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This is a multiple part series on a private owner of a Manufactured Home Community willingly attempting to sell that Community to an Association of tenants within that Community. Riverbend MHP is a 39 space community located within the city limits of Clatskanie, OR. The motivation of the seller was discussed in the first part. In this second part, the owner meets with the Deputy Director and the Real Estate and Cooperative Development Manager for CASA of Oregon. The framing, presentation and negotiation of the Agreement to Purchase" is discussed.

In this second part

Answer: ORS 90.572 provides that if allowed by the rental agreement, a landlord using submeter billing may require tenants to pay a utility or service charge billed by a utility or service provider to the landlord for utility or service provided directly to the tenant’s space as measured by a submeter. But the statute adds that the charge may consist of only the cost provided to the tenant’s space as measured by the submeter, at a rate no greater than the average rate billed to the landlord by the utility or service provider, not including any base or service charge;

However, at Subsection 2(g), the statute provides that the utility or service charge assessed to the tenant may consist of a pro rata portion of the cost to read water meters and to bill tenants for water if:

• The third-party service reads the meters and bills tenants for the landlord; 
• The third-party service charge does not include any other costs (e.g., costs for repairs, maintenance, inspections or collection efforts); and 
• The landlord allows the tenants to inspect the third party’s billing records as provided in ORS 90.582 (Posting of water bills).[1]

So, it appears from a strict reading of the statute (though not the legislative history), if the third-party service’s charge is solely for the cost: (a) to read water meters, and (b) to bill tenants for water, it is permissible as a pro rata expense – i.e., it is limited to reading the meters and billing the tenants.

Accordingly, it would seem prudent for management to review its third-party charges to make sure that they are clearly defined, and that what is passed on to tenants is only a pro rata portion of those two items, i.e., (a) and (b). If the “direct costs” appear to include other services, charges, or fees – or they are not clearly allocated to (a) and (b) alone, they may be subject to attack. For third-party providers, they too may want to revisit how their charges are defined. 

[Note: This discussion is subject to what the legislative history of this statute reflects - keeping in mind that drafted legislation may or may not accurately reflect the legislative history that preceded it. The Answer above is limited to an interpretation of the statutory language only.]

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.

following my article titled “Home Fire in the Community” I received an email from John Van Landingham with a ‘gentle reminder’ that “…you might want to add that, if a governmental agency posts the burned-out home as constituting a health hazard, the abandoned property timelines can be shortened. ORS 90.675 (21).” John was – as usual – absolutely correct.  Below is an amplification of my earlier post.

ORS 90.675 is 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 and the agency determines that the hazard endangers others in the facility and requires 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.

[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.

[2] Note: the following steps are exceptions to the rest of ORS 90.675.  This means that if there is no exception in this list, the rest of the statute will apply.

The limitation on evictions after the first year of occupancy will likely have the biggest impact on landlords. During the first year of occupancy in a month-to-month tenancy, the landlord can evict a tenant with a written 30-day, “no-cause” notice. In a fixed-term tenancy, the landlord can similarly evict a tenant with a 30-day, no-cause notice at the end of the term IF the term falls within the first year of occupancy. After the first year, the new law essentially means that tenants can live in a rental unit for life unless they fail to pay rent, violate the rental agreement, or the landlord’s plans for the rental unit change substantially.

The main takeaway is that landlords should carefully evaluate tenants during the first year of occupancy to ensure that they would be good long-term tenants. If not, landlords should consider terminating the tenancy for no-cause before the second year of occupancy begins. There are some exceptions to the no-cause eviction rule after the first year, such as when a landlord intends to put the rental unit to a different use (i.e., to undertake substantial repairs, demolish the unit, move in family members, or sell the unit). Even then, the tenant can only be evicted with a 90-day notice and in some cases the landlord must pay the tenant one month’s rent to move out. There are also exceptions for tenants who live in the landlord’s primary residence as a tenant, or on the same property as the landlord (i.e., in a duplex).

Under SB 608, during any tenancy other than week-to-week, a landlord may not increase rent during the first year of the tenancy. After the first year, rent can only be increased with at least 90 days’ written notice. During any 12-month period, rent cannot be increased in an amount greater than 7% plus inflation as measured by the Consumer Price Index for All Urban Consumers, West Region. However, there are exemptions if the first certificate of occupancy for a rental unit was issued less than 15 years from the date of the rent increase, or if the landlord is providing reduced rent as part of a federal, state or local program or subsidy.

While most landlords would be content with 7% rent increases, the real danger is that this limit will be pushed downward by future legislatures. The 7% limit also prohibits landlords from quickly recouping large capital expenditures, such as unforeseen repair costs to their rental units. To guard against this, it seems likely that many landlords will set rents higher for new tenants, and/or regularly raise rents at 7% annually plus the CPI when they may not have done so before SB 608.

Mark L. Busch
Cornell West, Suite 200, 1500 NW Bethany Blvd
Beaverton, OR 97006
(503) 597 - 1309

mark@marklbusch.com

www.marklbusch.com

Answer:

It sounds like the tenant vacated without notice.  If that is the case, then you do not necessarily need to refund any rent to the tenant.

On a month-to-month rental agreement, as a landlord you are entitled to a 30-day written tenancy termination notice from the tenant before she is released from rent payments.  (ORS 90.427 (3)(a); ORS 90.220 (8)(f).)  Assuming the tenant did not give you a 30-day notice, you are entitled to rent for 30 days after the vacate date.  This means that you can keep any rent that she has already paid, plus take any remaining rent due for that 30-day period out of the security deposit (if you have one).

There is one caveat, however.  You do have an obligation to make reasonable efforts to re-rent the RV space.  (ORS 90.220 (8)(d); ORS 90.410 (3).)  If you are able to re-rent it, then the old tenancy terminates as of the date the new tenancy begins and you would be liable for returning the rent to the old tenant from that date forward.  (Note: You are not necessarily obligated to steer new tenants to the old tenant's vacant space. The reasonable practice would be to let any new tenants choose which vacant space they want on their own.)

The bottom line is that without a 30-day written vacate notice from the tenant, you can keep the rent until the space is re-rented to a new tenant.  You are then obligated to refund the remaining withheld rent to the previous tenant.  However, as usual, consult a knowledgeable attorney if any complications arise.

(FYI:  If you happen to have any written, week-to-week tenancy agreements, the same rules apply except that the 30-day notice period becomes a 10-day notice period.)

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.

Answer: The basic rule is that a landlord is required to provide an RV park that is "kept in every part safe for normal and reasonably foreseeable uses." Practically speaking, this means that if you know about a particular danger or threat of danger, as a landlord you must take reasonable steps to reduce or eliminate that danger.

The real question of course is what are the "reasonable steps" to take? At the basic level, you should make sure that you have adequate lighting that is well-maintained to illuminate the park streets at night (i.e., replace those burned out bulbs). Your resident manager should also conduct several walk-throughs throughout the day, preferably in the early morning and evening hours to note any problems. If you have a perimeter fence around your park, make sure that it is kept in good repair and that entrance gates are working and secure.

Part of the obligation to keep your park safe is to also promptly enforce all park rules with written warnings and/or eviction notices if necessary. A good example would be an unauthorized occupant staying with one of your tenants who you have reason to suspect is involved in park thefts. Even if you don't have solid proof of the thefts, you can rely on the fact that the person is not an authorized tenant and evict on that basis alone. You should also immediately evict any particular tenant who is causing trouble. (Hint: Consider a simple no-cause eviction notice.)

If you've done all these things and are still having problems, do you have to hire a security guard? Probably not, but it all depends on the circumstances. The test is what is reasonable to eliminate or reduce the danger. In some cases, that might mean installing security cameras if it would reduce thefts and it is financially reasonable (and in this day and age, security cameras are relatively inexpensive and easy to install). In other cases, it might be reasonable to install a perimeter fence to keep out pedestrians cutting through the park (and helping themselves to tenants' personal property).

In the end, you will be held to the standard of providing a reasonably safe park for your tenants. If you know about a particular danger or potential danger, take immediate steps to reduce that danger. While you can't eliminate every threat, you can reduce your risk of liability by addressing foreseeable threats.

Answer: This is a very complicated issue on several levels. For example, marijuana is a controlled substance under Federal Law. Under Oregon law, use and cultivation in limited amounts pursuant to a lawful Medical Marijuana Card are legal. The Oregon laws are linked here. The statutes cover such things as grow-site registration; medical uses for marijuana; issuance of an identification card; and limitations on a cardholder's immunity from criminal laws involving marijuana. For those interested, these statutes should be consulted. You have a responsibility to make sure that laws are not being violated in the community. You also have a responsibility to the rest of the other residents. Compliance with all laws is a condition of occupancy under the park's rental agreement, its rules, and the Oregon Residential Landlord-Tenant Act. I know of no way you can honor your obligations except to ask to see the card and verify that it is current and held in the name of the resident. The main issue here is Fair Housing Laws. If the resident has a valid card, then arguably he have some medical condition that has authorized its issuance. Does he have a legal right to demand that under the Fair Housing Laws, you make a "reasonable accommodation" for his medical condition, and permit him to continue in his grow operation? Not necessarily. In January 20, 2011, the U.S. Department of Housing and Urban Development ("HUD") issued a Memorandum, the subject of which was "Medical Use of Marijuana and Reasonable Accommodation in Federal Public and Assisted Housing." While the Memo was limited to federal public and assisted housing, it can be regarded as a helpful - though perhaps not a "final" resource - on the issue. It is very complete and helpful for all park managers and owners. It can be downloaded at: https://www.google.com/search?q=hud%20medical%20marijuana. Here is what the Memo directs: Public housing agencies '_in states that have enacted laws legalizing the use of medical marijuana must therefore establish a standard and adopt written policy regarding whether or not to allow continued occupancy or assistance for residents who are medical marijuana users. The decision of whether or not to allow continued occupancy or assistance to medical marijuana users is the responsibility of PHAs, not of the Department." Thus, HUD seems to be skirting the issue, leaving it up to the agency in the state that permits the use of medical marijuana. Between the lines, it appears that HUD will not enforce a fair housing reasonable accommodation claim against park ownership or management if the community has an anti-marijuana policy in place. Without such a policy, my inclination is that enforcement would be potentially riskier, since the card-holder was not aware of the limitation at the inception of the tenancy. In answer to your specific questions: - Clearly, the card has to be valid and current in Oregon. A California card, for example would not suffice. (See, State v. Berrenger, 2010). - If there is no card, or no current valid card, the growing (not use) of marijuana could be is a violation of state law. You may not be able to issue a 24-hour notice under ORS 90.396, since possession of certain amounts of marijuana pursuant to a valid card, is protected. However, you may consider issuances of a curable 30-day notice under ORS 90.630; - If others are complaining about the odor, you have an issue between enforcing the use and enjoyment provisions of your rules or ORS 90.740(4)(i) versus permitting the activity if the resident has a lawfully issued Oregon card and is not growing over the proscribed amount. In any event, I would recommend that your community institute a medical marijuana use policy as a part of your rules and regulations. See, ORS 90.610 for the law regarding rule changes. Note that the right to implement a rule change - even if it results and a material change to the tenant's bargain with the park - is expressly permitted. In other words, you may want to proscribe ALL such activity, even if it pre-existed the new rule. Alternatively, you could grandfather in current card-holders.

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.

Both Landlords and Tenants agree of the importance of sub-metering; it is a win-win proposition. Enduring years of Landlord/Tenant Coalition, one of the most daunting tasks was demonstrating Landlords do not have safes' locked full of money. Financing options simply did not exist to fund mandatory sub-metering. Where were Landlords to find upwards of $750+ per homesite to install water sub-meters? Of course, Landlords proved their argument and negotiated the right to unilaterally amend rental agreements to permit community-wide sub-metering; creating provisions to recapture installation expenses by billing Tenants. Considering a new program now available, I believe every Landlord should sub-meter sooner than later!

Now available is a sub-meter and installation program at zero expense to any Landlord wanting to install new or replace old sub-meter systems. No applications, no qualifications, and no money down gets you state of the art wireless monitored sub-meters (water, electric, and gas are all available). What's the catch? ... the Landlord signs a 10 year Billing Agreement with the provider, in which the Tenant pays. So, how does it work?

First, the meters are purchased/installed/administered/maintained/repaired/monitored/insured/read/etc. by an Independent 3rd party. Just as all meter reading companies, this 3rd party charges a monthly fee for their service ... it is their cost of doing business. In Eugene, this 3rd party charges nearly 1/2 less of what EWEB (Eugene Water and Electric Board) charges it's customers. Second, per ORS 90, the 3rd party bills the Tenant the cost of the sub-meter and installation over a minimum of 60 months. The sub-metering process is complicated; no worries, this 3rd party is experienced, has been in business for nearly a decade, has all the systems and sample notices in place, and handles the entire process on behalf of the Landlord.

The Bottom line: local government agencies and utility companies use Landlords to pass through their exorbitant "fees" and rate increases, in which Landlords are forced to carry until the next "rent" increase ... making the Landlord the greedy bad guy. Prior to sub-metering, utility expenses were 23% of my rent; my monthly invoices now line item sub-meter every utility possible. My rents are now very competitive within the market and I have direct control over costs. I see every reason why all Landlords should do the same.

Indeed, it sounds too good to be true ... it is. Contact me at troybrost@gmail.com, 541-554-1499, or visit www.infrasystems.us to find out for yourself. I will provide you with the contact and information you need and assist you along the way.