Portland Attorney Brad Kraus takes on the issue of qualifying repair and renovation landlord exemption under SB 608 and urges landlords to think like a tenant.
By Brad Kraus
Attorney, Warren Allen LLP
Senate Bill 608 is in full force and effect. Many Landlords are wrestling with SB 608’s language and meaning, along with its effect on landlords’ rights, if any they still have.
Many Landlords’ biggest fear over SB 608 was its purported elimination of Landlords’ rights to serve No Cause Notices of Termination. While SB 608 has significantly undermined Landlords’ rights to serve No Cause Notices, certain exemptions remain which still allow for No Cause Notices. One such exemption – the Repair/Renovation Exemption – functions by placing Landlords in the intriguingly awkward position of arguing that their premises are uninhabitable. In other words, it causes Landlords to think like a Tenant, when assessing the magnitude of their habitability problems during the repairs/renovations.
If you’re thinking, “I’ve had tenants raise habitability allegations in an effort to avoid paying rent,” you’re already familiar with habitability disputes. Oregon’s “habitability statute” lists several items that, if substantially lacking, render the premises uninhabitable. For example, if there’s no water supply, no functional roof, no heating, or no electricity (see the theme here?), the premises likely are unsafe or unfit for occupancy. Think of habitability strategies from a tenants’ perspective: if the rented premises substantially lacks water, heat, electricity, etc., a tenant could successfully (a) contend that the premises isn’t habitable, and (b) avoid owing you rent for the timeframe during which the premises was uninhabitable.
SB 608 repair/renovation exemption
Many Landlords encounter habitability defenses in their eviction actions. However, Senate Bill 608’s repair/renovation exemption flips the habitability script, by requiring Landlords – not Tenants – to make the Tenant-like argument that the premises are (or will be) uninhabitable. Fortunately, seasoned Landlords can use their habitability knowledge in order to salvage No Cause Notice termination strategies under SB 608.
SB 608’s Repair/Renovation Qualifying Landlord Exemption requires that the Landlord “intends to undertake repairs or renovations to the dwelling unit within a reasonable time and: (a) The premises is unsafe or unfit for occupancy; or (b) The dwelling unit will be unsafe or unfit for occupancy during the repairs or renovations.” The statute’s operative words, “unsafe” and “unfit,” are not defined. Alas, your habitability knowledge can supplant those definitional gaps by knowing what it takes to meet the statutory threshold: The more your repairs/renovations make the place uninhabitable, the more likely you are to defeat a tenant’s argument that you didn’t qualify for the Repair/Renovation Qualifying Landlord Exemption. In other words, the worse off your property is (or will be), the better off your Exemption argument will be.
Remember that SB 608 is state law and does not universally preempt local jurisdictional laws. For example, Portland has its own rules, requirements and exemptions that often differ from those crafted by the state legislature. Accordingly, regardless of your right to serve No Cause Notices under SB 608’s Repair/Renovation Landlord Exemption, make sure you comply with local laws.
The penalties for failing to serve valid notices that fall neatly within the Repair/Renovation Landlord Exemption can be costly, so understand your rights, know when to think like a tenant, and contact a skilled Landlord/Tenant attorney, should you have any questions.
About the author:
Brad 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. A native of New Ulm, Minnesota, he continues to root for Minnesota sports teams in his free time. He is an avid sports fan, enjoys exercise, spending time friends and his fiancée, Vicky. You can reach Mr. Kraus via email at firstname.lastname@example.org, or by phone at 503-255-8795.