The new state Rent Control Bill – Senate Bill 608 – has caused a flurry of confusion for landlords and those property owners considering renting out a house or unit. Add in the fact that the city of Portland already has its own Tenant Relocation Assistance Ordinance and suddenly there are a lot of new hurdles for landlords to navigate.
After taking classes, doing tons of research, wherein we had to find out more about this accident lawyer in Orlando, FL, and hearing what real estate attorneys have to say about Senate Bill 608, we’ve broken down what these new laws might mean for you. Portland landlords need to understand the requirements and restrictions of both state and city regulations, and how they overlap. Fair warning, in our experience even real estate attorneys disagree as to the application and effects of these new regulations on property ownership in our area!
How does Senate Bill 608 Affect Landlords Who Want to Sell?
Oregon Senate Bill 608 is often referred to as the “Rent Control Bill.” The intent of this bill is to prohibit landlords from terminating month-to-month tenancy without cause after 12 months of occupancy, and to put a limit on large increases in rents.
The big news is that property owners who want to sell a tenant occupied property, in which tenants have lived longer than a year, are no longer able to issue No Cause Eviction notices, unless they meet one of these exceptions:
- Owner intends to demolish the dwelling unit or convert the dwelling unit to a use other than residential use within a reasonable time;
- Owner intends to undertake repairs or renovations to the dwelling unit within a reasonable time, and at least one of these apply:
- The premises is unsafe or unfit for occupancy; or
- The dwelling unit will be unsafe or unfit for occupancy during the repairs or renovations.
- Owner intends for the owner or a member of the owner’s immediate family to occupy the dwelling unit as a primary residence and the owner does not own a comparable unit in the same building that is available for occupancy at the same time that the tenant receives notice to terminate the tenancy; or
- Owner has (A) accepted an offer to purchase the dwelling unit separately from any other dwelling unit from a person who intends in good faith to occupy the dwelling unit as the person’s primary residence; and B) Owner has provided this notice and written evidence of the offer to purchase the dwelling unit to Resident not more than 120 days after accepting the offer to purchase.
*Translation: A landlord may no longer give a no cause 90-day notice to tenants (after one year of tenancy), then fix up the property once they vacate, in order to procure a higher sales price. A landlord may list the property for sale with tenants in place. Only after an offer has been accepted may she give the 90 day notice to vacate, and only for a buyer who plans to live in the property as a primary residence.
SB 608 also requires landlords to pay a relocation assistance of one month’s rent to tenants evicted for Qualifying Landlord Reasons (with some exceptions). The city of Portland, however, already has its own Relocation Assistance Ordinance and this is one of the major areas where the two laws overlap.
Portland’s Tenant Relocation Assistance Ordinance
On March 7, 2018 the city of Portland made the Tenant Relocation Assistance Ordinance permanent. This ordinance mandates payments from the landlord to the tenant when either an End of Tenancy notice is served, or an increase notice of 10 percent or higher is served, and the tenant then elects to move.
The Portland City Council met earlier this year to address some of the issues created by SB 608. These fixes were adopted on March 13, 2019, and include:
- Reiterating SB 608’s Qualifying Landlord Reason for issuing an End of Tenancy Notice after the first year of occupancy.
- Removing a shortened 60-day termination timeline regarding federal mortgage financing for the sale of a property (SB 608 did not make that accommodation).
- Clarifying several statements on how certain affordable housing may be exempted.
- Limiting the total amount of relocation payment required by state and city laws.
In order to benefit from a reduced relocation payment, the landlord must pay the total relocation payment in full at the time the 90-day End of Tenancy notice is served. The city’s new language allows landlords to deduct the amount of the state relocation from the amount required by the city of Portland.
Portland Relocation Assistance is awarded as follows:
- $2,900 – Studio or single room occupancy (SRO)
- $3,300 – One bedroom dwelling unit
- $4,200 – Two bedroom dwelling unit
- $4,500 – Three bedroom or larger dwelling unit
Our take on these new regulations is that once the dust settles, professional landlords whose goal it is to rent out their properties long term, and who understand the benefit of long tenancies, will be less impacted by these regulations.
For those of you who are considering a short term rental period or want to have a large amount of flexibility in terms of when and how you sell or improve your property, our advice is to seek legal counsel before you make any decisions to rent out your property. Renting your primary residence for a few years while you make decisions regarding your next real estate steps has gotten a lot more complicated than it used to be.
We advise you to perform serious due diligence on this issue. Don’t hesitate to call us if you need resources to help you make decisions about renting your property!