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Phil Querin Q&A: Rent Increases With Legislative Action Pending (90-Day Rent Increase Notices Sent Before 2023 Legislation Becomes Law)

Phil Querin

90-Day Rent Increase Notices Sent Before 2023 Legislation Becomes Law

 

Question:  All indications are that the 2023 legislature is going to revisit the rent increase formula currently in effect, and once passed it would likely become law immediately upon the Governor’s signature. How can landlords deal with having already issued a September 2022 90-day rent increase notice if the 2023 rent cap is legislatively reduced before the landlord’s previously-issued September 2022 increase goes into effect?

 

Answer: Currently, ORS 90.600(2)(b) limits rent increases to 7% plus CPI (“Cap”) for any 12-month period. For 2023 that resulted in a Cap of 14.6%.[1] This amount surprised some, and we can fully expect the Oregon Legislature to pass a new law that could effectively reduce the Cap.

 

Note, that I do not read the law to limit rent increase after the first year of a month-to-month tenancy to only once per year – so long as the annual Cap is not exceeded in total. However, I believe that rent increase are generally limit to one-a-year by most Oregon MHP landlords.

 

Note also, that since ORS 90.600 only applies to periodic tenancies, i.e., month-to-month, the Cap does not apply to rent formulas in leases, i.e., fixed term tenancies. However, it has been my understanding that this was a legislative oversight in 2019; if so, the 2023 Legislature may change that, as well.

 

Currently, the text of ORS 90.600 provides that the landlord may not increase the rent (a) without giving each affected tenant notice in writing at least 90 days prior to the effective dateof the rent increase; and (b) during any 12-month period, in an amount greater than seven percent plus the consumer price index above the existing rent.

 

My reading of this is that so long as the rent does not exceed the Cap during a particular year – there is no limit on when the notice of 90-day increase may be issued. To put it another way, “increasing the rent” is not the same as “giving notice” of an increase in rent. There is no restriction against the frequency of the notices, just increases that exceed the applicable Cap.

 

For example, say word was out that the 2023 Legislature was going to dramatically reduce the Cap going forward. In my opinion, a landlord having already issued a 90-day rent increase notice in September 2022, effective January 1, 2023 (or later) would have two choices:

  1. Rescind the 2022 notice before it becomes effective, and re-issue a new 90-day notice for a different rent effective in 2023, so long as it was done before the effective date of the new legislation and did not exceed the 2023 Cap establish in 2022.

 

  1. Don’t rescind the earlier 2022 notice but issue a second rent increase notice that does not, in total, exceed the 14.6% Cap - so long as it is issued before the new 2023 legislation becomes effective.[2] Caveat: The 2-notice approach needs to make sure that the rental agreement or other park docs don’t limit increases to one per year.

 

Note that for both Nos. 1 and 2 above, the rent increase notice cannot be sent to any tenants who still have rent payments due on their first year of tenancy (including occupancy that may have preceded the signed rental agreement).

 

SB 608, the 2019 law amending ORS 90.600 and creating the Cap, applied to “rent increase notices delivered on or after the effective date of this 2019 Act.” In other words, the Legislature did not attempt to retroactively (and likely illegally) interfere with a rent increase that had already been issued before SB 608 went into effect.

 

Following that logic, should a landlord wish to rescind a 2022 90-day rent increase for 2023 and reissue a different one, it should be entirely legal so long as it is issued before the effective date of the legislation creating a new Cap.

 

Caveat: Landlords should check with their own legal counsel before rescinding any 2022 90-day notices or reissuing a second 90-day notice for 2023 rents under the 14.6% Cap.

 

 

[1] https://www.multifamilynw.org/news/2023-oregon-maximum-rent-increase-is-146

[2] For example, a 5.00% increase notice issued in September 2022 and a second notice for something less than 9.6% issued before the 2023 legislation becomes effective.

MHCO Article: Illegal Immigration and Fair Housing Liability

MHCO

Illegal immigration is a touchy and politically charged subject. It’s also an issue that many landlords in America need to address on a daily basis. There are approximately 11.5 million undocumented aliens living in this country, according to U.S. Census Bureau estimates. Because the vast majority of these people don’t own a home, they must look to the rental market for their housing. So, landlords need to be aware of the legal implications of leasing to them.

The Pros & Cons of Leasing to Undocumented Aliens

Because they constitute a major part of the rental market in some parts of the country, categorically refusing to rent to undocumented aliens or even asking about immigration status may impair your rental business. It may also expose you to risk of liability under fair housing laws. This is especially true if the aversion is based on stereotypes about immigrants. Landlords may shy away from leasing to undocumented aliens based on stereotypes about their being unlikely to work hard and pay rent diligently.  

On the other hand, in some states and municipalities, you can get into trouble if you do knowingly lease to undocumented aliens. You may also encounter difficulties if you do seek to hold such tenants legally accountable when rental or other disputes arise. “An undocumented alien has a much greater chance of being judgment-proof,” a Maryland attorney explains. “The landlord’s toolbox for collecting a judgment is neutered since there’s no bank account or legal job generating paychecks to garnish.” And if the state or municipality makes it illegal to rent to undocumented aliens, the landlord will want to avoid going to court in an eviction situation.  

While there are no easy or absolute answers, the legal principles that landlords must understand to navigate this dilemma. Specifically,  the fair housing implications of leasing—and not leasing—to undocumented aliens and non-U.S. citizens. 

 

WHAT DOES THE LAW SAY?

The federal Fair Housing Act (FHA) makes it illegal to discriminate on the basis of race, color, religion, sex, familial status, national origin, or disability. The vast majority of undocumented alien discrimination cases involve exclusion of people who aren’t legal citizens of the U.S. The question: Is this legal?

Damned If You Do: How the FHA Applies to Undocumented Aliens

Notice that citizenship and immigration status aren’t on the list of FHA “protected classes.” In January 2003, the U.S. Department of Housing and Urban Development issued a memo clarifying that the FHA “does not prohibit discrimination based solely on a person’s citizenship status.” Nor does the law bar discrimination based on “immigration status or resident alien” status, the HUD memo adds. In other words, people who are in this country illegally can’t sue for discrimination under the FHA if that’s the sole reason they experience discrimination.  

However, there’s more to the story. Undocumented aliens and non-U.S. citizens who get excluded may have valid grounds to sue for other forms of discrimination, including religion, race, and especially national origin. Rule: FHA protections extend to every person in the U.S., regardless of their immigration or citizenship status. Stated differently, a person doesn’t have to be a U.S. citizen to sue for discrimination.

Example: A Virginia townhouse community rejected a resident alien couple because they weren’t U.S. citizens. The couple sued, and the federal court ruled that they had a valid FHA claim for national origin discrimination. A citizenship requirement may be part of a wider scheme to exclude persons based on their national origin, the court reasoned [Espinoza v. Hillwood Square Mut. Ass'n, 522 F. Supp. 559 (E.D. Va. 1981)].

Of course, the same principles could apply to other protected classes. Thus, for example, a citizenship requirement may also constitute discrimination on the basis of race, color, religion, sex, familial status, national origin, or disability.

Refusing to rent to non-U.S. citizens may also violate other federal civil rights laws. For example, people who aren’t U.S. citizens may be permanent legal residents with “Green Cards” who enjoy nearly all the same rights as citizens to live and work in the country.

In addition to federal laws, landlords must comply with any stricter requirements under state and local fair housing laws. And immigration status is a protected class in some states and municipalities. For example, California makes it illegal to inquire into an applicant’s immigration status; New York City bans discrimination on the basis of “alienage or citizenship status.”

DEEP DIVE

Anti-Harboring Laws

Federal and some states’ immigration laws make it a crime to “harbor” undocumented aliens. However, most courts have ruled that the laws don’t penalize landlords for simply renting housing to people without regard to their immigration status.

Example: In February 2017, a Texas federal appeals court ruled against two landlords who were willing to rent to persons regardless of immigration status but feared they might be prosecuted for “harboring” illegal aliens under state law. The lower court agreed and issued a temporary ban on Texas’s enforcement of the law. But the appeals court lifted the ban and dismissed the case, saying there’s a distinction between “harboring” and simply renting to an undocumented alien [Cruz v. Abbott, February 2017].

Damned If You Don’t: The Liability Risks of Not Screening Applicants’ Immigration/Citizenship Status

Here’s where things get tricky. While screening on the basis of immigration or citizenship status is problematic for conventional housing, it’s actually required for some forms of federally assisted housing. Thus, for example, landlords participating in the Section 8 program are obligated to ask and confirm that applicants and tenants are permanent U.S. citizens or hold some other lawful immigration status.

There are also states and municipalities where landlords are required to verify applicants’ immigration status or face severe penalties, including stiff fines and loss of their business license to operate.

Bottom Line: It’s crucial to consult an attorney and be aware of the fair housing requirements of your particular jurisdiction in determining your policies and protocols for screening and leasing to immigrants.

7 RULES FOR AVOIDING DISCRIMINATION AGAINST IMMIGRANTS

Once you sort out the basic legal landscape, you need to establish clear policies on leasing to undocumented aliens and train your leasing and management staff to implement them consistently. Here are the seven rules to cover in your training.

Rule #1: Ensure Nondiscriminatory Justification for Citizenship Screening

Technically, unless you live in a state or municipality that prohibits it, screening applicants’ citizenship and/or immigration status isn’t illegal; it might even be required. However, there are risks you must avoid if you adopt such a policy.

First, you need a legitimate, nondiscriminatory and documented business justification for making citizenship or immigration status a qualifying criterion. Doing it because the law requires it is one example. But also keep in mind that the vast majority of undocumented aliens in the U.S. belong to a minority racial, religious, and/or nationality group. Accordingly, stereotypes about undocumented aliens being troublemakers or not paying rent open the door to discrimination on the basis of religion, race, and national origin. Thus, for example, refusing to rent to immigrants because they “can’t keep a steady job” may be deemed a pretext for excluding certain nationalities, particularly in properties located near the Mexican border or on the West Coast where there are large numbers of Asian immigrants.

Rule #2: Apply Screening Policy Consistently

Whatever screening approach you adopt, you must apply it consistently. Just having a principled and justified policy requiring rental applicants to verify their U.S. citizenship won’t protect you if you follow it in some cases but not others. The 2003 HUD memo uses the following example to illustrate the fair housing liability risks of an inconsistent citizenship or immigration status screening policy.  

Example: A person from the Middle East applies for an apartment. Because he’s from the Middle East, the landlord requires him to provide additional information and forms of identification and refuses to rent him the apartment. Later, somebody from Europe applies for an apartment at the same complex. Because the person is from Europe, the landlord rents him the apartment without making him complete additional paperwork or verify the information on the application and rents the apartment. This would be disparate treatment on the basis of national origin.  

Implementation Strategy: The only way to ensure the consistency necessary for compliance is to have clearly written policies that explain why you screen for citizenship and/or immigration status along with procedures and protocols for implementing them. What you must guard against, above all, is allowing leasing staff to ask questions or make decisions about whether to screen particular applicants based on their appearance, accent, apparel, etc.

Rule #3: Ask for the Right Kind of Proof

If you do decide to screen for citizenship and/or immigration status, you need specific procedures and protocols to do it properly. You don’t have to take applicants at their word and have the right to request information enabling you to verify their status. Again, consistency is the key. If you ask one applicant for documentation, you must ask all applicants for it. You must also be careful to request the right information. Acceptable proof depends on whether you’re seeking to verify an applicant’s status as a citizen, immigrant, or nonimmigrant:

  • Citizenship: Acceptable proof of U.S. citizenship includes a valid current U.S. passport, birth certificate, or certificate of naturalization;
  • Legal immigrant: Proof of legal immigrant status—that is, noncitizens who have the right to permanently remain in the U.S., include a Permanent Resident Card (a.k.a., “Green Card”) and an official Social Security number;
  • Legal nonimmigrants: Legal nonimmigrants are persons who are allowed to be in the U.S. on a temporary basis for specific reasons. Such applicants should have a non-U.S. passport from their native country along with a Form I-94 (a.k.a., Arrival Departure Record, or Entry Permit listing when they entered the U.S. and how long they have a right to stay). They also need a visa, such as an F-1 visa for students, unless they’re from one of the countries that has signed a visa waiver agreement with the U.S.

Rule #4: Apply Your Normal Screening Standards to Immigrants

There’s no rule requiring landlords to make special concessions for applicants based on their citizenship or immigration status. In other words, you may require verification of identity (such as a driver’s license, passport, or other form of government ID), financial and rental history, and other legitimate qualifications that you use to screen any other applicant.

It’s standard practice to ask applicants for Social Security numbers (SSNs). This is okay, especially since many screening companies require an SSN to perform tenant screening, such as credit and criminal background checks. But don’t automatically reject applicants because they don’t have SSNs. Explanation: Not having an SSN doesn’t necessarily mean the applicant is in the country illegally. Noncitizens need to get SSNs only if they want to work in the U.S. And tenant screening companies may still be able to vet their qualifications even without an SSN using alternative information, such as the applicant’s name, date of birth, and last known address.

Also, note that unauthorized immigrants may obtain drivers’ licenses in at least 16 states and the District of Columbia (California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, New Mexico, Massachusetts, Nevada, New Jersey, New York, Oregon, Utah, Vermont, Virginia, and Washington).

Coach’s Tip: Contact an immigration attorney, the U.S. Bureau of Citizenship and Immigration Services (BCIS), or State Department if you’re unclear about documentation requirements or have questions about the documentation of legal immigration that an applicant presents to you.

Rule #5: Don’t Make Ability to Speak English a Rental Criterion

In September 2016, HUD issued guidance confirming what several courts had previously ruled—namely, that excluding applicants or tenants based on their limited English proficiency (LEP) violates the FHA. Explanation: Statistically, most LEP people come from a country other than the U.S. Thus, disqualifying people because they’re LEP has the effect of discriminating on the basis of national origin (and, in some cases, race and/or religion). Discriminatory practices to avoid include:

  • Imposing an English-speaking language-related requirement on people of certain races or nationalities;
  • Posting ads that contain blanket statements, such as “all tenants must speak English”; or
  • Immediately turning away applicants because they’re not fluent in English.

Example: In 2013, HUD ordered a Virginia property management company to pay $82,500 to settle allegations of not letting a Hispanic woman apply for an apartment. According to the complaint, the company refused to give her a rental application because she didn’t speak fluent English even though she brought along a bilingual person to act as translator. HUD investigators also found that the company actually had a written policy requiring all prospects to be able to communicate with management in English without help from others [Travsiňa v. Virginia Realty Company of Tidewater, Inc., FHEO Case Numbers 03-11-0424-8].

Strategic Pointer: It’s imperative to ensure that leasing, management, and other staff remain calm, patient, poised, and professional at all times when dealing with LEP people. Giving in to frustration, even if it’s just a momentary and isolated lapse, may result in comments and actions that serve as Exhibit A in an intentional discrimination case against you.

Example: In 2017, the owner and manager of a California community had to shell out $20,000 to settle claims of national origin discrimination against Latino tenants. The turning point came when a local fair housing group joined the case bringing along evidence showing that the manager repeatedly made statements about not liking having Latino tenants at the community because they didn’t speak English.

For more guidance on this topic, see the Coach’s July 2021 issue, How to Avoid Discriminating Against People with Limited English Proficiency.

Rule #6: Don’t Use Tenant’s Immigration Status as a Bargaining Chip

Citizenship and immigration status liability issues can arise not only during the leasing process but also in the context of dealing with current tenants. One common example is seeking to use that status to extort a rental or other concession from the tenant. In 2012, HUD issued guidance (in the form of FAQs) clarifying that it’s “illegal to coerce, intimidate, threaten, or interfere with a person’s exercise or enjoyment of” FHA rights. “This includes threats to report a person to U.S. Immigration and Customs Enforcement (ICE)” to get them to move out or accept unfavorable treatment, or in retaliation for reporting housing discrimination to HUD.

Example: A married couple sued their landlord for threatening to report them to federal immigration authorities if they didn’t move out within a matter of days. They also claimed the landlord threatened to report their attorney to the California Bar for illegally advocating on behalf of tenants it perceived to be undocumented. In April 2020, the landlord agreed to pay $250,000 in damages and attorney’s fees to resolve the allegations of national origin discrimination [DFEH settlement announcement, April 22, 2020].

Rule #7: Protect Immigrant Tenants from Harassment

Immigrant tenants may become a target for harassment, intimidation, and abuse by property staff and neighboring tenants. Regrettably, the emergence of immigration as a divisive political issue in recent years has made such behavior a more widespread problem in the context of not only rental housing but many other aspects of social activity. And to the extent it’s typically based on a tenant’s national origin, race, or religion, landlords that engage in or allow others to engage in such harassment are at risk of liability for interfering with tenants’ use and enjoyment of the property they lease.

Strategic Pointer: Preventing harassment is the bare minimum. Achieving true compliance requires a shift in culture, one in which nationality, racial, and religious differences are not only tolerated but appreciated and respected, if not actively embraced. Staff training should strongly emphasize professionalism and the need to respect the diverse ethnic and cultural differences among prospects, applicants, and tenants.

To accomplish this requires cultural sensitivity and awareness of how well intentioned and seemingly innocent acts and statements may be considered offensive to persons of different national, ethnic, or religious backgrounds.

Example: Training of maintenance and other staffers who may enter into a tenant’s apartment should emphasize that removing one’s shoes before entering another person’s home is an essential protocol of respect in some cultures.

Also train staff to avoid asking people about their accents or where they come from. While such questions might be the product of genuine curiosity or desire to engage on a personal level, they may also be construed as a form of illegal inquiry, especially if they’re accompanied by clumsy or insensitive remarks.

Example: In an attempt to make casual conversation, a real estate broker married to a Brazilian woman asked the wife of a married couple where she was from. What the broker didn’t know was that the wife, who was from Venezuela, felt as if she had just been denied a rental at another property because of her national origin. “Here we go again,” she thought when the broker asked the question. She was convinced that they had just lost a rental opportunity because of her national origin and that it was happening again. The couple filed a discrimination complaint. Result: The broker was found liable for discrimination and ordered to pay $76,500. The Massachusetts appeals court upheld the ruling—although it did reduce the damages [Linder v. Boston Fair Housing Commission, February 2014].

Disrepair, Deterioration & MHCO Form 55

Phil Querin

 

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 onthe 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 periodto 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 12months 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 substantialportion 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 andtimely 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/LeaseAgreement, 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 terminatedupon 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.

 

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

 

And during the period of time provided for the tenant to make the necessary repairs, they are still required to payrent up to the termination date appearing in the notice, or, if applicable, any permitted extension period.

 

Trap: 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) daysafter 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;

Phil Querin Q&A: Plumbing Issues

Phil Querin

Question  A:  We have a Tenant who has refused to fix the water leaks within their mobile home. The park owner pays for the water and there have been significant cost increases due to the leaks. 

The Lease is the MHCO Lease from 2003 and states under Tenant Agreements F. Maintain the Home in accordance with conditions set forth in Paragraph 12.A(8)(a) through (e) which states in (d) all electrical, water, storm water drainage and sewage disposal systems in, on, or about the Home, are in operable and safe condition, and that the connections to those systems have been maintained.

What recourse do we have in this situation?

Question B:  We have a tenant whose sewage line is routinely blocked.  We have had a plumber our numerous times and unclogged resident’s sewage line.  We have repeatedly told this resident that they cannot put certain items in the toilet - and yet they continue to do so and block the sewage line.  Does this constitute grounds for eviction?  At what point is the resident responsible for the sewage line and the items they are putting in the toilet?Question B:  We have a tenant whose sewage line is routinely blocked.  We have had a plumber our numerous times and unclogged resident’s sewage line.  We have repeatedly told this resident that they cannot put certain items in the toilet - and yet they continue to do so and block the sewage line.  Does this constitute grounds for eviction?  At what point is the resident responsible for the sewage line and the items they are putting in the toilet?

 

Answer A: First, the MHCO Lease cited above addresses this. Not fixing the leaks, which are their responsibility to do, is a violation. Secondly, ORS 90.740(f) requires that tenants “(u)se electrical, water, storm water drainage and sewage disposal systems in a reasonable manner and maintain the connections to those systems. The tenant is using the water system in an unreasonable manner when they refuse to fix the leaks.

 

ORS 90.630 (Termination by Landlord) provides, in relevant part, the following:

 

 (1) Except as provided in subsection (4) of this section, the landlord may terminate a rental agreement that is a month-to-month or fixed term tenancy for space for a manufactured dwelling or floating home by giving to the tenant not less than 30 days’ notice in writing before the date designated in the notice for termination if the tenant:

      (a) 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;

      (b) Violates a rule or rental agreement provision related to the tenant’s conduct as a tenant and imposed as a condition of occupancy, including but not limited to a material noncompliance with a rental agreement regarding a program of recovery in drug and alcohol free housing….

 

ORS 90.630 goes on to explain that you may issue a 30-day written notice of termination, allowing the tenant to fix the leaks within 30 days and avoid termination. If they fail to do so, you may file for eviction. If they cure, but the problem occurs again within six months following the date of your earlier 30-day notice, you may terminate the tenancy within 20 days, and there is no opportunity to cure. MHCO has the necessary forms.

 

Be sure you have papered your file to support your contention that these are water leaks for which the tenant is responsible, and then specifically describe the violations (there are two of them, one under the Lease, and the other under the statute)  in the Notice. 

 

Answer B:  This question is same as the prior one and the answer is the same (although the placement of the requirement may not be in the same location, depending on the date of your lease or rental agreement). Just make sure you have the evidence (e.g. plumber statement) before acting, and that you adequately identify the problem and solution in the Notice. 

 

Phil Querin Q&A: Trees, Limbs and Roots – Liability Issues

Phil Querin

Question:  .  What is the landlord’s responsibility when it comes to trees falling on a tenant’s house. Does it make a difference if it is a hazard tree vs. not a hazard tree? What about roots crossing over a space and causing damage to the home on the tenant’s space or the neighbor’s space?

 

Answer: First, it must be noted that since tenants are not “owners,” and therefore, the caselaw and statutes that might apply to the latter do not necessarily apply to tenants in manufactured housing communities where the Spaces are rented.

 

Since landlords are the “owners” of the community, so they should maintain good liability insurance coverage because even if maintenance of a non-hazard tree may be the tenant’s responsibility based on the park rules or rental agreement, (a) he or she may not have sufficient assets or insurance to cover the damage caused – especially if it involves personal injury, and (b) even if they do have coverage, there is a good chance the tenant or the insurance carrier, may try to pass the liability on to the landlord either for indemnity or contribution.

 

It is also important that landlords have good rules in place that are consistently enforced. Setting aside the hazard tree issue, which are mandated by statute, park rules should be clear in addressing each resident’s duties regarding maintenance responsibilities for non-hazard trees, especially in dealing with low hanging limbs over the resident’s home or that cross over onto another resident’s space. This is especially important where limbs are over a home, patio, driveway, and play areas.

 

Oregon law allows landlords to require that tenants carry liability insurance not exceeding $100,000.[1] The rental agreement may be unilaterally amended to impose the insurance, subject to 30-days’ notice.[2]

 

Before we address liability, we must first address duties. Is the tree a “hazard tree” – which is generally the landlord’s duty unless assumed by the tenant as discussed below. If it is not a hazard tree, who has responsibility? That depends upon what the rules and rental agreement say. If the issue is not addressed in those documents, it is – in my opinion - almost certain the landlord will be held responsible if any damages occur. ORS 90.740 governing tenant duties, does not deal with maintenance of trees, except for watering and removal of fallen limbs. ORS 90.730, governing landlord responsibilities, does not address maintenance of trees on the tenant’s space. For common areas, the landlord is liable for maintenance of all trees.

 

This means that if the issue is entirely ignored in the rules or rental agreement, it will fall to the landlord.

 

Definitions. The hazard tree statute, ORS 90.727, provides the following definitions:

  • Maintenance“Maintaining a tree” means removing or trimming it for the purpose of eliminating features of the tree that cause it to be hazardous or may cause it to become hazardous in the near future. The term “hazardous” is discussed below.
  • Removal. “Removing a tree” includes both felling and removing it and also grinding or removing the stump.

 

Hazard Trees. ORS 90.100(20) defines them as trees located in a manufactured housing community measuring at least eight inches DBH[3] and “…considered, by an arborist licensed as a landscape construction professional pursuant to ORS 671.560 (Issuance of license) and certified by the International Society of Arboriculture, to pose an unreasonable risk of causing serious physical harm or damage to individuals or property in the near future.” (Emphasis added.)

 

Landlord Duties. The following hazard tree rules apply under the statute:

  • Landlord must maintain a tree that is a hazard tree (i.e., that was not planted by the current tenant) on the Space if “…the landlord knows or should know that the tree is a hazard tree.”
  • Landlord may maintain a tree on the Space to prevent the tree from becoming a hazard tree. Prefacing the statute with “may” means it is not mandatory. But if the issue is not covered in the rules or rental agreement, guess what? If the tenant does not maintain the tree voluntarily, it could ultimately become a “hazard tree” thereby removing any doubt about who has the duty to maintain.
  • Landlords have discretion in deciding whether the appropriate maintenance is removalor trimming of the hazard tree.
  •  Landlords are not responsible for (a) maintaining a tree that is not a hazard tree or (b) for maintaining any tree for aesthetic purposes.
  • ORS 90.725 is the general access statute for all landlords and tenants. It is lengthy and detailed. But ORS 90.727(4) requires that the reasonable notice be given to inspect a tree and “…except as necessary to avoid an imminent and serious harm to persons or property, a reasonable opportunity for the tenant to maintain the tree. The notice must specify any tree that the landlord intends to remove.”

 

Tenant Duties.  Except as provided above, the tenant is responsible – at their expense - for maintaining the trees on their Space. (Notwithstanding this provision, I believe it is good practice to include the responsibility in the rules or rental agreement.) Tenants may retain certain qualified arborists[4] to inspect a tree on their Space, and if the arborist determines that the tree is a hazard, the tenant may either (a) require the landlord to maintain the hazard tree, or (b) maintain the tree at the tenant’s expense, after providing the landlord with reasonable written notice of the proposed maintenance and a copy of the arborist’s report.

 

Whether it is the tenant’s duty or the landlord’s based upon the above rules, maintenance of any tree with a DBH of eight inches or more requires engaging the services of a landscape construction professional with a valid license issued pursuant to ORS 671.560.

 

Tree Interfering With Removal Home. If a tenant’s home cannot be removed without first removing or trimming a tree on the Space, the owner of the home may remove or trim the tree at the tenant’s expense, after giving reasonable written notice to the landlord.

 

General Liability Issues. What follows are my opinions only, and not legal advice. In addressing these issues, I am following general real estate laws.

 

  • Who is responsible if a non-hazard tree – or limbs, falls on the resident’s home or injures a resident or guest?
    • Under ORS 90.727(5), it is the tenant’s responsibility. If the tenant has their home insured, it would be submitted to the insurance carrier. Otherwise, it’s absorbed by the tenant. If they have health insurance, the injury should be covered.
  • Who is responsible if a non-hazard tree – or limbs, fall on the neighbor’s home or injures the resident or a guest?
    •  Does the tenant on whose space the tree grows, have liability insurance? If a claim is brought by the neighbor against that tenant, the liability carrier will likely cover it.
    • If the neighbor whose home was damaged had property damage insurance, that carrier would pay, and if the tenant was responsible for tree maintenance by virtue of ORS 90.727(5) the carrier might bring a subrogated[5] claim against the tenant if he/she has assets or liability insurance.
    • If the neighbor was injured and had health insurance, the same rules would apply as above.
  • Who is responsible if the roots of a non-hazard tree protrude under the resident’s home, or onto the neighbor’s Space and cause that home to become out of level or otherwise damaged?
    • ORS 90.730(3)(g) provides that “…Excluding the normal settling of land, a surface or ground capable of supporting a manufactured dwelling approved under applicable law at the time of installation and maintained to support a dwelling in a safe manner so that it is suitable for occupancy. A landlord’s duty to maintain the surface or ground arises when the landlord knows or should know of a condition regarding the surface or ground that makes the dwelling unsafe to occupy.” (Emphasis added.)
    • This suggests that the root system from the non-hazard tree is going to be the landlord’s problem if safety becomes an issue as the tree remains there.
    • For this reason, landlords should be attentive to the problem, especially upon the change of ownership of the home, i.e., before the offending root system causes more damage.
  • What if a non-hazard tree is blown over in a storm or struck by lightning, and cause damages or injuries to tenants or their property?
    • This is well beyond my real estate legal skill set, except to say that “Acts of God” e.g., weather, forest fires, earthquakes, etc. would not normally create liability to the tenant unless the risk was foreseeable and/or the result of an intentional or grossly negligence act of the tenant – e.g., the tenant damaged the tree affecting its stability, but allowed it to remain on the Space. Certainly, the damage or injuries resulting from the non-hazardous tree would be covered by health or property damage insurance, if the affected resident carried it.

 

Lastly, notwithstanding the ORS 90.727(5) imposes non-hazard tree maintenance responsibility on the tenant, management must be careful to assure that they are safe. The cost of trimming to prevent a tree from becoming a hazard tree could be significant, and beyond the tenant’s financial capacity. For that reason, among others, it is my belief management must be vigilant about the safety of all trees on th

 

[1] See, ORS 90.222. This statute is quite detailed. It must be reviewed carefully before a landlord attempts to require it of the residents.

[2] Interestingly, the 30-day notice only applies to month-to-month tenants; it is therefore doubtful that a fixed term lease can be unilaterally amended. Landlords using leases for new residents should consider requiring it in the lease from the start.

[3] The width of a standing tree at four and one-half feet above the ground on the uphill side. Don’t tell the Woke Police, but “DBH” stands for “Diameter at breast height.”

[4] Details in ORS 90.727(5).

[5] Subrogation is a concept that permits an insurance company to pay their insured’s claim and then recover the amount paid from the party ultimately liable for the damage or injury.

SUMMARY OF NEW NON PAYMENT OF RENT RULES (HB2001A) Effective March 29, 2023

 

By:  Phil Querin, MHCO Legal Counsel

 

The Oregon Governor will sign HB 2001 on Wednesday, March 29, 2023; it makes significant changes to the Oregon Residential Landlord Tenant Act (“ORLTA”). Here is a summary of those provisions most likely to impact landlords and tenants in Oregon manufactured housing communities.

 

Nonpayment of Rent Notices. Prior to the Pandemic, landlords issued  72-hour or 144-hour notices for nonpayment of rent. During the Pandemic the Oregon Legislature extended those timeframes to 10-days and 13-days, respectively; they only recently returned to the 72/144 hour notices.

 

HB 2001 will permanently restore the longer 10-day and 13-day periods for nonpayment of rent notices. Note: This will not apply to week-to-week tenancies, which will continue to be terminated with a 72-hour notice of nonpayment.

 

“Nonpayment” Terminations. HB 2001 will be adding permanent language to ORLTA defining an entire class of terminations and evictions for nonpayment. These terminations for nonpayment will be subject to additional notice requirements and longer timelines in Eviction proceedings, whereas terminations for all other causes will remain the same.

 

Under HB 2001 “nonpayment” will be defined as “the nonpayment of a payment that is due to the landlord, including a payment of rent, late charges, utility or service charges or any other charge or fee described in the rental agreement” or in the following statutes:

 

  • ORS 90.140 – defines types of payments a landlord may require or accept;
  • ORS 90.302 – fees for landlord expenses;
  • ORS 90.315 – utility or service payments (not in manufactured housing/floating homes);
  • ORS 90.392 – for cause terminations;
  • ORS 90.394 – failure to pay rent;
  • ORS 90.560-90.584 – utility and service charges (manufactured housing/floating homes);
  • ORS 90.630 – landlord termination (manufactured housing/floating homes);

 

These are the same statutes and categories that constituted “nonpayment” under the Covid regulations. They are not so much “changes”, but rather a return to the definition of “nonpayment” that was created back in the Spring of 2020. The important thing to note is that a termination based on tenant’s failure to pay rent, charges or fees under these statutes will be considered a “nonpayment” termination and therefore subject to  additional notice requirements and an extended eviction timeframe.

 

Tenant Notice: Nonpayment Eviction Resources. HB 2001 reintroduces the tenant notice requirement (the “Notice”) that must accompany terminations and evictions based on nonpayment. The Notice will be drafted, updated, translated, and maintained by the Judicial Department and Oregon Housing and Community Services. It contains a list of resources for tenants directing them where to apply for housing assistance and/or seek legal services in relation to a termination or eviction. The Notice must accompany:

 

  • Any notice of termination for nonpayment; and
  • Any summons for an eviction proceeding based on a termination for nonpayment whether served by the landlord or by a process server.

 

Failure to serve the Notice with a nonpayment-based termination notice and a summons will be grounds for the Court to dismiss an eviction complaint.

 

First Appearances and FED Trials. For an Eviction based on nonpayment under ORS 90.392 (for cause) or ORS 90.394 (failure to pay rent), the timelines for first appearance and trial in an FED are extended. First appearances will be set roughly 15 days after the initial filing for FED actions involving nonpayment under those statutes. Clerks will have the ability to extend that timeline by up to 7 days if a judge is unavailable on the 15th day or to accommodate the plaintiff’s schedule.

 

An FED trial for a nonpayment eviction, if necessary, will be scheduled no earlier than 15 days, and no later than 30 days, after the first appearance.

 

All other Evictions, not based on allegations of nonpayment under ORS 90.392 (for cause) or 90.394 (failure to pay rent), will be scheduled for first appearance within roughly 7 days of filing. Clerks will have the ability to extend that timeline by up to 7 days if a judge is unavailable or to accommodate the plaintiff’s schedule. Trials for all other Evictions will occur no later than 15 days after first appearance.

 

An Eviction Under ORS 90.630 (termination by MHP landlord) would be subject to a 7-day window for first appearance, but, if the underlying termination was based on nonpayment, the trial would be scheduled between 15-30 days after first appearance.

 

If, through no fault of the landlord, trial for any type of Eviction does not take place within the specified time frames (15-30 days for nonpayment; 15 days for all others) the court may require the tenant to tender rent to the court.[1]

 

Court Obligation to Dismiss. HB 2001 dictates a number of circumstances in which the court will be required to dismiss an Eviction complaint. Henceforth, dismissal will be warranted when:

 

  • A landlord fails to provide the Tenant Notice in a nonpayment eviction (termination AND summons);
  • A landlord causes a tenant not to tender rent, including by failing to “reasonably participate” in a rental assistance program;
  • The tenant has tendered, or caused to be tendered through rental assistance or any other payment, the outstanding amount owed in the Nonpayment Notice;
    • If payment of the unpaid amount is received AFTER commencement of the FED action, tenant will not be entitled to prevailing party fees. Tenant may also be charged landlord’s filing fees.
  • A landlord files an FED based on unlawful holding by force (ORS 105.115)before the expiration of (a) a fixed term tenancy or (b) the time period specified in the termination notice.
    • NOTE: HB 2001 also expands the definition of “holding by force” to mean refusing to pay rent within the time period required by an ORS 90.392 (for cause) or ORS 90.394 (failure to pay rent) notice. Previously, holding by force only applied to 90.394 (failure to pay rent).

 

Default Judgments at First Appearance. HB 2001 makes a modification to the process for a landlord receiving a default judgment at the first appearance. To obtain an order of default:

 

  • The plaintiff (landlord or landlord’s representative) must appear and the defendant/tenant must fail to appear;
  • The court must determine that the FED complaint complies with ORS 105.115 (unlawful holding by force) and ORS 105.124 (form of complaint);
  • The landlord must testify under oath or submit an affidavit or declaration under penalty of perjury that:
    • Landlord does not have knowledge that the tenant has delivered possession; and
    • Landlord believes that the tenant remains in possession.

 

Sealing Eviction Records. The courts will be required to conduct an annual review of completed FED proceedings to determine which ones will remain on a tenant’s record. A judgment will be set aside and the record will be sealed in the following situations:

 

  • A judgment was either not for a money award, or the money award  expired or had been satisfied/discharged; and
  • Five years have passed since a judgment of restitution; or 12 months have passed since a stipulated judgment between landlord and tenant.

 

Once a record is sealed and set aside, a tenant will not be required to disclose the judgment. This record-sealing process is supposed to be conducted by the court on a regular basis, but it does not prevent a tenant from taking the initiative to apply for a set aside under ORS 105.163 (setting aside judgment). The court’s first review of old records must be completed by December 31, 2024.

 

What Now?!  HB 2001 does not contain any direction going forward, i.e., how landlords are to deal with terminations for nonpayment that are already in process. Accordingly, I’ve listed below my thoughts. Readers should check with their own legal counsel.

 

  • If a notice of default (“NOD”) is going to be sent/delivered to the tenant tomorrow, March 29, 2023, when the Governor signs the Bill, it is safest to assume that regardless of the time of day, it should conform to the new law.
  • If the 72/144 hour NOD has been delivered but not expired, the safest approach is to start over under the new law. You don’t want to do otherwise, then get into court and try to convince the Judge the eviction process had already “commenced” before the Governor signed the Bill. If in doubt, the court will generally default for the most tenant-favorable position. Why? Because judges don’t like to get reversed on appeal.
  • If FED has already been filed in court, what timelines apply are likely up to the Judge.
  • Similarly, if the tenant does not show up for an eviction based on an NOD sent before March 29, 2023, landlord should be prepared to possibly have to testify under oath or submit an affidavit or declaration as discussed above.

 

[1] Enforcing the duty to tender rent in for-cause evictions can have a filtering effect in separating good faith tenant claims vs. those interposed to avoid the payment of rent.

Rent Increases Before New Rent Control Legislation Becomes Law

Phil Querin

Question:  All indications are that the 2023 legislature is going to revisit the rent increase formula currently in effect, and once passed it would likely become law immediately upon the Governor’s signature. How can landlords deal with having already issued a September 2022 90-day rent increase notice if the 2023 rent cap is legislatively reduced before the landlord’s previously-issued September 2022 increase goes into effect?

 

Answer: Currently, ORS 90.600(2)(b) limits rent increases to 7% plus CPI (“Cap”) for any 12-month period. For 2023 that resulted in a Cap of 14.6%.[1] This amount surprised some, and we can fully expect the Oregon Legislature to pass a new law that could effectively reduce the Cap.

 

Note, that I do not read the law to limit rent increase after the first year of a month-to-month tenancy to only once per year – so long as the annual Cap is not exceeded in total. However, I believe that rent increase are generally limit to one-a-year by most Oregon MHP landlords.

 

Note also, that since ORS 90.600 only applies to periodic tenancies, i.e., month-to-month, the Cap does not apply to rent formulas in leases, i.e., fixed term tenancies. However, it has been my understanding that this was a legislative oversight in 2019; if so, the 2023 Legislature may change that, as well.

 

Currently, the text of ORS 90.600 provides that the landlord may not increase the rent (a) without giving each affected tenant notice in writing at least 90 days prior to the effective dateof the rent increase; and (b) during any 12-month period, in an amount greater than seven percent plus the consumer price index above the existing rent.

 

My reading of this is that so long as the rent does not exceed the Cap during a particular year – there is no limit on when the notice of 90-day increase may be issued. To put it another way, “increasing the rent” is not the same as “giving notice” of an increase in rent. There is no restriction against the frequency of the notices, just increases that exceed the applicable Cap.

 

For example, say word was out that the 2023 Legislature was going to dramatically reduce the Cap going forward. In my opinion, a landlord having already issued a 90-day rent increase notice in September 2022, effective January 1, 2023 (or later) would have two choices:

  1. Rescind the 2022 notice before it becomes effective, and re-issue a new 90-day notice for a different rent effective in 2023, so long as it was done before the effective date of the new legislation and did not exceed the 2023 Cap establish in 2022.

 

  1. Don’t rescind the earlier 2022 notice but issue a second rent increase notice that does not, in total, exceed the 14.6% Cap - so long as it is issued before the new 2023 legislation becomes effective.[2] Caveat: The 2-notice approach needs to make sure that the rental agreement or other park docs don’t limit increases to one per year.

 

Note that for both Nos. 1 and 2 above, the rent increase notice cannot be sent to any tenants who still have rent payments due on their first year of tenancy (including occupancy that may have preceded the signed rental agreement).

 

SB 608, the 2019 law amending ORS 90.600 and creating the Cap, applied to “rent increase notices delivered on or after the effective date of this 2019 Act.” In other words, the Legislature did not attempt to retroactively (and likely illegally) interfere with a rent increase that had already been issued before SB 608 went into effect.

 

Following that logic, should a landlord wish to rescind a 2022 90-day rent increase for 2023 and reissue a different one, it should be entirely legal so long as it is issued before the effective date of the legislation creating a new Cap.

 

Caveat: Landlords should check with their own legal counsel before rescinding any 2022 90-day notices or reissuing a second 90-day notice for 2023 rents under the 14.6% Cap.

 

 

[1] https://www.multifamilynw.org/news/2023-oregon-maximum-rent-increase-is-146

[2] For example, a 5.00% increase notice issued in September 2022 and a second notice for something less than 9.6% issued before the 2023 legislation becomes effective.

Death of MHP Tenant Living Alone[1]

Phil Querin

Question:  What happens to the home of a tenant living alone? What protections are in place?

 

Answer: At the risk of dating myself, I represented MHCO many moons ago when Oregon’s abandonment law was first being negotiated. One of the other representatives, John VanLandingham, did an excellent job not only on behalf of the tenant coalition, but also in riding herd over the group and drafting the text which ultimately was enacted into law.

 

There were at least four industry groups at the table representing the following interests[2]: (a) Tenants; (b) MH Lenders; (c) Landlords; and (d) Personal property tax assessors. Because of the size of the stakeholders, and their disparate interests, the result, ORS 90.675 and ORS 90.425,[3] are lengthy and complicated statutes – akin to reading War and Peace.

 

Background.

Before answering the above question, we must first address some basic concepts:[4]

 

  1. When a tenant or tenants abandon the home, it must be clear they are doing so with no intent to return. This is because once the abandonment is legally declared by the landlord, other interests become superior to those of the abandoning tenant(s).

 

  1. Before the abandonment can be declared, a 45-day letter must be issued to certain designated parties. If the abandoning tenant(s) receipt for or learn of the 45-day letter and timely respond, they have certain rights to protect their ownership of the home. If they do not timely respond, the tenant(s)’ interest is declared abandoned. Any known lienholders, including the personal property tax assessor, must also be notified, and given an opportunity to inform the landlord of their interest.

 

  1. Once the abandonment has been legally declared because the tenant(s) did not timely respond, interests of the remaining stakeholders, landlord, lender and personal property tax assessor, come to the fore – and all have to be coordinated going forward. If they do not timely respond their interests are also deemed to be abandoned.

 

  1. If the tax assessment of the home is $8,000 or less the landlord may dispose or sell the home and it will be removed from the community.

 

  1. If the tax assessment is over $8,000, there is a statutory process describing how the home will be advertised for sale and sold to a new tenant who will occupy it or remove it from the community. If the sale proceeds are in excess of the landlord’s costs of the abandonment, recovery of unpaid space rent, and repayment of the lien, if any, the balance must be repaid to the abandoning tenant(s) if they can be located. Otherwise, the proceeds escheat to the state.

 

  1. Lastly, and significantly, the law provides that during this lengthy abandonment process, the landlord must secure and protect them home. This is because after removal of perishables and pets, there could be personal property inside with monetary or sentimental value. Thus, immediately upon issuing the abandonment letter, my advice to most landlords is to immediately secure the home by changing the locks and, if necessary, post No Trespassing signs on it. This is because if the abandoned home is accessed by anyone – even friends and relatives – things can disappear, and a claim could be made against the landlord by the persons who claim ownership or an interest in the personal property. This is not to say the landlord should deny access to everyone, but it must be controlled and supervised.

 

Death of the Tenant Living Alone.

 

ORS 90.675(21) and ORS 90.425(20) address what happens when the only tenant, who is the owner of the home, dies.

 

The relationship of death and abandonment, albeit far different in actuality, result in the same issues, i.e., how to address and protect the interests of the remaining stakeholders, plus, the estate of the decedent.

 

In my experience, which I am sure does not differ from that of other MHP lawyers and landlords, is that following a tenant’s death, unless the landlord immediately declares the abandonment so he/she can safeguard and prevent uncontrolled access to decedent’s home, there are a parade of horribles that can occur. Battling siblings can – and do – obtain access to the home and “retrieve” what they believe is rightfully theirs; friends and relatives can do the same; and others, e.g., the long-lost friend or relative who had been absent over the years, materializes to access the home and remove items. Lastly, and not uncommonly, is one or more shirttail relatives, friends, or acquaintances, begin living in the home. If the person(s) refuse(s) to leave, the landlord is forced to file for eviction to recover possession and control of the home during the abandonment process.

 

In some cases, the tenant’s death may necessitate a small estate probate to effectuate the legal transfer of title. In that case, and others, the rightful party, e.g., the .personal representative, must decide whether to hold on to the asset for the estate – which entails paying storage fees for the home. If fees are not paid, the home can become subject to a loss of rights to the estate.

 

Conclusion. While death of the tenant living alone presents more emotional issues than a voluntary abandonment, the process following both events are very similar – because third parties are left to protect their interests.

 

Although Oregon’s abandonment law has been amended from time-to-time over the years, it has withstood the test of time. So, while both statutes are voluminous and complicated, they have successfully balanced the disparate interests of all the stakeholders affected by the process. It is a delicate balance, but it does work.

 

[1] This wording is imprecise. The law correctly addresses events following the death of a tenant when there are not other “tenants” as defined in ORS 90.100 (47).

[2] I say “at least” because within these major groups were various collateral interests represented.

[3] ORS 90.675 deals with homes located in manufactured housing communities; ORS 90.425 addresses those located outside of such communities, i.e., on private parcels of land.

[4] This summary is not “legal advice.” It is intended as a general description of the process in broad strokes. For details, the statutes must be reviewed and understood before proceeding.

Common Fair Housing Pit Falls: Not Exempting Assistance Animal from No-Pets Policy

MHCO
Fair Housing Pitfall: Not Exempting Assistance Animal from No-Pets Policy

Failure to make reasonable accommodations for a rental applicant or tenant with a disability is, perennially, the most common type of fair housing complaint, accounting for nearly 60 percent of all cases, according to HUD. Many, if not most of these complaints, involve assistance animals. So, that’s where we’ll start our analysis.

Spot the Discrimination Mistake

A landlord threatens to evict a tenant with disabilities for keeping a stray cat in her apartment in violation of the community’s no-pets policy. The tenant says the cat helps her cope with mental anxieties and asks for an exemption. The landlord says no because the cat has no special training or certification in assisting the disabled.

Pitfall: HUD and the U.S. Department of Justice (DOJ) interpret the federal Fair Housing Act (FHA) duty to make reasonable accommodations as requiring exemptions to no-pet policies necessary to enable individuals with disabilities to keep “assistance animals” that directly assist with a disability-related need. “Assistance animals” include dogs or other common domestic household animals that do work, perform tasks, provide assistance, and/or provide therapeutic emotional support for individuals with disabilities. Significantly, assistance animals need not have any specific certification or training. By contrast, under the Americans with

Disabilities Act (ADA) duty to accommodate applies onlyto “service animals” trained to do work or perform tasks for the benefit of an individual with a disability.

Thus, while the refusal of the landlord in our scenario to accommodate the stray cat might have been okay under the ADA, it violated the FHA.

Example: A Pennsylvania federal court ruled that the DOJ had a legally valid claim against a landlord that took the same position as the landlord in our scenario, and allowed the case to go to trial [United States v. Perry Homes, Inc., 2022 U.S. Dist. LEXIS 87064, 2022 WL 3021040].

Solution: Keep in mind that neither assistance animals nor service animals count as pets and that, unless the ADA applies, you must accommodate both to the point of undue hardship. You may, however, ask for information about the relationship or connection between the disability and need for the assistance animal to the extent the disability is non-observable and/or the animal provides therapeutic emotional support. In addition, you don’t have to accept an assistance or service animal that would create an unreasonable risk of harm, injury, or damage to property.