Landlord Attorney Warns Smaller Cities May Be Pushed To Follow Portland Tenant Relocation Payments Ordinance

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Landlord Attorney Warns Smaller Cities May Be Pushed To Follow Portland Tenant Relocation Payments Ordinance

A Portland landlord attorney has written to other city attorneys in Oregon warning them that they could soon see a push in their city for an ordinance similar to Portland’s requiring landlords to pay for tenant relocation.

Portland attorney John DiLorenzo, who represents landlords in a lawsuit on appeal challenging the Portland tenant relocation ordinance, said he wrote the letter because “all kinds of city attorneys are interested in our case.

“We have heard there are tenant advocacy groups approaching smaller cities in Oregon,” he said and he wanted the other city attorneys to have the background on the case and the filings.

DiLorenzo letter to Oregon city attorneys on tenant relocation payments ordinance

“You are no doubt aware of the efforts by the City of Portland to require landlords to pay “relocation payments” to tenants when their tenancies are terminated by use of “no-cause stated” notices, when landlords refuse to renew leases, or when landlords raise rents 10 percent or more over any one-year period. On March 7, 2018, the Portland City Council made this ordinance permanent and extended its application to landlords who own as few as one rental unit.

 “A copy of the ordinance is available at Ordinance 188849 . (“The Ordinance”). Last year, my clients initiated an action challenging the ordinance on several grounds. The Multnomah County Circuit Court dismissed those claims, but the judgment is currently on appeal. My clients have recently filed our opening briefs with the Court of Appeals. An amicus brief has already been filed on our behalf. The following is a summary of our more significant points:

“The legislature has determined that rent control is a matter of statewide concern and proclaimed that no local government may enact any ordinance that either “controls the rent that may be charged for the rental of any dwelling unit,” ORS 91.225(2), or that is inconsistent with that prohibition, ORS 91.225(7). Notwithstanding the legislature’s unambiguously expressed intent to preempt local rent control legislation, the City enacted the Ordinance, which requires landlords to pay thousands of dollars to tenants upon the tenants’ demand when a landlord gives notice of a rent increase of 10 percent or more in a 12-month period—meaning the Ordinance penalizes rent increases that cumulatively total 10 percent or more in any rolling 12-month period.

Tenants not required to use the money for relocation

“The Ordinance calls the payments “relocation assistance,” but tenants are not required to use the money for that or any other designated purpose. Further, the requirement to make the payments is triggered solely by the size of the rent increase and is intended to limit those rent increases. By penalizing rent increases greater than a certain size, the Ordinance is designed to control the rent that may be charged. Accordingly, the Ordinance runs afoul of ORS 91.225(2) and ORS 91.225(7) which forbid the rent control aspects of the Ordinance.

“In a separate provision, the Ordinance also imposes payment requirements when a landlord issues a “no-cause stated” termination; that is, the landlord exercises her state-granted right to terminate a periodic tenancy by giving notice without having to state a reason for the termination. See ORS 90.427. Under the Ordinance, a landlord cannot give notice and regain possession of the property at the end of the notice period, as the legislature has chosen to allow.

“Instead, the Ordinance requires a landlord to give more notice than state law requires and also to pay thousands of dollars to the tenant before the landlord may regain possession. Given those requirements, the Ordinance is incompatible and with and contrary to ORS 90.427 and is preempted for that reason.

“The Ordinance has yet a third provision that state law preempts. Where a landlord and tenant have a fixed-term lease, the Ordinance requires the landlord “to renew or replace an expiring fixed-term lease on substantially the same terms except for the amount of Rent or Associated Housing Costs” or pay relocation assistance to the tenant. That requirement destroys the very essence of a fixed-term lease, which by definition terminates without further notice or obligations. The Ordinance’s fixed-term provision is incompatible and cannot operate concurrently with state law authorizing fixed-term leases.

“Finally, the Ordinance, in violation of the Oregon Constitution, impairs existing contracts because it applies retrospectively to contracts entered into before the Ordinance was adopted.

“Before the Ordinance, landlords could raise rent or issue a no-cause stated termination without penalty. Tenants also had an obligation to vacate the premises upon expiration of a fixed-term lease. The Ordinance dramatically changes the landlords’ rights and tenants’ obligations by imposing significant penalties if landlords exercise their preexisting contractual rights, unconstitutionally impairing the parties’ contracts.

“Needless to say, we feel we have a good chance of prevailing in the Court of Appeals. We anticipate that your City Council members might be approached by tenant advocacy groups urging they emulate Portland’s current regime. We therefore thought you would have an interest in following the progress of our appeal since the outcome will, no doubt, impact whatever proposed ordinance your city might consider. Below are links to our opening brief and to the amicus brief which has recently been filed.

Appellates' Opening Brief

Brief of Amicus Curiae

“I hope this material is helpful to you and welcome any comments or questions you may have regarding the issues raised in our case,” DiLorenzo said in the letter.

Resources:

Portland Relocation Assistance Ordinance

BRIEF  OFAMICUS  CURIAEOREGON  ASSOCIATION  OF  REALTORS

PHILLIP  E.  OWEN,  an  individual;  OWEN  PROPERTIES,  LLC,  an  Oregon  limited  liability  company;  and  MICHAEL  L.  FEVES,  an  individual,  Plaintiffs-Appellants,  v.  CITY  OF  PORTLAND,  an  Oregon Municipal Corporation

About John DiLorenzo:

John DiLorenzo’s practice emphasizes change. Even if the law does not support a client’s position, there may be good policy reasons to support change. John’s practice designs and implements strategies to change the law by lobbying legislative and executive branch officials, initiating administrative rulemaking, or litigating to clarify what the law means. John has authored and been a primary advocate for major legislation in the areas of state and local taxation, tort reform, natural resources, and economic development. John also assists clients in campaign finance, government ethics, initiatives and referendums, insurance recovery actions, environmental claim responses, appellate cases, and a variety of government-related litigation matter

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