for April-May o $7.50 per unit from June 2013-June 2014 Conclusion. I have not conducted an in-depth evaluation of this issue or the law. Subject to that limitation, it appears to me that a good argument can be made that the Public Safety Fee is either a utility or a fee, and as such, may be properly passed through to community residents. And since it is a prorated flat fee, it cannot be said to benefit other tenants or the landlord. If and when passed through, it should certainly be explained to the residents, and appear as a separate line item on their invoice.

Phil Querin Q&A: Thirteen Year Old Boy Grows Up - Resident WIthout a Background Check

Phil Querin

Answer: This is an issue that the Oregon Residential Landlord Tenant Act (“ORLTA” or the “Act”) is not fully equipped to address. Nowhere in the Act is there a clear answer. But connecting some dots, I think we can arrive at a logical answer. • Technically, the 18-year old is not a tenant under the manufactured housing park (“MHP”) side of the Act, since he does not “own” the home. At best, he is a “tenant” under the non-MHP side of the law – he could be considered a month-to-month tenant, and therefore subject to the 30-day right of termination by the landlord. Assuming this, what is the landlord to do? First, do the rules permit subleasing? If not, he could be compelled to leave. • Second, rent should not be accepted from him until this situation is clarified and a solution reached. • Third, if the landlord is willing to accept the 18-year old under these circumstances (i.e. assuming he goes into title), he could be offered a monthly tenancy, subject to his qualifying under the community rules, etc. which, of course, require the background check, etc. • Lastly, again assuming the landlord is willing to accept him, a guarantee by the parents might be in order. • Keep in mind that since he was not a signatory to the original rental agreement since he was a minor, the fact that he is the only person remaining at the home, technically makes him an authorized occupant that has not yet been approved by park management. This is your strongest card, and you should use it to fashion the solution that best fits your needs. All of these things require some legal guidance, but the answer to the above question is that the landlord, by acting carefully, should be able to protect his position and either require the 18-year old to vacate or qualify in all respects as a new resident (assuming he goes into ownership of the home). In all cases a background check is not only appropriate, but essential.

Phil Querin Q&A: Rules Violation - 30 Day - 20 Day - OR 3 -Strikes

Phil Querin

Answer: It’s easy to get confused. There is a lot to remember. Generally all of the answers are contained in ORS 90.630 [Termination by landlord; causes; notice; cure; repeated nonpayment of rent]. Here is a short summary: • The landlord may terminate a rental agreement that is a month-to-month or fixed term tenancy in a manufactured housing community by giving not less than 30 days’ notice in writing before the date designated in the notice for termination if the tenant: o Violates a law or ordinance related to the tenant’s conduct as a tenant, including but not limited to a material noncompliance with ORS 90.740 [Tenant Obligations]; o Violates a rule or rental agreement provision; o Is determined to be a predatory sex offender under ORS 181.585 to 181.587; or o Fails to pay a (i) a late charge pursuant to ORS 90.260; (ii) A fee pursuant to ORS 90.302; or (iii) a utility or service charge pursuant to ORS 90.534 or 90.536. • The tenant may avoid termination of the tenancy by correcting the violation within the 30-day period specified in notice of violation. However, if substantially the same act or omission recurs within six months after the date of the notice, the landlord may terminate the tenancy upon at least 20 days’ written notice specifying the violation and the date of termination of the tenancy. In such cases, the tenant does not have a right to correct the violation – and the notice must so state. • Oregon’s “three strikes” law only applies to cases in which the tenant is issued three 72-hour [or 144-hour] notices within a 12-month period. The “three strikes” law is found at ORS 90.630(8)-(10). As noted above, multiple violations of the same or similar rule within six months can result in the landlord’s issuance of a non-curable 20-day notice to the tenant.