Rent control, rent increases and rent regulations are an ever-escalating complexity of laws in Oregon so here is some help in understanding them.
By Bradley S. Kraus
Warren Allen, LLP
With each law that passes, I receive questions from clients confused about what that law means for them or their business practices. This is no doubt due to ever-escalating complexities of the laws—which are no longer written for the general public to understand—but also because those who craft the laws fail to understand the direct and indirect effects of the laws they pass.
As a reminder, SB 611 passed earlier this year, marking a change to allowable rent increases in Oregon. Rent increases under the Oregon Residential Landlord and Tenant Act are governed by ORS 90.323. That statute discusses the requirements for a valid rent-increase notice, both as it relates to timing and form. Senate Bill 611 modified ORS 90.323, now placing a hard cap on rent increases.
Oregon’s rent cap is now 7% + CPI, but no greater than 10%. That’s not terribly difficult to understand. However, when you add in the fact that local jurisdictions are now joining the fray, creating their own rent-increase rules, penalties, and requirements, it creates a regulatory morass that is nearly impossible to understand.
That difficulty is exacerbated by the fact that local news organizations report the increase but fail to consider those local requirements. For example, one news organization recently reported in the summer, post-SB 611, that Oregon landlords could raises rent 10%. That is true…. unless you’re in Portland. Raising rent by 10% in Portland, regardless of the state cap, could trigger issues under the Portland City Code. Portland has capped rent increases at 9.9%, even despite the state rent cap, and Portland’s 9.9% cap exists unless the state cap is lower. In essence, Portland landlords must always comply with the lower amount.
Recently, the city of Eugene did the same, enacting several “renter protections,” one of which relates to a potential relocation-assistance payment if the landlord raises rent at the state law maximum. Accordingly, two sets of rules emerge, as rent increases in Portland and Eugene implicitly have a different rent-cap amount and other additional requirements.
Many landlords also struggle with the exemption to the state law cap under ORS 90.323, which exists if the first certificate of occupancy for the dwelling unit was issued less than 15 years from the date of the notice of the rent increase. If you believe this exemption applies to you, it is imperative that you seek legal counsel before invoking it. It does not mean that the tenant has lived there for less than 15 years, and there are additional requirements that must exist in the notice if the exemption is invoked.
It would be easy to simply have a uniform set of landlord/tenant laws to work off. However, the legislature has apparently ceded this important task to localities in various aspects, a troubling trend for this area of law. It adds layers of confusion and ridiculous penalties that only serve to drive housing providers out of the business.
About the author:
Bradley S. Kraus is an attorney and partner at Warren Allen LLP. His primary practice area is landlord/tenant law, but he also assists clients with various litigation matters, probate matters, real estate disputes, and family law matters. You can reach him at email@example.com or at 503-255-8795.