New Oregon Real Estate Laws Change the Game

by Danielle Kane | Oct 4, 2019 8:44:43 AM

The Asian Real Estate Association of America brought in three
panelists to discuss Senate Bill 608 during a September event
.

If you’re in
the real estate industry, or rent property, or are thinking about renting
property, you’re going to want to read this. It’s happening now in Oregon and
could easily be on its way to a state near you. I’m talking about rent control
policies and landlord-tenant matters.  

If you’re in
Oregon, you may be familiar with Senate Bill 608, but Better Business Bureau Northwest
+ Pacific has the debrief you need.

Oregon Senate
Bill 608 passed earlier this year and 2020 will be the first full year when the
new law is in effect. I attended a panel on the matter, put on by the Asian
Real Estate Association of America on Sept. 19.

This is a
state-wide rent control policy law. In fact, Oregon is now the first state to
adopt such policies state-wide. The law fundamentally changes how both lawyers
and property managers must handle landlord-tenant matters.

For 2020,
rent increases are capped at 9.9 percent. The new law says rent can only increase
7% plus the rate of inflation for the northwest, which totals 9.9 percent. This
is lower than 2019 when the cap was 10.3 percent.

While
rent-caps are getting most of the media attention, there is another element of
the law that is critical in dictating when and how landlords can remove their
tenants. Prior to SB 608, landlords were able to issue 30-day no-cause notices
when they wanted to remove a tenant. The rule was that the tenant had to have
been on the lease for one year or more – and if so – the landlord could tell
the tenant they need to leave without cause. Typically, this was done when
landlords wanted to raise rent and needed to remove a tenant to do so.

However, now,
no-cause notices are not available for landlords who wish to remove tenants
that have been there for one or more years, except for very limited
circumstances, according to the panelists. This is mostly going to impact
mom-and-pop property owners and/or landlords renting out single family homes,
duplexes or 4-unit or under apartment buildings.

When would
this cause a problem? Say you’re a landlord who owns three homes, and you rent
all of them. One of those homes has gone up in value, and you decide you want
to sell the home – no longer using it as a rental. But the family living in
that home has been renting from you for three years. Under new law, you cannot
make them leave (again, with limited exceptions) in order to sell your home
because they’ve been renting more than one year. The entire process for terminating
a lease, paying for the family’s moving costs, and selling your house in a lawful
timeframe, has now become much more complicated.

The panelists
all agreed the first thing any landlord needs to do is consult their attorney.
Do not issue any notice without consulting first and understanding the minutia.
This includes:

  • How
    long the tenants have been living there
  • If
    they are “problem tenants,” in which case there are different rules
  • Where
    in Oregon the property is located because being inside of Portland will impact
    legal steps
  • Who
    are you selling your home to, which matters because you cannot kick out tenants
    and sell your home to someone else who is just going to rent it out again

SB 608 is
complex – and applies to many real estate professionals in different ways. Whether
you’re a lawyer, property manager, agent or broker in Oregon, there is one more
thing to remember: Portland Housing Bureau plans to roll out education programs
for tenants to learn their rights under these new laws. That means tenants will
be more capable of identifying when their rights are being violated. And if
landlords are not following the law, it could cost thousands of dollars down
the line.

Play by the
rules, folks.

6\wJ

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