HB 2001 and redemption rights leave much to be desired from an equitable standpoint when evaluated comparatively with other Oregon redemption rights.
By Bradley S. Kraus
Attorney at Law
Partner, Warren Allen, LLP
The calendar has turned to June. The year is nearly half over, and both landlords and tenants are grappling with the new rights and ramifications within House Bill 2001. Rental assistance, one of the larger items and rights in HB 2001 as it relates to curing notices and redeeming tenancies, can be a popular item among both landlords and tenants. But this popularity only exists when it is not forced. And, when it is forced, the proposed remedy should be equitable—i.e., it should make the wronged party whole. House Bill 2001 fails on both fronts and, when evaluated comparatively with other redemption rights, leaves much to be desired from an equitable standpoint.
As noted above, rental assistance is a popular item among both landlord and tenant advocates. However, HB 2001 removes what had long been a landlord right under Oregon law. If the Notice went uncured, the landlord was no longer under any obligation to continue the tenancy, regardless of if the tenant or rental assistance could provide the money at some later date. This tracks with common law notions of property rights; it should be the property owner who controls those rights (or, in legalese, their “bundle of sticks”). House Bill 2001 eliminates any notion of what a “cure” period is in a notice, replacing it with additional redemption rights that can be invoked at any time.
Those redemption rights, however, fail when analyzed in relation to others. Under HB 2001, tenants must only pay the amount listed in the notice to cure. With the extension of filing timelines, first appearance dates, and trial timelines, by the time the first appearance date or trial comes, an additional month of rent (sometimes two) will now have accrued. Under HB 2001, the tenant does not need to pay those amounts in order to “redeem” the tenancy, creating an almost endless loop of delinquency, attorney fees, and costs that landlords need to absorb without remedy.
HB 2001 Redemption Rights Extremely Inequitable
House Bill 2001’s redemption rights in that regard are extremely inequitable. For a better example, a review of redemption rights under judicial foreclosures is helpful. A person may utilize redemption rights in the property if they pay the “purchaser at sale” (a) the amount they paid at sale, (b) interest, and (c) amounts expended to protect the property. In essence, the new “purchaser” is made whole, recovering the monies expanded. Had House Bill 2001 created a requirement to pay all amounts due and owing, including attorney fees and costs incurred, a more equitable statutory scheme would exist.
For such a statutory scheme, Oregon should look no further than our neighbors to the north in Washington. Redemption rights and forced repayment plans which the landlord must usually accept within the eviction setting exist under RCW 59.18.410. Under those statutory rights, the tenant must pay all amounts due and owing, costs incurred by the landlord to file the unlawful detainer and a statutorily defined late fee. If a forced repayment plan is invoked, the tenant is required to also pay the landlord’s reasonable attorney fees as awarded by the court. This creates a fairer scheme of redemption rights, allowing the tenant one last chance, while at the same time providing the ability for the landlord to be made whole.
As an attorney who practices in both Oregon and Washington, there is a large distinction between redemption rights in the jurisdictions. While landlords in Washington may be unhappy with the redemption rights when invoked, they can at least find comfort in the fact that they will be made whole. And, if the tenant fails to do so, they can take the final steps in the process of recovering possession. Oregon’s scheme leaves much to be desired and, much like many of the laws passed during COVID and subsequent thereto, leaves housing providers holding the bag.
About the author:
Bradley S. Kraus is an attorney 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 firstname.lastname@example.org or at 503-255-8795.