Multifamily Landlords Win Some/Lose Some In The Short 2016 Legislative Session

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multi-family landlords

Multifamily Landlords Win Some/Lose Some In The Short 2016 Legislative Session

By  Clifford A. Hockley, President, Bluestone & Hockley Real Estate Services

In the short spring Oregon legislative session of 2016, landlords were surprised by HB 4001, a bill introduced by tenant advocates.

HB 4001:

  • Matched Portland’s 90 day rent increase notice requirement (and the reasons for the increase) and added the requirement that a 90 day notice be given for termination of tenancy after the first year of occupancy.
  • Required that landlords pay the tenant relocation assistance of one month’s rent at the delivery of the termination notice.
  • Created the presumption of retaliatory actions between landlord and tenant within 6 months after a tenant’s report regarding maintenance.
  • Added new language regarding unreasonable harassment of a tenant by a landlord.
  • Landlord advocates were able to stop the bill in the Oregon State Senate, but they had to agree to the following concessions in a similar bill, HB 4143.  HB 4143 was passed and will become effective April 14, 2016.

HB 4143:

  • Rent increase notices for week to week tenancies must be received at least seven days prior to the effective date of the lease.
  • Landlords may not increase the rent in the first year of month to month tenancies, or at any time after the first year of the tenancy without giving at least 90 days written notice to a tenant. (Remember to add mailing time).
    • This applies to any rent increase and effectively overrules the city of Portland ordinance that called for 90 day notices only for rent increases over 5%. 
    • Notices must specify the amount of the rent increase; the amount of the new rent; and the date the increase becomes effective.
  • The statute does not address rent increases for the renewal of fixed term tenancies, such as a one year lease.

In light of these new requirements, attorneys for Multifamily NW believe:

  • If the increase is built into the existing lease no specific additional notice of rent increase is required. 
  • If you would like to raise the rent on a tenant who did not sign a renewal and you expect the lease to turn into a month to month agreement then you will want to give the tenants a 90 day notice (plus mailing time) to have the rent increase occur at the same time that the lease rolls into a month to month agreement.
  • If you fail to plan ahead and the lease turns into a month to month agreement then you are stuck with the existing rent for one year after the conversion to a month to month agreement.
  • The terms of a fixed term tenancy, including the amount of rent, may not be unilaterally amended by the landlord or tenant.

Other items amended with HB 4143 include:

  • Notices and penalties for smoking: Fees may be assessed for smoking in a clearly designated nonsmoking unit or area of the premises. The fee for a second or any subsequent noncompliance may not exceed $250. A landlord may not assess this fee before 24 hours after the required warning notice to the tenant.
  • The legislature also fixed a small problem that occurred with new rules regarding changes for emergency exits in apartments established in the 2015 session.
    • In ORS 90.460(2), it removed the language requiring a landlord to provide at all times during the tenancy “a route of exit from a bedroom, other than the main entrance to the bedroom, for use during an emergency.”  
    • The language now requires the landlord to provide “a route or routes of exit from each bedroom and, if required, a secondary route of exit from each bedroom, for use during an emergency. The routes of exit must conform to applicable law in effect at the time of occupancy of the building or in effect after a renovation or change of use of the building, whichever is later.”

This change helped landlords who had permits for legal bedrooms that may not have had an immediate outside exit, and whose design had been approved by building officials.

The session also included a new bill regarding inclusionary zoning, SB 1533, which originally was also included in HB 4001. Inclusionary zoning is defined as zoning that requires permanently affordable residential units (inclusionary units) be set aside in either a new development or a substantial rehabilitation in exchange for a bonus density. 

SB 1533 was a part of a ‘package deal’ of housing related bills instigated by House Speaker Kotek. The version that passed included many key incentives which earned the support of many building and development advocates. 

SB1533:

  • Removes the preemption regarding local control against inclusionary zoning.
  • Requires 20% of the units to be affordable to gain the benefits of inclusionary zoning.
  • Applies to units that are 80% MFI or above.
  • Has a number of incentives that can be offered (including tax abatement).

These were the key landlord tenant bills that passed in the 32 days of the short legislative session. Tenant advocates were very disappointed as their fight for affordable housing and more substantial rent control appeared somewhat stymied in the Senate. Landlords beware; the tenants will be back in 2017 to fight for more help in controlling the fast increasing rents, especially in the major metropolitan areas. The battle for regulated affordable housing is far from over.  

Unfortunately, in the fight to provide affordable housing for low income Oregonians, laws will be passed that affect all tenants and this could hurt landlords in the future. Residential landlords must stay engaged and be involved in the upcoming local elections for Oregon Senators and Representatives if they want to protect their investments.

More information at: 308.WarrenAllenLLP

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