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Answer. RS 90.680(6)(b) provides as follows:

The landlord may not unreasonably reject a prospective purchaser as a tenant. Reasonable cause for rejection includes, but is not limited to, failure of the prospective purchaser to meet the landlords conditions for approval as provided in ORS 90.510 (Statement of policy) (5)(i) or failure of the prospective purchasers references to respond to the landlords timely request for verification within the time allowed for acceptance or rejection under paragraph (a) of this subsection. Except as provided in paragraph (c) of this subsection, the landlord shall furnish to the seller and purchaser a written statement of the reasons for the rejection.

What this means is that the only prohibition is against unreasonable rejections. That, of course, is in the eye of the beholder. But whatever criteria you have, it must be applied consistently to all prospective applicants.

However, note that besides situations in which the prospective tenant fails to timely respond, the source of relevant screening criteria is to come from your Statement of Policy. So check that to see what criteria you have.

Similarly, Oregon law requires that you must inform your current resident in the rental agreement as to what criteria you will use, so check that, as well. In other words, you cannot make up screening criteria on the fly.

The MHCO rental and lease agreements have a number of criteria set out, and as long as you confine yourself to them you should be in good shape. You will note that they are general in nature, and do not set limits on the age or type of criminal convictions.

In checking with John VanLandingham, he reminds me that ORS 90.303 currently provides that a "landlord cannot consider arrests (unless the charge is still pending), but can consider convictions if the conviction relates to conduct relevant to being a tenant, which includes most everything. In consulting with screening companies, we were told that most don't report crimes older than 5 or 7 years."

There is a move afoot to apply limitations on criminal records in hiring. See the discussion on the Internet relating to "Ban the Box," here.

Answer: I doubt the park rules contain anything about privacy rights or the use of video cameras. As to laws being broken by the use of the camera, I don't believe there are any. Thus, I don't seen any management responsibility at this point. In other words, if the rental agreement, rules, or laws are not being broken, there would be no basis for management to treat the use of the camera as something for which the tenancy can be terminated, say, under a 30-day notice pursuant to ORS 90.630.

ORS 90.740 enumerates several duties of residents in manufactured housing communities. Subsection (4)(j) provides they must: "Behave, and require persons on the premises with the consent of the tenant to behave, in a manner that does not disturb the peaceful enjoyment of the premises by neighbors." Video taping from a stationary location, does not, in my opinion, appear to violate this law. If one resident followed the other around with a camera throughout the park, that would be another issue.

Let's call the resident with the camera, "Resident A", and the one with the late-night visitors, "Resident B". Your question did not say whether Resident B was aware of the video camera or that it was trained at his front door. Nor did you indicate whether the video camera also had audio capability, such that it could pick up Resident B's outdoor conversations with his late night guests.

In Oregon, ORS 165.540(1)(c) forbids a person from obtaining or attempting to obtain "the whole or any part of a conversation by means of any device, contrivance, machine, or apparatus, whether electrical, mechanical, manual or otherwise, if not all participants in the conversation are specifically informed that their conversation is being obtained." Note that informing the participants is required, but consent from them is not. Subsection (3) of the statute provides that the above prohibitions do not apply to conversations that occur inside a homeowner's residence, - even though the guests and visitors are not informed.

Although audio recordings are addressed by the above Oregon statute, video recordings are not. Nonetheless, the general rule, at least from a civil law standpoint, is whether the (e.g. Resident B) has a reasonable expectation of privacy. Doing drug deals outside is most likely an activity Resident B and his guests have no reasonable basis to expect privacy.

Certainly, Resident A can use the cameras on his own property and the streets, sidewalks, and any other public and quasi-public areas. Can the camera be trained on the front door of Resident B, as he admits his late night visitors? I cannot render a legal opinion on this, but would speculate that since it is outdoors, albeit on Tenant A's own property, video recording should be OK (not audio recording, however). But even if it's not OK, is this a fight management wants to take up? This is not as if Resident A is screaming at Resident B's late night guests, or is otherwise causing any disruption in the park. If Resident B knows of the video surveillance, consent would seem to be a moot issue. It would be prudent for Resident A to let Resident B know he has installed a security system that includes video surveillance. The manager should encourage Resident A to do so, or authorize him (the manager) to do so. Once informed, the entire expectation of privacy analysis becomes moot.

Lastly, I'm curious is Resident B's activity is bothering anyone else? If so, it may be time to take action. I have always maintained that with residents whose late night activities smack of drug dealing, with all the typical indicators such as multiple visitors, noise, and short-term visits, etc., a 30-day curable notice under ORS 90.630 is a much easier tool to use as the basis of an eviction, than to try to "prove" a violation of ORS 90.396 (1)(f)(B), which allows the issuance of a non-curable 24-hour notice for the manufacture, delivery, or possession of a controlled substance as defined by various Oregon statutes.

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. [Caveat: Even if the DOR doesn'trespond to the 45-day letter, they still must be notified of the upcoming auction, per the statute. Again, there could be liability to the DOR if they have a valid lien, got the 45-day letter, but weren'tinformed of the date and time of the 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.

Answer: This is a good question, and all too frequently ignored by owners and managers. The first question is whether the issue is addressed anywhere in the community documents, i.e. the statement of policy, rules, or rental agreement. Likely not. It really isn'taddressed in the Oregon Residential Landlord-Tenant Act, with the exception of ORS 90.222, which covers renter's liability insurance, and is excluded from the manufactured housing section of the law.

Strictly speaking, the fact that the home was destroyed and is likely uninhabitable does not make it any less of a resident responsibility than before the fire. In other words, it is the resident's primary responsibility to either promptly repair, replace, or remove the home. The space is still under lease or rental to the resident, so all of the same rules apply, i.e. to keep it in good condition and safe. If the home is nothing more than a shell, the resident should likely remove it as soon as possible.

If the resident does not have fire insurance to repair or replace the home, I suspect he or she will abandon it, thus making it your problem - or the problem of the lienholder if there is one. Incidentally, if there is a lienholder, the loan documents likely require fire insurance, and that it be a named insured on the policy. If that is the case, then hopefully, between the resident and their insurance company, there may be available proceeds to repair or replace.[1]

If the resident abandons the home, you should immediately send out a 45-day abandonment letter, thus triggering your right (and duty) to take control of the personal property. It is likely an attractive nuisance for children, which could result in injury to them, and liability to you. In such case, you should consider having it either cordoned off with "No Trespassing" signs, or removed. Make sure that you independently confirm that it is a total loss, and with no salvage value. If there is salvage value, it belongs to the resident.

[1] Note that the MHCO Rental and Lease Agreements do have a provision for the resident to maintain fire insurance, but it is optional, and applies only if the box is checked. This situation should be a cautionary tale for owners and managers requiring such insurance, with proof that it is being maintained.

Question: A landlord recently purchased a manufactured home in his community. He wants to fix the home up and then resell it. Does the landlord have to be a licensed plumber or electrician to do the respective work on the home?

Answer: Yes! It's one thing to be performing repairs on one's own home, and quite another to be doing so on a home intended for re-sale. But keep in mind that in either case, the repairs have to conform to all of the specialty codes - which is a reason enough for using a licensed and bonded contractor in either event. From a liability standpoint, the contractor should be thoroughly vetted through the Construction Contractor's Board. Make sure that the contractor has no complaints or other Board action. If the home is to be sold on an installment contract, make sure a current form of security agreement is used. Make sure the lien is properly filed with the Department of Consumer and Business Services and appears on the title to the purchaser's home until it is paid off. Make sure the Bill of Sale and, if applicable, the retail installment contract, both have extensive AS-IS language, making no express warranties and disclaiming all implied warranties. Make sure the buyer gets their own inspection of the home, inside and out, including all systems such as plumbing, electrical, HVAC, etc. I don't recommend letting the buyer waive the inspection - it could come back and bite the landlord if an unknown defect is later found. The landlord wants the buyer relying on his own expert, not on anything the landlord says. After the sale the landlord does not want any lingering liabilities. The landlord may likely have to be licensed as a dealer under ORS 446.003(8). Review ORS 446.616 for the rules concerning transfer of an interest in a manufactured home. Review ORS 446.611 for the rules regarding perfecting a security interest in the home. See ORS 446.641 regarding notification to the county of a transfer of ownership in the home. The landlord should be careful to record his interest first once it is acquired - and make sure title is clear when he first receives it. Otherwise, he may find himself trying to transfer an interest that the public records show belongs to his predecessor and/or has unreleased liens on it.

New Oregon Law. No. 4 above has been stricken,2 and the following rules (found at ORS 90.675(14)(d) and (e) and (15) of HB 3016,) will apply. On January 1, 2016, if the landlord follows these new laws, the tax collector and Department of Revenue (collectively "tax collector") will be required to cancel unpaid taxes in the following additional circumstances:

1. The landlord sells the home to a buyer who intends to occupy it in the community in which it is currently located, after:

a. Purchasing it at the abandonment sale; or
b. Acquiring it as a result of a written agreement with the tenant or tenant's

personal representative, etc. in accordance with ORS 90.675(23)(a) [currently (22)(a)].

1 If there are remaining funds after that, the balance is paid in the following order to any lienholder to the extent of any unpaid balance owed on the lien and the remainder to the tenant, together with an itemized accounting.
2 Currently in ORS 90.675(d)(A), (B), and (C). Note that HB 3016 also added the following text to No. 2: "...and the landlord disposes of the property."

2. The following additional conditions must be met:

1. There is a lien on the home for unpaid property taxes and special assessments owed to a county or to the Department of Revenue;

2. The landlord must prepare and sign and affidavit or declaration (hereinafter "Affidavit of Compliance") in the form set forth on MHCO Form 31A, with the county tax collector or the Department of Revenue (hereinafter, "tax collector"). Upon filing this Affidavit of Compliance, the county tax collector will provide title to the home for the landlord to give to a buyer at the time of the sale.

3. After the sale, the landlord must file a second Affidavit of Compliance in the form set forth on MHCO Form 31B, with the tax collector. It must be accompanied by:

   i. Payment of the amount remaining from the sale proceeds after the deduction of the landlord's claims and costs, up to the amount of the unpaid taxes or tax lien. The landlord may retain the amount of the sale proceeds that exceed the amount of the unpaid taxes or tax lien;

   2. Payment of any county warrant fees; and

   3. A third Affidavit of Compliance, this time from the buyer, in the form set

      forth on MHCO Form 31C, stating his/her intent to occupy the property in the community. Thereupon, the tax collector shall cancel all any remaining unpaid taxes or tax liens on the property.

Effect of New Law. The new law will permit landlords to sell abandoned homes with unpaid property taxes to persons who will reside in them at the community in which they are currently located. To the extent that the net sale proceeds (after deduction of the landlord's statutory claims and costs) are insufficient to pay the former resident's unpaid property taxes, the shortfall will be waived by the tax collector. If the sale proceeds cover more than the landlord's statutory claims and costs, and all of the unpaid taxes, the landlord may retain any excess.

The Manufactured Housing Landlord Tenant Coalition met earlier this week to continue negotiations on a variety of issues.  Here is a summary of what is moving, what is not and what still needs to be discussed as we prepare for the 2015 Oregon Legislative Session.

Abandoned Manufactured Home and Back Taxes

The coalition further discussed the abandoned home back tax" issue that MHCO negotiated with the Oregon Tax Assessors earlier last month.  The Oregon Department of Revenue expressed concerns about the agreement specifically as it impacts tax revenue from the Oregon Senior Deferral program.  The Oregon Department of Revenue typically has liens on 40 abandoned homes a year.  Moving forward the coalition will need to identify back taxes that are owed to the State of Oregon and back taxes owed to Oregon Counties.  We hope to have proposed language addressing this issue ready next month. 

One additional concern expressed by a MHCO Board Member was clarification of when the community owner acquires the title of the abandoned home.  Community owners will be reluctant to make the necessary improvements in an abandoned home if there is any question regarding the transfer of title.  The general consensus is that this needs to happen early in the process and be defined in statute.

Overall we are pleased that all parties remain committed to eliminating the community owner's responsibility to pay back taxes on an abandoned home. 

Changes to Annual Special Assessment on Park Residents and Community Registration Fee

As we have mentioned in earlier Legislative Updates

Answer:   This is a good question, and all too frequently ignored by owners and managers. The first question is whether the issue is addressed anywhere in the community documents, i.e. the statement of policy, rules, or rental agreement. Likely not. It really isn’t addressed in the Oregon Residential Landlord-Tenant Act, with the exception of ORS 90.222, which covers renter’s liability insurance, and is excluded from the manufactured housing section of the law.  

Strictly speaking, the fact that the home was destroyed and is likely uninhabitable does not make it any less of a resident responsibility than before the fire. In other words, it is the resident’s primary responsibility to either promptly repair, replace, or remove the home.  The space is still under lease or rental to the resident, so all of the same rules apply, i.e. to keep it in good condition and safe. If the home is nothing more than a shell, the resident should likely remove it as soon as possible.

If the resident does not have fire insurance to repair or replace the home, I suspect he or she will abandon it, thus making it your problem - or the problem of the lienholder if there is one. Incidentally, if there is a lienholder, the loan documents likely require fire insurance, and that it be a named insured on the policy.  If that is the case, then hopefully, between the resident and their insurance company, there may be available proceeds to repair or replace.[1]

If the resident abandons the home, you should immediately send out a 45-day abandonment letter, thus triggering your right (and duty) to take control of the personal property.  It is likely an attractive nuisance for children, which could result in injury to them, and liability to you.  In such case, you should consider having it either cordoned off with “No Trespassing” signs, or removed.  Make sure that you independently confirm that it is a total loss, and with no salvage value.  If there is salvage value, it belongs to the resident.

ORS 90.675is the abandonment law that applies generally to homes located in manufactured housing communities. Today it contains 23 separate subsections, a behemoth in size compared to most statutes.  Buried 21 sections down in the subterranean recesses of the statute is that portion of the law dealing with health, safety and welfare issues, in which 45 day letters and 30 response periods could not possibly work. In such situations, time is of the essence.  Accordingly, subsection 21 sets forth a fast-track protocol for declaring the abandonment of a home that poses certain risks to others (such as the abandoned shell of a home destroyed by fire). Below is a summary of what this subsection says:

If a governmental agency determines that the condition of the abandoned  home constitutes an extreme health or safety hazard under state or local law andthe agency determines that the hazard endangers others in the facility andrequires quick removal of the property, the landlord may sell or dispose of it by taking the following steps[2]:

· The date by which a tenant, lienholder, personal representative or designated person must contact a landlord to arrange for the disposition of the property shall not be less than 15 days after personal delivery or mailing of the abandonment letter required by ORS 90.675(3);

· The date by which a tenant, lienholder, personal representative or designated person must remove the property must be not less than seven (7) days after the date the tenant, lienholder, personal representative or designated person issues the abandonment letter;

· The contents of the abandonment letter must be in accordance with ORS 90.675(5), except that:

• The dates and deadlines in the notice must be consistent with the fast-track protocol above;
• The abandonment letter must state that a governmental agency has determined that the property constitutes an extreme health or safety hazard and must be removed quickly; and
• The landlord must attach a copy of the agency’s determination to the abandonment letter.

Answer: It means that for month-to-month tenancies, you may not convert from a base rent model to a straight pass-through within 12 months following the date you gave a 90-day rent increase notice under ORS 90.600.

The only exception to this rule is if the rent increase is a part of a formula provided in a fixed term rental agreement (i.e. a lease) that had been entered into one year or more before the conversion to a pass-through program.

Second Question: ORS 90.532(2)(a) (Billing methods for utility or service charges; system maintenance; restriction on charging for water) provides:

****

(2) A landlord may not use a separately charged pro rata apportionment billing method as described in subsection (1)(b)(C)(ii) of this section:

(a) For garbage collection and disposal, unless the pro rata apportionment is based upon the number and size of the garbage receptacles used by the tenant.

When it states "number and size of garbage receptacles", is it referring only to bins located at each tenant's space, or can we pro-rata based on the larger trash dumpsters like the 4 yard trash dumpsters our community uses?

Answer: The term "garbage receptacles" is found at four places in ORS Chapter 90. In three of them the term stands alone, and arguably could be construed to refer to either cans or dumpsters. However, only in ORS 90.532(2)(a) does the text add, "used by the tenant." That suggests to me that the drafters intended to limit the term in Subsection (2)(a) to the tenant's garbage receptacles, rather than park-owned dumpsters and bins.

A: HB 4038, which has not yet been codified, requires an owner to give written notice of the owner's interest in selling the park before the

owner markets the park for sale or when the owner receives an offer to purchase that the owner intends to consider, whichever occurs

first. If possible, I advise my clients to send the notice before entering into a listing agreement but definitely before actively listing the property.

Q: Does the notice need to be sent to each tenant individually versus all tenants (e.g. "Dear Mr. Johnson" vs. "Dear Tenant")?

A: The plain language of the law states "all tenants," but the 2014 Summary of Legislation states that the purpose of the bill is to require park owners to notify "individual park residents" if the owner is interested in selling the park. Because it appears that the original intent was to notify each individual, the safer course is to send the notice to each tenant individually.

If a tenants committee has been formed, and the purpose of the committee is (in part) to purchase the park, and you have met with the committee in the previous 12 months, you can send a notice to the tenants' committee in lieu of all tenants. Also note that you must send a copy of the notice to the Office of Manufactured Dwelling Park Community Relations of the Housing and Community Services Department (say that 5 times fast).

Q: What does the notice have to include?

A: (1) The owner is selling the park; (2) The tenants, through a tenants committee, have an opportunity to purchase the park; (3) In order to compete to purchase the park, within 10 days after delivery of the notice, the tenants must form (or identify) a single tenants committee for the purpose of purchasing the park and notify the owner in writing of: (a) the tenants' interest in competing to purchase the park; and (b) the name and contact information of the representative of the tenants committee with whom the owner may communicate about the purchase; (4) The representative of the tenants committee may request financial information described in section 2(2) of the act within the 10 day period; and (5) information about purchasing a park is available from the Office of Manufactured Dwelling Park Community Relations of the Housing and Community Services Department.

Q: Does 10 days really mean 10 days?

A: The law discusses "delivery of the notice." I advise my clients that all notices should be sent by first class mail and 3 days should be allowed for mailing just as if you were sending a 30 day notice or a 72 hour notice. Certificates of Mailing (Not certified mail!!) for each notice are strongly encouraged. By way of example, if you send the notice on June 1, then the "10 days" would run on June 13.

Q: What do the tenants have to do after I send them the notice?

A: If the tenants are interested in competing to purchase the park, within the 10 days, the tenants must notify the owner in writing of their interest in competing to purchase the park, the formation or identification of a single tenants committee formed for the purpose of purchasing the park and the name and contact information of the representative of the tenants committee with whom the owner may communicate about the purchase.

Q: Do I have to give the tenants my tax returns?

A: No. But, during the 10 days of delivery of the notice, and in order to perform a due diligence evaluation of the opportunity to compete to purchase, your tenants may request specific financial information which may include: the asking price, if any (this provision contemplates that you may not yet know your asking price when you send your notice); the total income collected from the park and related profit centers, including storage and laundry, in the 12-month period immediately before delivery of the notice; the cost of all utilities for the park that were paid by the owner in the 12-month period immediately before delivery of the notice; the annual cost of all insurance policies paid by the owner as shown by the most recent premium; the number of homes in the park owned by the owner; and the number of vacant spaces and homes in the park. Please note that I have seen requests that ask for additional information; providing information outside of what is outlined above is discretionary.

Bill Miner is currently Partner in Charge of the Portland office of Davis Wright Tremaine. DWT is a full service law firm with 500 attorneys on both coasts and in Shanghai, China. The Portland office consists of approximately 80 attorneys and over 80 staff. He works with clients to resolve their legal problems through pre-litigation counseling, litigation, and mediation. He tries cases in state and federal courts and through private arbitration. His experience includes defending and prosecuting business torts; breach of contract claims; disputes between and among members of limited liability companies; residential and commercial real estate matters, including landlord-tenant, title, lien, and timber trespass disputes; and probate and trust cases. He is a frequent and popular speaker at MHCO seminars and conferences. You can reach Bill at: http://www.dwt.com/people/WilliamDMiner/

Bill Miner | Davis Wright Tremaine LLP1300 SW Fifth Avenue, Suite 2300 | Portland, OR 97201Tel: (503) 778-5477 | Fax: (503) 778-5299 Email: billminer@dwt.com | Website: www.dwt.comAnchorage | Bellevue | Los Angeles | New York | Portland | San Francisco | Seattle | Shanghai | Washington, D.C.